Q: What is the outlook for the trucking industry in Mexico?
A: The trucking industry is highly fragmented. Most companies within the sector are micro businesses with less than five trucks and limited financial education, technology and tools for the financial management of their business. In addition, the sector has been massively overlooked and ignored by financial institutions. There is a large gap in the capital needed and the financial tools that these companies need.
Trucking companies often struggle with daily operations and uncertain cash flows. One of their largest obligations is to pay their drivers on time. These small companies represent over 95 percent of the industry. Giving them access to capital and the ability to collect invoices immediately after delivery is a game changer. Our mission is to build products that enable these companies to get a part of their invoice paid before they even load their vehicle.
Q: How can Solvento’s financial solutions offer relief during the ongoing trucking crisis?
A: Solvento’s goal is to massively shift the dynamics of the trucking industry. Our solutions bridge the gaps in competitiveness regardless of the size of companies. Success is highly linked with the size and reliability of a company, as large companies have access to financing institutions and technology.
The current driver and truck crisis is the perfect storm for a deficit in availability. Some of the main issues are cash flow and bad financial planning. By giving certainty and access to financing, Solvento allows companies to focus on their core business, which is selling and performing transport services instead of using time to collect payments. Our solutions eventually trickle down to the salaries of drivers.
Q: How important is free cash flow in the trucking industry and what role does Solvento want to play as the only fintech focused on this issue?
A: We are building an underwriting model to evaluate customers, which takes into account trucking-specific data points. Solvento adapts and builds different products that aim to automate several processes. The first focuses on carriers and offers an accounts receivable process. We give them the ability to collect as soon as the carrier finishes the delivery. Other products are built for companies that hire and outsource trucking services from third-party trucking companies.
Solvento’s product-building process is based on trucking and logistics workflows, with the goal of expediting and automating them. We are also working on the automation of the invoice and proof of delivery validation, which is a massive bottleneck in the payment process. There are thousands of invoices that companies need to pay. Large shippers in Mexico and Latin America also need to audit them and understand if they need to pay them all. Companies must validate that the service was actually performed, that it was concluded on time and validate the condition of the product at the time of delivery, among several other variables. There are many different complex details that must be audited and we are helping companies to automate this process.
Q: How are common financial solutions different to the trucker-specific solutions offered by Solvento?
A: Solvento is building a product that will be integrated into a transportation management system (TMS) rather than to a traditional enterprise resource planning (ERP) software. We are betting fully on the trucking industry.
In addition, we are building an ecosystem of partnerships that help these micro businesses thrive in their everyday operations, offering everything from less expensive fuel to cheaper maintenance and repairs. Solvento is building a powerful network that provides logistics and trucking-specific tools. While many companies offer fintech solutions, our trucking-specific tools differentiate Solvento from other players.
Q: What are the main challenges of introducing a digital solution in a traditionally nondigital sector mainly composed of owner-operators?
A: The main challenge is to get all stakeholders on board. Convincing shippers that hold all the power and rule the market has been a significant challenge. These players dictate how things are done. We must offer them a strong enough value proposition to motivate and incentivize them to shift.
The main objective is to build a powerful technology-based value proposition that gets shippers on board so they get Solvento embedded into their workflows to pay all carriers and 3PLs. Nevertheless, owner-operators and small companies have a greater need for our solutions. We must be strategic in how we sell them the value proposition and explain the win-win product that Solvento offers.
Q: What is Solvento’s strategy to reach owner-operators?
A: As there are over 180,000 owner-operators, our main strategy is to work with the aggregators that clump them together and hire them. We are working on partnerships with companies that sell products to owner-operators, such as insurers, which already have a large customer base.
Solvento aims to be user friendly for owner-operators. Although we have different stakeholders, these micro companies motivate us. We want their businesses to thrive, prosper and be able to compete.
Q: Solvento has financed over US$5 million to the trucking industry. What role does the company aim to play within the sector in the next five years?
A: Solvento’s long-term vision is to be the dominant platform used to pay for trucking services in Mexico and Latin America. We are building a technology infrastructure that will be so easy to integrate into the trucker’s workflow, that there will be no comparison with other alternatives.
While there is still a long way to go, we are pioneers in the industry thanks to our incredible set of investors and partners. We are in a great position to become that sole dominant player and want to have hundreds of success stories of entrepreneurs, families and micro businesses that have been able to compete and thrive thanks to the way the dynamics shifted due to Solvento’s solutions.
Solvento is a payments platform that streamlines capital provision for companies hiring transport and truck owners. Through the digital tool, users have full visibility of accounts receivables and accounts payables, favoring better cash flow planning.