How Cargamos CEO Ivan Ariza grew to $18.1M revenue and 20 customers in 2024.

hey folks my guest today is ivan ariza he's building uh cargomost.com delivery stations for any brand he's an entrepreneur he's had an exit under his belt and again now focused on cargamos ivan you ready to take us to the top yeah okay um so what does cargo most do tell me about a customer who's paying you in cargamus we are trying to to bring any brand to the new cloud logistics so we empower these brands by creating a lot of uh creating a big network with uh micro fulfillment centers and enable all this location for for that guys and so are these real estate investors buying these micro like these facilities you're empowering them to help them run them as a micro like warehouse actually we are trying to to to re-propose that that don't use the space right now so we take and use the space and we re propose to converting this space turning into the micro fulfillment stations you're doing that personally as a company yeah our company it takes both we take an approaching infrastructure so we handle the infrastructure as well and the software in a business are you fine are you buying the real estate no we don't buy we we list in the real estate but actually we make an approach like we work with with their uh buildings with the landlord so our approaches and when we increase the package that leave the station we're going to pay to the landlord so we don't know pay any leasing or we don't buy the stations we only take the space and repropose it i understand tell me about price what do customers pay you on average to use your technology look in mexico you usually need to pay six dollars to deliver a package from mexico city to mexico city our proposal is to decrease the price but a big magnitude so right now our customers are paying more or less one one and a half dollars per delivery so the location more closer to the end customer help us to to deliver this mission but who's paying you these are companies paying big contracts right or is individual consumers paying a dollar today there are a high volume e-commerce brands that i they send us the package and we we held that big brands to deliver the package our first strategy is approach the bitcoin the big brands but yeah so that's what i'm asking what does a big brand pay you on average per month to use the technology and do these deliveries um look right now we are working with the number five three four five the biggest uh recommends right now in in mexico so right now we are delivering for that guys thousands of orders so they pay pay uh package that we deliver more or less one and a half one dollar so right now our figures are close to one million dollar per month got it so all in you're making a million dollars per month right now yeah close to to do that yeah i see can you break a million per month by the end of december yes we are trying to to break that number and we are hoping to do in december 1 1.2 million dollars per month and ivan if you're doing a million right now what were you doing exactly a year ago do you remember uh a year ago we were selling more or less 20 of our current revenue right now okay so call it two hundred thousand dollars per month yeah now is this your revenue or is this total volume and then you take a small cut of the million we take a good a good cause for i mean our sales it's one million dollars we take and we sold our the deliveries and all the operation that we are handling right now but we we take a now we take everything but it's not our profit it's it's just net revenue yeah so what i'm saying is if you're doing a million dollars per month that's your top line revenue do you have any big costs or is it you have sas margins of 83 84 85 percent no our margins right now are close to 80 uh 28 so that's our revenue right now what's your biggest what are your biggest costs there uh the labor um the stations and that's it that's the most um biggest one well sorry what's your gross rate i mean your labor and head count that would be bottom bottom line but when you look at gross revenue right so not net revenue but gross revenue is your gross revenue like 20 your gross margin 20 no yes my our gross margin is 28 yeah okay so you're processing a million dollars of volume of which your gross revenue your top bond revenue is something like 280 000 per month and then after you pay all your employees and stuff then you maybe have profits at the end ah okay we are not making profit right now we need to pay engineers and a lot of people but right now we are not making money sorry you're misunder let me try and rephrase this the million dollars you're doing per month is that volume of of like the the value of the packages flowing through your system or is that your revenue is that kargamos's revenue it's the cardigan's revenue money okay got it so when did you so you're at a 12 million run rate today but why are margins only 28 percent most software margins are 85 okay i'm not sure if i understand but the company what we are doing right now is we take package and we deliver package for each packet that we take on delivery we're gonna we ask for every package and um one two dollars per package all the package that we are delivering right now all the whole package right now and the all the the other companies in the company that are doing logistics we are asking to our company to our clients and they are paying us right now one million dollars if we break in our unit economic that number we're gonna see that our numbers it's more or less in the gross margin we are taking 28 percent and why is that so low though that's my question what most software companies their cost of goods sold is under 20 percent so their gross margin is 80 you're saying you have 80 percent cost basis on that million in revenue you're doing i'm trying to figure out what those extra costs are that most software companies don't have ah okay i got it we are not a completely software as a service company we are not just a software as a service we are we are paying uh the leasings we are paying uh the labor in the middle we are paying uh service partners so we are more um similar like maybe a store in the united in the u.s or maybe dhl so we are not completely a software as a service company we are both we are infrastructure and software as well i see so so last month how much total did you pay for your leases uh delicious uh is not the big company the big company is the labor uh in between i mean we pay any courier once they once uh he makes a deliver um we pay service partner as well with they as we pay a total bill that that has the the location and the labor as well for the autonomous how much did you pay couriers last month uh last month we paid um let me maybe sixty percent of that number so six six hundred thousand dollars yeah i see that's your biggest cost yeah that's my biggest cost got it okay that makes that makes more sense now um okay great uh let's so when did you launch the business when you write the first line of code uh november 19 uh 20 20 19 2019. and have you bootstrapped the business or did you decide to raise we will stop the business the three for at the at the beginning months and then we raise some money so until now we are raising close to 12 13 million dollars when was the last round three months ago and you raised 13 million one round uh yeah west side was seated round yeah so you raised 13 million dollars in your seed round and that was three months ago yeah did you do a pre-seed round or no no the procedure was the money that all the founders and close friends put in the company how many co-founders we have both and it's we are joining up fourth that is not this close we cannot disclose the name right now we are bringing a big name in logistics to the company but we are three three guys right now working really hard in this okay so the three of you the three of you got going in 2019 you did a pre-sea route pre-seed round back then of 1.3 million didn't you yeah okay and then after that in 2020 you did another part of the seed round for 2 million correct correct and then in total in 2021 you raised 2 million in early 2021 and 7 million just recently right right got it so what i what i'm trying to understand is what's so what makes this so expensive why do you need so much money to build this business look across latin america uh if you think about big locations for example fulfillment centers if you look at amazon for example you're going to find that a single location could cost even more than 100 billion 100 million dollars so right now in latin america we we don't have these locations in place we need to create some big locations some automate automatic automatization and put and a lot of it for creating the buildings the the the locations that we need to enable this infrastructure to ls miles so it's quite expensive in the infrastructure side in the software sites is quite similar to other companies but we need to raise money because we need to to implement that and that capability to the market that makes sense and the seven million that you just raised a couple months ago ivan what valuation did you raise that on the valuation uh we don't have valuation right now we are close to serious a so we only raise money through convertible notes but the the the the amount is not on this closing right now okay most people on their seed round if they're raising on a note um there's a cap on the note did you have a cap yeah we have an account but we don't disclose that amount at this time most folks when they're raising that that seed round though they're selling about 20 percent of the business right at the cap right so i mean are you sort of in that standard range uh yeah we are we are yeah we are quite in the standard of the wrench got it so that would have then put you at around a 30 million cap on that on that 7 million note uh yeah more or less we are quite higher than that but yeah well now you're raising a series a at higher than that right yeah why are you raising a series a now what do you need the capital for more more leases more logistics yes and we are starting a stage where we need to put up more money we are we want to connect um a lot of drivers covers trucks locations across the industry so we need to put a lot of money in software new locations to connect all the all these points that right now are disconnected so yeah we are we we want to connect the last mile that is actually really really fragmented industry right now so you're raising a series a or looking at it how much will you target to raise uh right now we are targeting to raise more than 20 30 million dollars okay so so somewhere between 25 and 30 million dollars um who's your biggest competitor in mexico um in mexico um we are seeing maybe the ashell fedex estafeta all the guys that are doing domestic deliveries got it and tell me more about uh team size today how many folks total our team size today is more than 100 people 105 105 people and um if we look at the at the uh at the at the autonomous driver we are talking about more than 10 000 drivers in our network right now and ivan how many engineers and the engineers uh it's more or less housed in the company right now and the 10k drivers that you just mentioned are they all full-time on your payroll or are they contractual as you have orders that you need delivered it's like the the model is really similar to uber so we we bring people and they they decide when to work when they want to work or not but last month you had 10 dollar drivers deliver at least one package that's not the uh active base the active base is more or less uh uh to forty percent of the base that's the amount of drivers that we are so you had 4 000 drivers last month deliver at least one package yeah okay and you paid them and you paid them about 600 000 you told me earlier so the average driver is making about 150 bucks a month no no no no no no uh okay okay okay okay it's not only drivers when we talk about service partners is the whole equation the question include food micro fulfillment stations include the people that that are making sorting routing all that happen in a micro fulfillment station so how many delivery drivers delivered at least one package last month um more or less 30 drivers 3 000 drivers 3 000 drivers okay so you told me earlier that 600 thousand dollars of your expenses last month go to the drivers those three thousand drivers right yeah so if we divide those the average driver is making about 200 bucks a month through your platform is that accurate 200 bucks about um yeah could be yeah more or less yeah 3 000 drivers times 200 ages 600 000 in total expenses but point being that's not their full-time salary because they're only working with you part-time other times they'll go deliver for other people is that right yeah exactly they work for another companies they work for humor rapies that's that's the the the force that we have right now it's the people that work for a lot of uh ice platforms and so in in october how many it sounds like you delivered about eight hundred thousand individual packages is that right um how many about eight hundred thousand eight hundred thousand a hundred thousand yeah more or less because you charge a dollar to a dollar fifty and you're doing a million bucks a month uh we have another components in the in the question we we don't we don't we just don't deliver package we handle as well fulfillment then we handle as well other e-commerce operations uh so yeah in the midst uh we are delivering less than a hundred thousand orders right now per month okay less than 100 you're personally delivering less than a hundred thousand but you make money through packages not just delivering them you do other things as well management in the warehouse things like that yeah i see how many unique brands are you working with e-commerce brands right now it's more or less 20 brands working okay 20 brands 20 brands a million dollars a month in revenue uh obviously folks can sort of calculate that each brand is putting call it fifty thousand dollars through you guys so enterprise motion here what's the next thing and what's the next product line you guys are launching the next product that we're gonna launch is an um uh and a complete treat for fulfillment um we want to move the fulfillment to the next stage so we want to break the package and all the merchandising all the inventory for our mentions and we want to put in the last mile when we talk about last mile is i mean i want to bring that inventory to the next uh five miles uh from you so that's our next move so uh once we have all the data integrated and that we are delivering to our network and all that things our next move everyone about the micro fulfillment to my micro fulfillment around the cities very cool ivan we're rooting for you man thanks for coming on in the meantime let's wrap up with the famous five number one what's your favorite business book my favorite business book um blue ocean strategy maybe was the first time that i approached a strategy number two is there a ceo you're following or studying uh ella musk number three what's your favorite online tool for building gargamos uh it's lack number four how many hours of sleep to get every night last time last night two hours two my yeah my my daughter just just came to this world so last night i just take two hours and and i have already three other daughters so right now we have four daughters that are consuming quite time in the night for me but now it's it's not them it's not the it's just this this week what's the average but yeah the average is about uh five six hours okay six hours you're married with four kids and ivan how old are you 41. last question something you wish you knew when you were 20 uh starting this business early guys there you have it cargamos on a tear launched in 2019 they did a 1.3 million pre-seed round and then did another 2 million on that round in 2020 as they scaled to 200 000 a month in revenue now doing a million a month in revenue but they pay 600 000 of that million out to their delivery drivers they're tackling last mile delivery in mexico for 20 very large e-commerce brands delivering hundreds of thousands of packages per month and also managing fulfillment now looking at raising a large amount they closed the 7 million seed earlier this year sold about 15 to 20 of the business 105 on the team as they look to continue to scale ivan thanks for taking me to the top thank you nathan one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas we call it deal or bust one founder comes on three hungry buyers they try and do a deal live and the founder shares back end dashboards their expenses their revenue arpu cac ltv you name it they share it and the buyers try and make a deal live it is fun to watch every thursday 1pm central additionally 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