Evaluating only Finkargo’s profile at its peak — without knowing the outcome — the model ranked Competition as the #1 likely cause. Documented cause: Unit economics.
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Documented cause
Finkargo provided supply chain financing to Colombian SMEs importing goods, allowing them to finance international purchase orders. After raising $30M, rising global interest rates in 2022-2023 increased Finkargo's cost of capital while simultaneously increasing default rates as import businesses struggled with currency depreciation and higher shipping costs. The company shut down in 2023.
Lesson
“Import trade finance has triple macro exposure: USD funding costs, local currency depreciation, and global shipping disruption. Model all three simultaneously at stress levels before underwriting a single loan.”
FAQ
Why did Finkargo fail?
Finkargo, a Colombian supply chain finance startup, shut down in 2023 after rising USD funding costs, local currency depreciation, and higher shipping costs simultaneously increased its funding costs and default rates.