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Yaydoo secures $20M, aims to simplify B2B collections, payments
It’s no secret that the technology for easy business-to-business payments has not yet caught up to its peer-to-peer counterparts, but Yaydoo thinks it has the answer.
The Mexico City-based B2B software and payments company provides three products, VendorPlace, P-Card and PorCobrar, for managing cash flow, optimizing access to smart liquidity, and connecting small, midsize and large businesses to an ecosystem of digital tools.
Sergio Almaguer, Guillermo Treviño and Roberto Flores founded Yaydoo — the name combines “yay” and “do” to show the happiness of doing something — in 2017. Today, the company announced the close of a $20.4 million Series A round co-led by Base10 Partners and monashees.
Joining them in the round were SoftBank’s Latin America Fund and Leap Global Partners. In total, Yaydoo has raised $21.5 million, Almaguer told TechCrunch.
Prior to starting the company, Almaguer was working at another company in Mexico doing point-of-sale. His large enterprise customers wanted automation for their payments, but he noticed that the same tools were too expensive for small businesses.
The co-founders started Yaydoo to provide procurement, accounts payable and accounts receivables, but in a simpler format so that the collection and payment of B2B transactions was affordable for small businesses.
Image Credits: Yaydoo
The idea is taking off, and vendors are adding their own customers so that they are all part of the network to better link invoices to purchase orders and then connect to accounts payable, Almaguer said. Yaydoo estimates that the automation workflows reduced 80% of time wasted paying vendors, on average.
Yaydoo is joining a sector of fintech that is heating up — the global B2B payments market is valued at $120 trillion annually. Last week, B2B payments platform Nium announced a $200 million in Series D funding on a $1 billion valuation. Others attracting funding recently include Paystand, which raised $50 million in Series C funding to make B2B payments cashless, while Dwolla raised $21 million for its API that allows companies to build and facilitate fast payments.
The new funding will enable the company to attract new hires in Mexico and when the company expands into other Latin American countries. Yaydoo is also looking at future opportunities for its working capital business, like understanding how many invoices customers are setting, the access to actual payments, and how money flows out and in so that it can provide insights on working capital funding gaps. The company will also invest in product development.
The company has grown to over 800 customers, up from 200 in the first quarter of 2020. Its headcount also grew to 100 from 30 during the same time. In the last 12 months, over 70,000 companies have transacted on the Yaydoo network, and total payment volume grew to hundreds of millions of dollars.
Yaydoo is a SaaS subscription model, but the new funding will also enable the company to create a pool of potential customers with a “freemium” offering with the goal of converting those customers into the subscription model as they grow, Almaguer said.
Rexhi Dollaku, partner at Base10 Partners, said the firm saw the way B2B payments were becoming modernized and “was impressed” by the Yaydoo team and how it built a complicated infrastructure, but made it easy to use.
He believes Latin America is 10 years behind in terms of B2B payments but will catch up sooner than later because of the digital transformation going on in the region.
“We are starting to see early signs of the network being built out of the payments product, and that is a good indication,” Dollaku said. “With the funding, Yaydoo will be also able to provide more financial services options for businesses to address a working fund gap.”
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Raising $22.5 million, Liftit looks to expand its logistics services in Brazil, Mexico, Chile and Ecuador
The Colombian trucking and logistics services startup Liftit has raised $22.5 million in a new round of funding to capitalize on its newfound traction in markets across Latin America as responses to the COVID-19 epidemic bring changes to the industry across the region.
“We’re focusing on the five countries that we’re already in,” says Liftit chief executive Brian York.
The company recently hired a head of operations for Mexico and a head of operations for Brazil as it looks to double down on its success in both regions.
Funding for the round was led by Cambridge Capital and included investments from the new Latin American-focused firm H20 Capital along with AC Ventures, the venture arm of the second-largest Coca-Cola bottler in LatAm; 10x Capital, Banyan Tree Ventures, Alpha4 Ventures, the lingerie brand Leonisa; and Mexico’s largest long-haul trucking company, Grupo Transportes Monterrey. Individual investor Jason Radisson, the former chief operating officer of the on-demand ride hailing startup 99, also invested.
The new capital comes on top of Liftit’s $14.3 million Series A from some of the region’s top local investors. Firms like Monashees, Jaguar Ventures and NXTP Ventures all joined the International Finance Corp. in financing the company previously and all returned to back the company again with its new funding.
Investors likely responded to the company’s strong performance in its core markets. Already profitable in Chile and Colombia, Liftit expects to reach profitability across all of its operations before the end of the year. That’s despite the global pandemic.
Of the 220 contracts the company had with shippers, half of them went to zero and the other half spiked significantly, York said. While Liftit’s major Colombian customer stumbled, new business, like Walmart, saw huge spikes in deliveries and usage.
“Managing truck drivers is incredibly difficult, and trucking, in our opinion, is not on-demand,” said York. “At the end of the day the trucking market in all of Latin America is a majority of independent owners. They’re not looking for on-demand work… they’re looking for full-time work.”
Less than 1% of the company’s deliveries come from on-demand orders; instead, it’s a service comprised of scheduled shipments with optimized routes and efficiencies that are bringing customers to Liftit’s virtual door.
“We do scheduled trucking delivery so we integrate with existing systems that shippers have and start planning how many trucks they’re going to need and the routes they’re going to take and … tee it up exactly what is going to happen regardless what the traffic conditions are so we have been able to reduce the delivery times for the trucks,” said York.
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Nowports raises $5.3 million to become Latin America’s digital shipping answer to Flexport
Nowports, a developer of software and services to track freight shipments from ports to destinations across Latin America, has aims to become the regional answer to Flexport’s billion-dollar digital shipping business.
Almost 54 million containers are imported and exported from Latin America each year, and nearly half of them are either delayed or lost due to mismanagement.
Nowports is pitching shippers on its digital management software to keep track of each container, and has signed on a number of leading venture capital firms to fulfill its mission.
The Monterrey, Mexico-based company raised $5.3 million in its seed round of financing. The round was led by Base10 and Monashees, with participation from Y Combinator and additional investors like Broadhaven, Soma Capital, Partech, Tekton and Paul Buchheit.
“In Nowports we saw a very strong combination: well prepared and ambitious team using technology to help thousands of customers to improve their importing and exporting processes. By adding efficiency, reliability, and transparency to change a multi-billion dollar industry, Nowports has been able to attract many clients that saw significant improvements in their daily routines by using the solution” said Caio Bolognesi, general partner from Monashees, in a statement.
The company said it would use the money to expand into new markets, grow its team and integrate with more companies involved in the (very fragmented) Latin American logistics industry. It’s a market that needs a range of better logistics technologies.
“Even though over 90% of the world’s trade is carried by sea, the most cost-effective way to move goods en masse, there has yet to be a solution that’s able to connect suppliers, customs brokers, carriers and transportation companies to provide an efficient and reliable service,” said Maximiliano Casal, founder and chief executive of Nowports, in a statement. “This is why we launched Nowports, combining our 10 years of industry expertise to fill this void and are currently working with over 40 customers in the region and growing.”
The company now has offices in Chile and Uruguay, and is planning to expand to Brazil, Colombia and Peru.
“With platforms, algorithms with AI and integrations, our platform allows companies to take control of their shipments and plan and predict the best timing to move the freight based on the needs of their own company,” said Alfonso De Los Rios, founder and CTO of Nowports.
As the company looks to expand, it has a strategic road map it can follow in the growth of Flexport, the Silicon Valley startup that has become a billion-dollar business by applying technology to the outdated shipping industry.
The two co-founders of Nowports met at a program at Stanford University, with De Los Rios hailing from a family with deep ties to the shipping industry. He and Casal linked up and the two began plotting a way to make the deeply inefficient industry more modern and transparent. To familiarize himself with the market for which he’d be developing a technology, Casal worked in a freight forwarder in Kansas City that had been operating for more than 30 years.
In all, freight providers are getting paid nearly $40 billion per year to move freight into Latin America.
“Alfonso and Max are the ideal founders we look to invest in as they are industry experts and passionate about evolving the industry using technology and automation,” said Adeyemi Ajao, general partner from Base10. “We are proud to be investors in Nowports alongside our friends at Monashees and look forward to watching the company’s continued growth.”
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Colombian point-of-sale lender ADDI nabs $12.5 million from Andreessen Horowitz
Andreessen Horowitz <3 Latin American startups.
Latin America is the only region outside of the U.S. where the venture firm is routinely investing capital, and it just made another commitment, doubling down on its early-stage support for the point-of-sale lending startup ADDI.
ADDI picked up $12.5 million in new financing in April of this year as the company looks to expand its lending services online.
For an American audience, the closest corollary to what ADDI is up to is likely Affirm, the point-of-sale lender that’s raised a ton of cash and come in for some (valid) criticism for its basic business model.
Like Affirm, ADDI lets its borrowers apply for credit at the moment of purchase. The company likens its service to the layaway and credit plans that already exist in Colombia — but involve pretty onerous requirements to use. Company co-founder Santiago Suarez and Andreessen Horowitz general partner Angela Strange both commented on how, in some cases, Colombian shoppers have to have three people vouch for a borrower before a store will issue credit or agree to a layaway plan.
The difference between an ADDI loan — or any loan — and layaway is that an installment payment plan doesn’t charge interest (and even with the fees that installment plans do charge, they are often still cheaper than taking out a loan).
But financial products are coming for consumers in Latin America whether those buyers like it or not — and for the most part, it seems they do like it.
Historically, only the wealthiest clientele in Latin America received anything resembling the kinds of financial products that are more widely available in the United States, according to Strange. And the investment in ADDI is just part of her firm’s thesis in trying to make more services more broadly available in a region where a technological transformation is creating unprecedented opportunities for challengers.
That assessment is what drew Santiago Suarez back to Latin America only two years ago. A former executive at Lending Club who previously had worked as the head of New Product Development and Emerging Services at J.P. Morgan, Suarez saw the tremendous growth happening in Latin America and returned to Colombia to see if he could bring some much needed services to his home country.
Suarez partnered with his childhood friend, Elmer Ortega, who was working as the chief technology officer of the local hedge fund where he had previously been employed as a derivatives trader before learning how to code.
Together, the two men, who had known each other since they were five years old, set out to transform how credit was offered in retail shops. It’s an industry that Suarez had known well since his parents had owned stores.
“In the U.S. there are all of these gaps that fintech companies are filling,” says Suarez. “But the gaps in Latin America are bigger.”
Suarez and Ortega incorporated the company in September 2018, around the same time they raised $2.3 million from the regional investment firm, Monashees, Andreessen and Village Global . They then raised another $1.5 million in an internal round of financing before closing the most recent funding.
The company offers loans at annual percentage rates ranging from 19.99% to 28.90%. The company started with a digital solution for brick and mortar retailers because 90% of retail in Colombia still happens offline.
Although it’s in its early days, the company has already originated 10,000 borrowers and typically loans out roughly $500 since it launched on February 22, according to Suarez. He declined to comment on the company’s default rate on loans.
Now with 40 employees on staff, the company is looking to bring its lending tool to more e-commerce and physical retailers, according to Suarez. And despite the threat of cyclical political turmoil, Suarez says there’s no better time to be investing in Colombia.
“It’s the most stable country outside of Chile… Way more stable than Brazil, way more stable than Argentina and way more stable than Mexico,” Suarez says. “What we’re looking at is more than cyclical instability… those things go beyond that. Nubank was able to build a multibillion business in the worst political and economic crisis in Brazil’s history. I think Colombia is an incredibly attractive space with a deep talent pool.”
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