G2 Fintech Fund invests in Licify, a startup transforming construction procurement, payments, and financing in LATAM
Licify raises $3.4 million dollars in its seed funding round, led by Brick and Mortar Ventures.
G2 Fintech Fund invests in Licify as part of its seed funding round, which totals $3.4 million dollars. The round was led by Brick and Mortar Ventures and Accion Venture and included participation from other prominent investors, such as Dash Fund and Columbia University's venture capital fund.
Licify, a pioneering supply chain and finance software company for the construction industry, aims to transform the supply chain by using cutting-edge technology to provide accessible and inclusive digital solutions that connect builders with their suppliers. It offers a range of innovative products and services that simplify supply chain planning, bidding and purchasing, invoicing, and payment reconciliation, improving efficiency and promoting its clients' economic growth.
Licify identified a major market opportunity: the cost of payment delays in the U.S. construction industry reached $208 billion in 2022. The problem is even greater in Latin America. Traditional financial institutions need support in meeting the needs of this enormous industry, particularly those of small businesses, which make up most of the supplier base.
"At Licify, our mission is to empower and connect the construction industry in Latin America by providing world-class technology and inclusive financial services. This investment will allow us to expand our operations, improve our technological capabilities, and broaden our reach with our new operation in Mexico. With G2 Fintech Fund, we are confident we will have a partner in our growth and development in the Mexican market," said Fernando Olloqui, Licify's CEO, who emphasized the importance of securing this funding round.
Licify's technology allows construction companies to issue tenders for their projects, find supplier contracts, and finance them through software that qualifies and vets both suppliers and construction companies, processes contracts, and releases funds to suppliers. Additionally, Licify provides construction companies with software services for planning and managing resources, invoices, and certifications. These solutions speed up construction companies' delivery capabilities and dramatically reduce cash flow problems for suppliers and contractors.
“As a fintech-focused investment fund, we were intrigued to see how Licify is seeking to reinvent the financial system in which the construction industry operates. During the investment review process, we were also impressed by how its platform works and its vision for embedded financing, providing a truly automated, data-driven approach to financing subcontractors,” said Israel Cerda, General Partner at G2 Fintech Fund.
Licify's previous funding rounds enabled the company to reach more than 17,000 clients in Colombia and facilitate more than $2 billion dollars in transactions between builders and their supply chain over the past two years. With this latest investment, Licify is poised to further enhance its product offerings, develop strategic partnerships, and encourage adoption of its digital payment services.
In the third quarter of this 2023, Licify established a presence in Mexico and gained its first clients in Monterrey, N.L. The country represents significant potential for the company, as the construction market is valued at 90 trillion dollars and is expected to grow substantially, driven by the nearshoring trend and the demand it will generate for industrial and residential construction.
