In addition to the credit facility, the Miami startup also closed an $8.2M equity fundraise
By Riley Kaminer
Small businesses are a big deal. Globally, 50% of workers are employed by SMEs (small and medium sized businesses) – a figure that balloons to 80% in developing economies. 90% of all businesses are SMEs.
Too often though, financing is a barrier to small companies’ growth. Banks reject 50% of SME applications globally, and fewer than 10% of SMEs in Latin America have financing. Legacy lenders have a hard time assessing a business’ risk, leading to a $2 trillion gap in financing for SMEs.
Miami fintech Marco has developed a solution. Their risk solutions platform enables SMEs to receive a financing decision within days instead of weeks. Marco focuses on providing financing to exporters across Latin America.
To further this mission, Marco has just landed a $200 million financing round led by MidCap Financial and Castlelake, on top of an $8.2 million equity fundraise led by Arcadia Funds LLC. The startup reports that it will use its new funding to support its growing client base and portfolio to expand its trade finance platform and suite of trade services.
“We’re looking to empower small and medium sized exporters across Latin America to ensure that they’re able to sell their goods to great partners in markets globally,” co-founder and CEO Jacob Shoihet told Refresh Miami.
“We’ve seen that access to financing is the biggest challenge, and this new financing will enable us to tackle this problem at scale,” Shoihet continued. “This is an exciting inflection point for Marco to really start achieving growth.”
In 2022, Marco lent $100 million to companies in Latin America. Since launching in 2020, Shoihet asserted that Marco has financed $275 million across 25,000 invoices with no losses – achieving a compound annual growth rate of more than 1,500% between 2021 and 2022. The goal: to fund $750 million by the end of 2023 in the US as well as Mexico, Ecuador, Colombia, and Peru.
In July 2021, Marco raised $82 million, led by Kayyak Ventures and Arcadia Funds. The round included $7 million in equity and a $75 million expanded credit line.
“Marco is addressing one of the most pressing yet under-recognized economic issues of today: the ongoing inability for small exporters in emerging markets to swiftly access capital,” co-founder and COO Peter D. Spradling said in a statement.
“We believe that when there’s economic uncertainty is exactly the time when lenders should help businesses,” Spradling continued. “The umbrella should be given to businesses when the forecast shows rain, not when it’s sunny.”
Originally founded in New York, Marco’s team landed in Miami in June 2020. Now, 20 of their 50 employees are based in their Brickell office.
“I love Miami,” Shoihet said. “Moving our headquarters here was one of the best decisions we’ve made.”
“Obviously we’ve seen a downdraft in startup ecosystems globally, especially for companies in the crypto space. But I think Miami has proven to be a resilient market.” Shoihet also noted the sustained demand for local office space as a key indicator of our ecosystem’s growth.
Shoihet signaled that this is just the beginning for Marco.
“We don’t want to just be a financing provider to the small and medium sized exporters that we service. We know this is the biggest problem, and this is the most critical element that they need in order to grow. But we really want to be an operating system for these businesses. We want to be able to offer them all sorts of solutions that enable them to grow and scale and operate their business better.”
READ MORE ON REFRESH MIAMI:
- Boopos ramps up, firmly on the path to become the investment bank for SMBs
- Marco, a Miami-based fintech startup, raises $82M to fuel growth in LatAm
- QUASH.ai lands $3.7M seed round to expand Latin American credit platform
- Juan Pablo Jiménez, chief sales officer of Ecuador’s first unicorn, on Miami’s role in fintech’s growth
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