When products exit a cargo carrier and payment isn’t immediately available for all of the entities that touched it, those products are generally hauled to a warehouse to sit.
To help address that issue, freight payment platform PayCargo has raised $125 million in Series B funding to continue developing its cloud-based payments network so payers can quickly and securely pay all of the entities across the logistics chain. Its tools include real-time customer reporting and invoicing, workflows to streamline partial payments and reconciliation, advance payments, and automated refunds in any currency.
“We allow for the quick movement of cargo where the payment piece is no longer the obstacle,” PayCargo CEO Eduardo del Riego told Crunchbase News. “No one is waiting to be paid, and our technology enables everyone to quickly see they have been paid once they are paid.”
Insight Partners, which led PayCargo’s $35 million Series A last September, again led this new investment. It gives the Coral Gables, Florida-based company a total of $160 million in known venture capital since its inception in 2008, according to Crunchbase data.
“We started with Insight last year with our Series A and felt that in order to grow our global business, we needed to get additional funding,” del Riego added. “Having just gone through the pandemic, it has opened doors and the timing is excellent.”
The Series A funding was used to expand adoption of its electronic payments network and accelerate investments in its technology. This time around, del Riego expects to deploy the new capital into growing the company, which has already gone from 25 to 100 employees in the past eight months.
Today, PayCargo touts its network as “the leading independent payment platform focused on expediting the movement of cargo industry-wide in North America.” The company has operated in Europe since 2018 and is expanding there, as well as in Asia.
In addition, PayCargo is on track to process $10 billion of freight-related payments in 2021, a 250 percent increase from 2020, del Riego said. It has more than 67,000 active users remitting and receiving payments on the platform, with thousands more joining each month.
However, PayCargo is still only grabbing a sliver of the market opportunity, del Riego said. Although it has a major presence in North America, the company handles less than 5 percent of the logistics payment space. It works with more than 5,000 vendors, but there is an opportunity to work with another 40,000, he added.
Orbis Research‘s May market report forecasts the global trade finance market size to reach $10.9 trillion by 2026, up from $7.6 trillion in 2019.
Insight Managing Director Ryan Hinkle said the partnership with PayCargo is what the venture and private equity firm aims to create with all of its companies.
He believes the company is leading the logistics industry into digitization by providing a way to pay vendors as easily as using Venmo to pay friends.
“As new shippers and payers join the network, PayCargo is able to offer better solutions,” Hinkle said in an interview. “The world was beating down the door to get access, and we struck a deal for the second financing. There is a way to facilitate every movement in the logistics chain, and anything to do to speed it up is good. Every company will need to move their inventory, which leads to more working capital and more profits. That is the role that logistics plays, and we handle the payments piece of that.”