Miami-headquartered fintech Marco has secured US$12mn in series A funding as it looks to narrow the trade finance gap for SMEs in Latin America.

The round was led by IDC Ventures, the venture capital arm of Guatemala-based multifund platform IDC Network, and oversubscribed by US$2mn.

Other investors were Arcadia Funds, Barn Invest, Florida Funders, IDB Lab, part of the Inter-American Development Bank Group, Kayyak Ventures, Miami Angels, Neer Ventures and SquareOne Capital.

In 2021, Marco raised US$7mn in seed funding in a round led by Arcadia Funds and Kayyak Ventures, and later raised a US$200mn credit facility from MidCap Financial and Castlelake in 2022.

Marco provides products such as supply chain finance, factoring and asset-based lending, as well as helping Latin American clients with setting up limited liability companies.

It says it is “committed to building the operating system for Latin American SME exporters” and tackling the US$350bn trade finance gap in the region, as well as capitalising on Mexico’s shift to exporting to the US over China.

“Our focus is on creating a product that solves commercial friction and creates economic opportunities for these businesses,” Jacob Shoihet, co-founder and chief executive of Marco, tells GTR.

A proportion of the new funds will be used to launch “a US global accounts product”, Shoihet says, which enables customers to get a US bank account through Marco.

“That bank account effectively enables us to ensure that they’re getting much more efficient control of currencies, foreign exchange rates, wire fees and so on,” Shoihet says.

Marco co-founder and COO Peter Spradling adds: “Through my own journey as an SME exporter, I’ve experienced the struggle of securing essential financing for growth and faced many challenges when looking for alternatives that could support my business.”

Three core reasons were behind choosing to focus on Latin America, Spradling says.

“The nearshoring trendline was a big reason as to why now, and why Latin America,” he says, in addition to the fact the region “has some of the widest commercial credit spreads in the world”.

“The last one is the infrastructure surrounding e-invoicing and the tax database,” he says. “It helps us to get structured data at the point of underwriting, even though open banking and open finance isn’t broadly active in most markets.”

“We’re very ESG-centric, so as long as industries meet ESG frameworks, we’re pan-industry in that respect,” Shoihet adds.

The fintech was founded in 2020 and has offices in Miami, New York and Montevideo.