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Contxto – One acquisition and one month later, and logistics startup Nuvocargo is on the move again. The Ecuadorian-founded business recently announced its closing of a US$5.3 million seed round in which NFX and ALLVP co-led.
Other participating funds included MAYA Capital, Magma Partners, and One Way Ventures. Angel investors also contributed such as the CMO of Cabify, Rappi’s Co-founders, among others.
The startup will use these funds to hire staff for its headquarters in New York and its Mexico City offices.
Nuvocargo developed a platform to track shipments, manage paperwork, and ultimately make trade between the US and Mexico a more seamless process. And considering the commercial ties between both countries, investors on both sides of the border saw an opportunity they couldn’t let go.
More trade (and opportunities) to come for Nuvocargo?
Trade between neighbors US and Mexico has intensified. But I’ll let the numbers do the talking.
Data released by the US Census Bureau revealed that trade volume between the two totaled to US$614.5 billion in 2019. As a result, the Latam country had surpassed both China and Canada to become the United States’ number one trade partner.
To add more optimism, there’s also the completely ratified free trade agreement between the US, Mexico, and Canada.
- Related article: Startup Nuvocargo wants to be the one-stop-shop for US-Mexico trade
Likewise, according to Deepak Chhugani, CEO/Founder of Nuvocargo, 80 percent of cargo moved between the two countries is via truck.
No doubt this bodes well for the logistics startup specializing in US-Mexico trade. And that’s because the startup’s platform is fine-tuned to help forwarders navigate and keep in touch with the vehicles carrying their freight.
What’s more, there are other factors that may contribute to deepening trade ties between the US and Mexico.
For the moment, the presidents of both countries have been on relatively good terms with each other. And as the US and its businesses are reconsidering its reliance on Chinese manufacturing because of the coronavirus outbreak, Mexico paints as a prospective substitute.
In any case, we’ll have to wait and see how the countrys’ relationship evolves as Mexico enters phase three of the pandemic. And of course, let’s not forget the foreboding economic slump.
Related articles: Tech and startups from Ecuador!
-ML
