Marco, the first technology-enabled trade financing platform designed for small and medium-sized businesses in Latin America and the United States, announced today that it has received a $200 million credit facility from MidCap Financial, a leading middle market lender, and Castlelake, a global asset-based private credit specialist. Marco has also announced a $8.2 million equity investment led by Arcadia Funds LLC. The new funding will help Marco expand its trade finance platform and suite of trade services in order to close the $2 trillion global trade finance gap, which disproportionately affects small and medium-sized businesses (SMEs).
Global business is propelled by SMEs. They account for more than half of all employment globally, 80% in developing countries, 90% of all businesses, and up to 40% of GDP in emerging economies. However, access to financing is the most significant barrier to their growth; banks reject 50% of SME applications globally, and fewer than 10% of SMEs in Latin America (LatAm) have access to financing despite accounting for 90% of all businesses in the region.
Marco takes a novel approach to bridging the trade finance gap by combining smart decision models with best-in-class industry experts. The company is the first in Latin America to launch an operating system for SMEs in trade, addressing the most pressing issue in today’s lending climate: providing them with the liquidity and tools they require quickly, seamlessly, and during bear market cycles.
Marco uses cutting-edge technology to unlock the big power of small businesses by simplifying, accelerating, and reimagining cross-border trade. Its tech-powered risk solutions outperform traditional financing methods, allowing SMEs to receive a decision in days rather than weeks and a 24-hour approval turnaround, allowing them to participate in the global economy more quickly.
Peter D. Spradling, co-founder and COO of Marco, said that “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. We believe that when there’s economic uncertainty is exactly the time when lenders should help businesses. The umbrella should be given to businesses when the forecast shows rain, not when it’s sunny.”
The credit facility and equity financing come on the heels of a year of rapid growth for the three-year-old fintech. Marco lent $100 million faster than any other Latin American fintech last year, has financed over $254 million with no losses since inception, and has seen a 1,500%+ CAGR in funding between 2021 and 2022. Marco aims to raise $750 million by the end of 2023, with a focus on target segments in the United States and throughout Latin America, particularly in Mexico, Ecuador, Colombia, and Peru, where total exports exceed $490 billion.
The Miami-based fintech, which also has offices in Montevideo and New York, intends to expand its ecosystem in order to continue providing critical trade finance products to SMEs, such as factoring, purchase order financing, and asset-based lending, as well as to grow its exporter-focused trade services.
Marco co-founder and CEO Jacob Shoihet stated that the company has provided small businesses with over $250M in liquidity in two years, but there’s more to come. The team is working on revolutionary products to address exporters’ critical needs, crafted by their new CTO Nik Bougalis. With the new financing, Marco will be able to meet the pressing liquidity demands of small exporters and support a healthy and resilient global economy.