The B2B payments space has actually been on fire for a while, and the COVID-19 pandemic has actually only sustained mass adoption of digitizing financial resources.
In areas like Latin America, the requirement for development in the sector is much more paramount than in the United States with numerous individuals still depending on out-of-date procedures.
One Mexico City-based startup, Higo.io, is out to transform B2B payments for SMBs (little and medium-sized organizations) in Latin America, beginning with its house country.
Rodolfo Corcuera, Juan José Fernández and Daniel Tamayo founded the company in January 2020, recognizing that the process of paying vendors for company owner is mostly “troublesome and manual.”
“In Mexico, small companies mostly deal with payables with nothing more than spreadsheets and email and legacy savings account,” CEO Corcuera stated.
The trio formed Higo to automate procedures and supply visibility into capital, especially for small companies. “Casual” businesses make up about 23% of Mexico’s GDP, according to information from INEGI, the government’s National Institute of Stats and Location. Higo launched its SaaS platform last November.
And now the start-up has raised $3.3 million from a group of U.S.-based financiers consisting of Homebrew (which led the round), Susa Ventures, Haystack and J Ventures. The round is the most recent in a string of fintech-related fundings in Mexico that TechCrunch has covered since late.
Higo wants shake up the payments scene in the region by creating an option to conventional banking for organizations to pay each other.
“We want to develop the Venmo for B2B payments in Latin America,” Corcuera told TechCrunch.
Ultimately, the objective is to assist SMB owners deal less with laborious tasks and more on create earnings and revenues for their services. Customers so far consist of hundreds of small company owners and the company aims to have “thousands” of clients by year’s end.
“E-invoicing is common in the States and in the U.S., getting a PDF billing is enough,” Corcuera told TechCrunch. “But in Mexico, it has to be electronic to be [tax]https://www.sat.gob.mx/ordenamiento/18355/ley-del-impuesto-sobre-la-renta”>deductible by law. With our platform, invoices are immediately occupied so services can have visibility into what needs to be paid, what suppliers they owe and when they owe.”
Corcuera is no stranger to running business, having introduced a housekeeping marketplace at the age of 23 in 2013. He also founded Tandem, a workplace management platform, in 2018, to assist office managers improve their procurement needs. As is typically the case for founders, it was throughout the procedure of growing that company that Corcuera realized how uncomfortable and time consuming it was for businesses to manage their payables and receivables. That led him to come up with the concept behind Higo.io.
Gallardo was previously COO at Swap, a Mexican opposition bank, and also was among the founding members of Uber’s Mexican operations.
Looking ahead, Higo prepares to use its brand-new capital in part to improve its six-person personnel, especially boosting its engineering team so that it can “scale as fast as possible,” according to Corcuera.
For now, the business’s efforts are focused specifically on the Mexican market, which in of itself is substantial.
“Later we will broaden in Latin America. We see an extremely clear chance in comparable markets throughout the region,” Corcuera stated.
Homebrew Partner Satya Patel stated his San Francisco-based VC firm thinks there’s an enormous opportunity in Latin America provided the move to digital payments. The financial investment in Higo marks Homebrew’s 3rd in the area in the past 18 months.
“This is a remarkable team focused on a problem that is visceral for businesses in Mexico in specific,” Patel told TechCrunch. “They are able to provide organizations with a real-time view of their capital and working capital. Without it, they are at threat. So the chance is to tackle this sharp pain point being felt by a great deal of companies.”
The area’s payments environment, he stated, is still extremely nascent.
“Being the intermediary for B2B tax details offers Higo a chance to offer a real alternative to the conventional method Mexicans are used to doing banking and business,” Patel included.
Article curated by RJ Shara from Source. RJ Shara is a Bay Area Radio Host (Radio Jockey) who talks about the startup ecosystem – entrepreneurs, investments, policies and more on her show The Silicon Dreams. The show streams on Radio Zindagi 1170AM on Mondays from 3.30 PM to 4 PM.