Letter from the CEO: Announcing Nuvocargo's $36.5M Series B funding
Today, I’m excited to announce that Nuvocargo has raised a $36.5M Series B round led by QED investors at a valuation north of $250M, more than 40 percent higher than our valuation in December 2021. New investors joining this round include Tresalia Capital, Amador Holdings, as well as the co-founders of Dropbox, Repl.it and Platzi. We’re also grateful to welcome back all major existing investors, including Tiger Global, NFX, ALLVP, Magma Partners, MAYA Capital, One Way Ventures, among others, all doubling down on Nuvocargo as part of this round. You can read about the announcement on Forbes, and on our press release, here.
As part of this round, Nuvocargo is also announcing that we will be expanding our offering and products to serve all major US/MX border crossings beyond Laredo, TX. While Laredo, TX accounts for roughly 40% of US/MX over-the-road (OTR) freight crossings and has been our main focus since 2020, we continue expanding our capabilities and as of today’s announcement, Nuvocargo will now be able to serve customers moving freight through any major border crossing (El Paso, Otay Mesa, among others) to continue being the preferred partner for our customers when dealing with US/MX supply chains. You can read more here.
We’re thrilled to announce this round today because it once again makes clear that Nuvocargo is in a very strong position to continue executing on our ambitious mission to simplify the $40B+ US/MX over-the-road cross border freight market for our customers. We feel especially fortunate to be in such a strong financial position given the drastic changes and volatility of the past 12 months in both the startup world and the ongoing freight downturn.
Despite the short-term volatility, there are also once-in-a-generation tailwinds occurring in both US/MX freight and in the software world with the advent of nearshoring and recent advances in artificial intelligence. This investment round allows Nuvocargo to continue investing in our customers so they can reap the benefits of both of these incredible mega-trends that will transform US/MX trade positively.
Global supply chains are experiencing a once-in-a-lifetime shift, bringing immense opportunities to the US-MX trade relationship. The nearshoring of supply chains to Mexico from China and elsewhere is on the rise and projected to add a further US$35.3bn annually in exports of goods alone in the next few years to what is already the world’s largest bilateral trade relationship (US-MX).
The shift is powerful and the momentum is piling up. This spring, Tesla announced it is building a new plant in Nuevo León, Mexico, which is expected to employ 7,000 people and bring an estimated investment of US$10bn, along with numerous of its suppliers. More recently, Taiwanese giant Foxconn, the world's biggest contract electronics manufacturer, established headquarters in Mexico to better serve its North American markets. And just this month, the giant Bay Area-based industrial REIT, Prologis, announced it’s investing $700M in industrial parks and warehousing in northern Mexico to support this trend.
We are awed with both excitement and responsibility at the work ahead to continue to modernize the experience of trading between Mexico and the US. And more specifically, in building better solutions each day for our clients and the network of carriers, customs brokers, warehousing providers, and insurance partners that make the Nuvocargo standard of service possible.
Since OpenAI released ChatGPT in November 2022, the world’s imagination has been captured by the endless possibilities of artificial intelligence with real use cases and a pace of innovation in the past 7 months that has been hard to keep up with.
For Nuvocargo specifically, we’ve seen an acceleration in the possibilities of how we can automate complex human-driven workflows in the world of US/MX OTR cross-border freight that didn’t seem possible a few years ago. We think modern companies that have deep customer relationships, proprietary software & structured data, and the ability to be nimble will be able to leverage the fast evolution of AI to provide significantly better experiences for customers shipping US/MX OTR cross-border freight at lower costs.
As we continue building our proprietary Transportation Management System (TMS) purpose-built for the US/MX market (Nuvo OS), Nuvocargo will continue investing in weaving-in the most impactful use cases for AI that help our customers simplify the highly complex process of moving freight between the US and Mexico. We are already partnering with multiple AI-first startups to keep ahead of the curve and bring these innovations to our products, our workflows, and to our customers.
What comes next?
We will be using the funds of the round to keep investing in Nuvo OS, expanding to serve all major border crossings, and ramp up our business development efforts to specifically help US-based brands simplify their US/MX OTR cross-border freight supply chains. We will also keep investing in scaling up our existing products: Freight, QuickPay, and Customs, with the funds of this round; just a few months ago, we announced our Customs product which is helping shippers centralize both Freight & Customs and resulting in an average of 33% faster border crossings, reducing vendor management, and giving clients deeper visibility at the border.
If you’re a company looking to solve headaches related to your US/MX OTR cross-border freight, please reach out to me directly or drop your information here and we’ll get in touch to understand your pain points and craft a solution for you.
I’m proud to be leading a passionate team of builders; thanks to all Nuvos for their hard work and to our customers for your continued partnership. Let’s go!