By Nancy Dahlberg
Marco Financial is the first tech-enabled financing platform built for small and medium-sized Latin American exporters and it is headquartered in Miami. Today the financial-technology startup announced it has secured $26 million in credit and equity funding.
Founded in 2019 by Jacob Shoihet and Peter D. Spradling, Marco supports small and medium sized businesses based in Latin America, where a $350 billion trade finance gap blocks many exporters from the U.S. market, the company said. The funding includes a small seed round, led by Los Angeles-based Struck Capital and early stage firm Antler, and a $20 million credit facility underwritten by Arcadia Funds.
Spradling, COO, said as a former small business in Latin America, he saw firsthand how SMEs in this region struggled to access trade financing that would have let them export their goods while retaining enough capital to keep their business running.
"Access to trade finance is one of the greatest hurdles in business operations,” he said, who has been both an importer and exporter. “The traditional system, dominated by banks, simply is not working anymore. It disproportionately hurts SMEs, restricts economic mobility and stifles job creation in emerging markets. With equity funding and a material credit facility we can serve this disadvantaged market in Latin America and help build a healthier, more equitable trade ecosystem reflective of an increasingly borderless global economy."
The time companies have to wait between when goods are shipped and orders are paid in full, sometimes three or four months or more, can put a huge crimp in cash flow for operations or even kill a company. Factoring helps close the gap by lending to merchants based on their receivables, and Marco claims that with its due diligence technology, it can reduce the loan origination process in the Latin American region from over two months to one week and provide funding to approved exporters within 24 hours, according to a TechCrunch report. Marco will focus on Mexico, Uruguay, Chile, Colombia and Peru initially.
"We look for companies that not only target massive, sleepy industries but also for ones that are led by management teams with fresh perspectives and asymmetric information that position them to upend incumbents," said Yida Gao, partner at Struck Capital. "In short order, Marco has assembled a world-class team to tackle the multi trillion-dollar trade finance market in a post-Covid time when SMEs around the world need, more than ever, reliable capital to fund operations and growth.”
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