We are not slowing down, welcome Solvento!

Issue 002 | By Proeza Ventures

Proeza Ventures

September 15, 2022

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Welcome Solvento!

Solvento is bringing invoice settlement and payment automation to the highly fragmented and growing Mexican trucking industry. Ultimately, they offer 3PLs and carriers access to faster payments and credit. By wedging itself in the payment process from 3PLs to carriers, Solvento is able to offer these carriers instant payment in the form of invoice loans. By embedding themselves in 3PL and carrier workflows, they aspire to launch additional revenue streams, including invoice collections, fuel cards, truck leasing and insurance.

We are very proud of being part of Guillermo, Jaime and Pedro’s journey, who created the new standard in trucking payments.

Why we invested

The logistics market in Mexico has experienced strong growth over the last few years and this trend is expected to continue into the coming years. Services such as national and international transportation, warehousing, and customs brokerage are predominantly outsourced activities in the country. Although this is a strong and growing industry, the logistics sector is comparatively traditional. Companies are just starting to take into consideration the importance of having digital and integrated processes to have visibility across all in-house and outsourced services, most of which revolve around carriers and independent truckers.

Solvento set out to solve industry-specific pain points, providing factoring / short-term lending to the much-needed working capital to small and medium carriers. Through our research and conversations, we learned that independent truckers are cash-strapped, in great part due to long payment terms they face, which average 60 days. Furthermore, they do not have access to financing, which coupled with their operating upfront costs, creates a vicious cycle where these companies fight to survive day-to-day instead of focusing on growing and professionalizing their operations.

We see Solvento as having a right to win in this space versus other industry-agnostic advanced payment platforms. In addition, by embedding themselves in 3PL and carrier workflows, Solvento aspires to launch additional services, including invoice collections, fuel cards, truck leasing and insurance. We have a strong conviction that Jaime, Pedro, and Billy will scale and position Solvento as Latam’s leader offering compelling financial products for the logistics space. 🚀

Portfolio news

⚡️Locomation signed an eight-year agreement with Stevens Trucking, to bring autonomous trucking to its operations. The partnership estimates deploying across 500 trucks, starting in late 2023 or early 2024. 🚍

⚡️A special shout-out to miituowho recently signed another pay-per-mile insurance-as-a-service (IaaS) contract. The agreement is a game changer – for the company and consumers alike – since it is with a multinational insurance carrier with a significant market share in the auto insurance market in Mexico and a strong presence in other markets throughout Latam. The product will be officially launched during Q1’23. Head over to their website to buy your auto insurance policy and see for yourself how much you could be saving!

⚡️Congrats to Parkimovil on its impressive growth trajectory, now enabling more than 2.6 million monthly barriers across multiple projects throughout Mexico enabling smart mobility. The company offers a wide range of solutions, and they just added “Spot Plus”, a cool new feature you should check out.😎

⚡️BusUpannounces a new partnership with Mercadona offering their employees a more comfortable commute while being part of the change on becoming more sustainable. 🌳🚌

⚡️ Electric Era delivered and successfully demonstrated the PowerNode — the company’s high-power storage system for operators of fast charging stations! They were participants in EPRI’s Incubatenergy Labs 2022 Cohort,

🔍 Venture Capital Isn’t the Problem—It’s Venture Capitalists

This article raises interesting points about the Venture Capital Industry and made us question our approach. Are we investing in overly hyped markets, looking for stereotypical founders, and needing social proof to make our investments? After a critical review of our approach, this is what we came away with: 

We tend to shy away from hyped investment spaces due to the higher valuation multiples you find. Also, we believe that as with any other asset class, the initial price point dictates a big part of your return on that investment (assuming the right company in the space was selected). We believe one cannot count on ever increasing valuations, and that the current market correction will help shift the focus to profitability, not purely growth.

When looking at our portfolio, and especially our founder set, we can see it is diverse. Out of our 18 investments, we have invested in 5 solo founders, 14 first-time founders (founding teams), from 9 nationalities, having their companies based in 16 cities across 7 countries and 4 continents.

Even when investing in spaces some might consider hyped (at least at the time when the deal closed), our chosen track was a different one. For example, when we decided to invest in XOS, an electric trucking company, our thought process was clearly different from most. We were not looking for a futuristic design and/or a novel manufacturing approach, but a clear focus on developing the vehicle with the lowest TCO in the market and partnerships to scale in the most cash efficient possible way. This led us to have conviction in XOS and become their first institutional investor. The company went public last year, and just last quarter, it delivered 70 vehicles to customers across the US and Canada.

Clearly, we’ve taken a different path from other funds, minimizing some of the traps mentioned in the article. Having said this, only time will tell what the outcomes will be, but we have an early indication that they are trending in a positive way.

🔍California to Ban the Sale of New Gasoline Cars

Even though multiple players have expressed their thoughts on this new policy as too aggressive and difficult to achieve, we believe it’s a game changer that will push every player in the US to transition faster into the electrical future.

It’s important to mention that these new policies need to be backed by regulations and incentives that take into consideration all the variables in the EV ecosystem, such as charging infrastructure, hardware quality, supply chain, and commercial prices. According to a Bloomberg report, 1 out of 5 EV drivers wasn’t able to charge at stations and 72% blamed faulty equipment. 

Governments, Utilities, Automakers, and EV infrastructure suppliers need to work together to establish a fair playground with open systems that enable the electrical transition and reduce range anxiety. California is well known for setting its own auto emission standards and has become a reference for other states in the United States, so this move could have big implications and speed up the EV revolution(more on V2G advantages here)

🔍Electrification is poised to turn school buses into money-making arbitrage assets

Much has been said about the ongoing transition to electric vehicles worldwide. So far, most of the focus has been placed on new brands and makes hitting the market, battery cost and performance, range anxiety, and charging infrastructure (or lack thereof), to name a few.

However, something that we’ve been studying for the past few months is the resiliency of the grid to support this transition (read our last newsletter to learn more about Electric Era, one of our portcos that is enabling the faster deployment of fast chargers). Pilots like the one referenced in this article, taking place in Beverly, MA, where electric vehicles are supplying electricity back to grid to balance peaks – in this particular case, school buses – are becoming more commonplace, first in Europe (see this in the Netherlands and this in the UK) but now more so in the US (also see this in NY).

We believe that electric vehicles have the potential to serve as flexible resources for utilities to balance out the grid. Nevertheless, there’s still much to do as bidirectional charges have yet to hit the market en masse, not to mention the transition and adoption of the OCPP protocol to test out v2.0.1 enabling plug and charge and vehicle to grid capabilities. Having said this, we believe that the key sticking point will revolve around how to split the pie among the different stakeholders, and that’s something that we are excitedly keeping a close eye on.

Who do you think has the right to win? Utilities? Auto OEMs? Startups / SW providers? A combination of some? At the end of the day, we believe that the user (be it a personal user or a fleet manager) should be able to opt-in and manage the battery of her assets as she pleases and/or her use cases demand, so it will be interesting to see if the user remains at the center of all this.

Some deals we found interesting

🚀Awake a Munich- mobility startup that focuses on public transport bus services raised €4M Series Seed led by B&C Innovation Investments GmbH (BCII), which is part of Austria’s B&C Group. (12.September.2022)

🚀Circuit- a West Palm Beach-based startup that offers electric shuttle service raised $11M Series A financing round, led by Tribeca Venture Partners. ( 07.September.2022)

🚀Drover AI– a Los Angeles- based AI company that helps light EV companies improve efficiency and profitability raised $5.4M Series A,the round was led by Vektor Partners. (27.July.2022)

🚀Expedock a Silicon Valley-based outsourcing services provider for logistics and freight providers, raised $13.5M Series A,the round was led by Insight Partners, with participation from Motion Ventures and other existing investors. (10.August.2022)

🚀GrayMatter Robotics– a Los Angeles- AI-Robotics leader empowering humans with its smart automation solutions raised  $20M Series A investment led by Bow Capital and other existing investors. (16.August.2022)

🚀HopSkipDrive-an LA-based school transportation startup, raised $37m in Series D funding from Energy Impact Partners, Keyframe Capital, FirstMark Capital, Alumni Ventures and Transform Capital. (14.September.2022)

🚀Lima Bikes-a Peru-based startup offers motobikes leasing for gigworkers though AI analysis. The company raised $15M in venture debt led by a USA VC fund. (11.August.2022)

🚀Leoparda Electric-a Brazil-based battery swapping network to electrify vehicles in Latin America raised $8.5M of venture funding in a deal led by Monashees and Construct Capital.(14.September.2022)

🚀Monta-Copenhagen– based startup that focused on EV charging software to make the process easier and more efficient raised €30M at a €155M valuation for its charging software. The round was led by Energize Ventures. (14.September.2022)

🚀Onto– a London-based electric car subscription service raised $60M in equity in a Series C funding round led by Legal & General with participation from existing investors. ( 26.July.2022)

🚀OVO Automotive– a Tel Aviv startup that provides car fleet businesses full and remote control over their connected vehicle screens, raised a $3.5M round led by Regah Ventures and angel investors including a partner in Benchmark Capital, and Michael Van Swaaij, former Skype CEO. (01.September.2022)

🚀Populus, a SF- based industry-leading platform for cities to manage new mobility and fleet services, raised a $11M Series A funding round. The round was co-led by Zero Infinity Partners and Climactic. (30.Aug.2022)

🚀 Reversso– Chilean- based e-commerce returns automation platform, raised $1.1M round led by Genesis Ventures. (06.August.2022)

🚀Treggo– an Argentinian-based mobility startup focusing on e-commerce delivery raised an extra $1.7M from Newton Partners, Verve Capital, Latin Leap, Bluewatch Ventures, Kube VC, and a host of individual investors(21.July.2022)

🚀Tozero– a German-based startup that offers a novel process to recover critical materials such as lithium, nickel, and cobalt from lithium-ion batteries raised €3.5M in a pre-seed financing round led by Berlin-based Atlantic Labs. ( 07.September.2022)

🚀Zeti a UK-based fintech company built to accelerate the adoption of zero- and ultra-low-emission transport by using real-time data to enable pay-as-you drive (PAYD) financing raised $2.5M Seed round led by Powerhouse Ventures. (16.August.2022)

🚀Zitara– a San Francisco-based startup that builds battery management software for enterprises with large deployments raised $12M in a Series A round. Energy Impact Partners LP led the round.(23.August.2022)

Where we’ve been

It’s been a fun month, enjoying the last days of summer. Here are some highlights from the last weeks.

Where to find us next

🏎 Move America September 27-28 (Austin).

🏎  Latam Mobility: Mexico October 11-12 (CDMX)

🏎 Lavca October 12-14 (New York).

🏎 Auto | Bonny Doon October 26.

🏎 Carmo October 26-27 (CDMX)

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