How Nowports used Capchase Grow and Capchase Earn for ultimate capital efficiency
As a provider of global freight solutions, Nowports knows a thing or two about efficiency.
They’re a YC Alum with a Series A under their belts, and in their words, they’re reinventing the international supply chain: improving the customer experience by delivering real-time information on goods in transit.
Nowports has customers all around the world: from Asia to Europe to Latin America where they’re based, and, where the freight forwarding system hasn’t had an update for the past 100 years.
With great growth comes great expense. Recent shipping costs have been soaring: moving a container from Asia to Latin America used to cost around $2,000 USD and now it can be as high as $13,000.
Like most companies, Nowports pays the cost of the service upfront, with the customer paying some time afterwards. And, with supply issues facing companies world over, it’s a busy time for business - meaning their working capital needs are greater than ever.
Nowports raised a $16M series A in 2020 (with an extension in September 2021), so access to cash isn’t an issue. But using Equity Round money to sustain this working capital isn’t efficient (and not what investors wanted them to be burning money on either).
Diego Coria, Global Finance Manager @Nowports and his team looked at venture debt as another option, but chose not to move forward due to high interest rates and stock warrants.
That’s where Capchase came in.
“Capchase helps us with working capital so we can concentrate on other investments … this way, our Equity Round money is strictly spent on growing the company: new operations, overseas expansion and maintaining the cost of HQ” - Diego Coria, Global Finance Manager @ Nowports
“We love how we can email and get an answer really quickly - that’s something you can’t put a price on.”
Nowports has been able to expand their global footprint with offices in Mexico, Chile, Colombia, Peru and now Brazil which launched two weeks ago, but is expected to to be one of their biggest markets worldwide. They’re continuing to help SMEs and other companies improve the import process.
In addition to using Capchase Grow, Nowports recently also began using Capchase Earn to unlock low-cost, efficient capital. With Capchase earn, Nowports earns 3.00% on their idle equity fund, which brings the total cost of their capital down to 1-2% overall.
“When you raise money, you have a lot of money standing still in your bank. You need to take action with that money so it starts producing.
Capchase Earn gives us the flexibility to make our original revenue financing capital a little bit cheaper which is a big benefit for us. It means we can extend our runway that little bit longer.”
Nowports made use of the flexibility of Capchase to access cash which helped fund their day-to-day operations and tapped into lowering the overall cost of their financing by pairing two Capchase products together. For them, this was the most efficient way of operating and managing their cash in a distributed money model.