Startup Mx: Mangxo

The construction industry faces challenges in securing materials efficiently and affordably, especially in emerging markets like Mexico, highlighting the need for innovative solutions to streamline processes and build trust.

Enter Mangxo.

Mangxo is transforming the construction supply chain by simplifying material procurement, acting as a credit facilitator, and building trust between suppliers and construction companies. By ensuring timely payments and mitigating financial risks, Mangxo addresses the challenges in regions like Mexico, where access to traditional credit systems is limited.

Mangxo Inception Story

Luis Morales and his co-founders, Sergio and Patricio, first met over a decade ago during high school, which eventually sparked their brainstorming of business ideas. Sergio Angelini is the third generation of a family of builders. For years, he has witnessed the daily challenges his father faces and Patricio Naumann is the former CTO of an Argentine company specializing in microloans, called Creditamente. His experience allowed him to quickly identify and develop solutions for a market as specific as construction.

After graduation, Luis later worked for a Chinese construction company Jiaheng Construction in Monterrey, Mx, where he encountered major challenges related to material procurement.

Initially, they considered creating a marketplace for construction materials, but quickly realized the industry wasn’t ready for such a solution so they turned to a more immediate problem… access to credit within the construction industry.

How does Mangxo work?

Mangxo acts as the credit department for construction suppliers, enabling them to extend credit to construction companies without the associated risks.

Construction companies can then use this credit to purchase materials from any supplier within the Mangxo network. If the construction company fails to pay on time, Mangxo ensures the supplier gets paid, thereby mitigating the supplier’s risk.

Luis described the process: "We analyze data in seconds or minutes that would otherwise take a lot of time. We use artificial intelligence to give credit support to suppliers, acting as their credit department."

Mangxo risk management goes beyond numbers. Their methodology emphasizes a deep understanding of the unique dynamics within construction. Central to this approach is the Mangxo Dependency Index (MDI), an innovative metric that examines clients' purchasing behavior within the network. This comprehensive risk assessment prioritizes project sustainability and builds strong relationships with suppliers, extending beyond traditional financial considerations.

Founders

Sergio Angelini, Luis Morales, & Patricio Naumann

Challenges

Starting Mangxo came with challenges, particularly in encouraging a traditionally tech-resistant construction industry to adopt a digital solution. Luis noted that many industry leaders, with decades of experience, were cautious about new technology. Gaining trust from suppliers and construction companies also proved difficult, as they were wary of sharing sensitive financial information.

Initially, Mangxo used equity to manage credit risk but later turned to third-party funding as they scaled.

Misconceptions

One major misconception Luis and his team encountered was the belief that successful solutions in other regions, particularly the United States, would seamlessly work in Mexico.

"The biggest misconception is believing that if something works in the US or elsewhere, it will work in Mexico," explained Luis. They quickly learned that regional differences, even within Mexico, require adapting their product to local needs. "Success in Monterrey doesn’t guarantee the same results in Mexico City—you must be ready to adjust the product for each region," he added.

What’s ahead for Mangxo?

Looking ahead, Mangxo aims to expand its footprint across Latin America to provide solutions for the entire supply chain, rather than just facilitating credit.