Nuvocargo, a logistics startup driving the so-called nearshoring trend, has raised $36.5 million in Series B funding led by Alexandria, Va.-based QED Investors. Other participants included existing investors NFX, Tiger Global and ALLVP (Mexico), and new investors Tresalia Capital (Mexico), Amador Holdings (Panama), and the co-founders of Dropbox, Repl.it and Platzi. Prior investors include NFX, Homebrew and Y Combinator.
The New York startup, which is focused on modernizing U.S.-Mexico border trade, has so far raised more than $75 million. The latest funding round valued the four-year-old firm at $250 million, compared with $180 million during the previous round in 2021.
“We are bullish on the nearshoring opportunity and have already seen increased demand for services specialized in the U.S.-Mexico trade lane,” said Nuvocargo founder and CEO Deepak Chhugani, a Kenya-born Ecuador native who was named in Forbes 30 Under 30 entrepreneurs last year.
Expansion on Cards
Nuvocargo’s unique expertise in the market, innovative technology and integrated solution places it in a privileged position to expand beyond the land port of Loredo, Texas and into all major U.S.-Mexico border crossings, added Chhugani, who previously was an investment banker for Merrill Lynch.
With the new funding round, Nuvocargo plans to expand to all major U.S.-Mexico border crossings. “QED doubled down on Nuvocargo by leading this round because they are on track to becoming one of the leading startups to spearhead the nearshoring trend to Mexico from China and Asia,” said QED partner Lauren Morton.
Nuvocargo touts an all-in-one digital platform, as it modernizes one of the largest bilateral trade lanes in the world. It has not only developed proprietary software, along with a common carrier billing system, but also set up an army of bilingual experts to manage end-to-end cargo movement, and ease familiar pain points such as customs and insurance. It also enables cash advances via Carrier Quickpay, a one-click solution.
Shoring Up Finances
With 33% faster border crossings, Nuvocargo has not been short of customers. In fact, during the recent downturn, it has had to shed smaller customers that were “costly to maintain,” Chhugani told Forbes, and retain the larger ones. Over the past year, the company says it has beefed up finances too. It raised “contributor margins” — the difference between total revenue and total cost of goods sold — by over nine times and cut its burn rate by nearly 50%.
This year, Nuvocargo has been listed in YC Top Companies 2023 and in Fast Company’s 10 Most Innovative Companies in Latin America.
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Backer of 27 Unicorns
Alexandria, Va.-based QED was founded in 2007 by the trio of former Capital One executives — Nigel Morris, Frank Rotman and Caribou Honig. The boutique investment firm focuses predominantly on fintech and data startups. QED has raised $1.4 billion from five funds. The last in 2021 was its biggest at $1.1 billion.
Morris, who serves as managing partner, co-founded Capital One Financial Services in 1994. Rotman serves as QED’s chief investment officer and has made Forbes’ Midas List each of the past five years as “One of the World’s Best VC Investors.” Prior to QED, he was one of the early team members that created Capital One. Honig left QED in 2017 and today serves as partner at the Silicon Valley firm SemperVirens Venture Capital.
QED has $4.3 billion in assets under management. Its portfolio consists of over 200 companies in 17 countries, 27 of whom are unicorns valued at over $1 billion each. It has made 24 exits including SoFi, Credit Karma and Klarna. QED’s recent investments include Jugyah, Crux, Kanastra, SkorLife and Summer.
