Exploring the Disruptive Effects of Fintech in Logistics Across Latin America

Jaime Tabachnik, founder and CEO of Solvento, has written a guest post. Powerful winds of transformation and innovation are pushing Latin American logistics forward. As businesses shift activities closer to their countries of origin, freight transport has become an increasingly important factor in Mexico - and fintech is playing a pivotal role in reshaping the logistics industry. The logistics sector in Latin America must contend with the region's varied geography and a shifting economy. This requires that traditional models of operation are reexamined, and technological adoption is seen as a necessity, not an optional extra. Access to capital is of paramount importance, especially in newer markets, and is where fintech-first solutions make their mark. This type of technology provides robust financial services in tandem with the implementation of other new technology – enabling businesses to develop their fleet, utilize the latest tech, and grow to meet the changing market dynamics posed by the reshoring trend. Through this, the democratization of resources is enabled, and this will prove invaluable as the reshoring wave continues. As a prime illustration, Transportes EASO stands out as one of Mexico's longest-running and most renowned trucking companies. In order to separate itself from the competition, EASO has recently added an intermodal logistics component to its portfolio. Due to the need for containers to be shifted between short and long-haul transport services (including rail cargo shipments), EASO was able to leverage Solvento's platform to quickly and easily pay independent truckers for their services, a feature that has proven to be particularly attractive to many drivers. This has resulted in a massive surge in EASO's intermodal business over the last year. The need for quick and easy access to credit in this market is obvious. Unfortunately, making this happen is not a simple process. The industry must be able to handle the requirements of a sector that has not been served before, as well as ensure safety and security regarding logistics transportation. Fintech tools have the capacity of bringing forth sophisticated risk assessment algorithms which offer businesses invaluable knowledge in order to foresee any issues and take the necessary precautions. Their purpose is to protect the interest of those in the logistic industry of Latin America, by monitoring and regulating spending, forecasting cash flow needs, and decreasing financial hazards. As the world explores the potential opportunities of nearshoring and reshoring, there is no doubt that the combination of fintech and logistics will be essential in determining the future of Latin American road freight. Now is an exceptional time for the introduction of disruptive innovation in the fintech and tech sectors. It is obvious that the growth of logistics in Latin America must occur in tandem with the collaboration of financial institutions, logistics firms, and tech providers. Innovation is imperative to reach the full potential of nearshoring. This month, Solvento, the fintech entity building payment and credit technology for Latin America's trucking sector, reported the closing of a $50M debt facility sponsored by Lendable. Quona Capital led an oversubscribed equity round with contributions from Dynamo Ventures, Ironspring Ventures, Proeza Ventures, and Zenda VC. In addition, they revealed the introduction of Solvento Audita, an AI-powered solution which automates the accounts payable procedure for freight companies operating on the roads. Solvento is constructing the payment and credit framework for the Latin American trucking industry, supplying all involved participants with gains. Solvento automates payments, advances invoices, and resolves the liquidity requirements of carriers, so they can concentrate on their functioning and development. The advanced lending capability allows brokers and shippers to provide quick payouts, and injects operating capital into the supply chain for the advantage of carriers and truckers. Consequently, it will be beneficial in aiding carriers to pay their drivers more promptly, consequently addressing the limited driver capacity. The below statements are provided for illustrative purposes only in order to showcase the idea generation, research and thought process of Quona investment teams. It should be noted that the selection of portfolio companies was based on non-performance-based, objective criteria. There is no assurance that investments similar to those discussed in the profiles will be profitable or that any such trends will continue to be successful in the future. Additionally, Quona does not make any claims or guarantees regarding the profitability of any of the investments represented in their profiles. The opinions expressed herein are that of the Firm and should not be interpreted as a guarantee of any future success.

Source: https://quona-capital.medium.com/nearshoring-fintech-disruption-in-latin-american-logistics-78ce5869233c?source=rss------fintech-5