Nine Four Insights

Why We Invested: Latii

We’re delighted to announce our newest investment in Latii’s $2.1M Pre-Seed round alongside institutional and angel investors including Era Ventures, Foundamental, Maria Davidson (the CEO of Nine Four portfolio company Kojo), Chase Gilbert (the CEO of Nine Four portfolio company Built Technologies) and Alex Hartman (the CEO of Welcome Homes). Nine Four Ventures is excited to partner with Santiago, Alejandro, and the entire Latii team and support their mission of creating supply chains that are faster, cheaper, more predictable, and diversified.

Here is a bit more about the business, opportunity and why we invested:

Latii is a construction materials sourcing platform that connects US buyers with LatAm precision part (e.g. windows, doors, castings, and fasteners) manufacturers. Latii’s goal is to help buyers strengthen, streamline, and diversify supply chains with high-quality LatAm manufacturers that produce products within specs at lower prices and with shorter lead times. Latii’s integrated, cloud-based platform improves transparency, increases predictability, and reduces traditional costs, time, and overhead required to source and manage orders.

Latii was born out of Santiago and Alejandro’s previous roles at Tul, a successful LatAm construction tech startup, where the pair discovered underutilized and high-potential LatAm manufacturing capabilities that could impact rapidly evolving US supply chain needs. The manual, offline, bespoke status quo made it difficult to transact, and Santiago and Alejandro zero’d in on building a solution. After helping Tul grow to tens of millions of dollars in revenue as CFO and VP of Commodities, respectively, they left the company to found Latii.

Santiago and Alejandro made it immediately clear that the business is addressing a timely, multi-trillion dollar pain point with a thoughtful solution. It’s no secret that waves of COVID and increasing global trade tensions have hit supply chains hard over the last three years. Increasing demand and limited supply in APAC have driven costs up and lengthened lead times, which thin margins, lower customer experiences, and create an incredibly challenging operating environment. US buyers have no choice but to adapt and be open to the idea of regionalizing supply chains.

The mindset of re/near-shoring supply chains was underway many years prior to COVID. For example, the auto and aerospace & defense industries have built significant manufacturing facilities in Mexico over the past decade, and in 2019, Mexico made up 23% of all North American auto production, compared to less than 10% 15 years ago[1]. The recent investment into the region has trained and upskilled labor forces and helped develop a new manufacturing “muscle” focused on quality and output. In addition, LatAm-based manufacturers strive for greater access to the US market. Inflation is out of control, so carefully introducing more LatAm-based supply and subsequent competition into the US market could help reverse rising prices.

Santiago and Alejandro’s collective backgrounds, networks, and experiences led them to the same conclusion: trust in supply chains is non-negotiable. Buyers will never transact on a platform without trusting that they will receive what they need. Everything Latii does, from building valuable software to conducting deep due diligence, completing inspections, keeping high standards on the supply-side, and offering white-glove managed services on the buy-side, is designed to build trust between buyers and sellers. The goal is to increase confidence and reinforce repeat buying and selling behavior over time.

It’s worth noting how our relationship with Latii highlights and reinforces our strong desire to work with and support founders at the earliest of stages of company building. As a strategic investor, we look for opportunities where we have a unique knowledge, product, or distribution advantage, and can help founders grow faster and more capital efficiently. It is our hope that our attention and efforts help our portfolio companies create more value for each stakeholder they touch.

If you’re interested in joining Latii to build the future of cross-border precision part procurement, they’re hiring! Congrats again to Santiago, Alejandro, and the entire team. We’re just getting started!

[1] Goldman Sachs: Global – Supply Chain, July 2020

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