How Nuvocargo Disrupted the US <> Mexico Trucking Industry [Pivot Case Study]

Coaching job candidates → Cross border shipping

In the high-stakes world of startups, Nuvocargo's journey from a struggling career coaching service to a thriving logistics platform is a masterclass in pivoting with purpose. Founded by Deepak Chhugani, the company's transformation showcases the power of recognizing when to change course and how to leverage personal strengths to find product-market fit.

Originally launched as The Lobby, a platform connecting job seekers with Wall Street insiders, Chhugani quickly realized the business wasn't scaling as hoped. With $1.2 million in funding and a looming deadline, he made the bold decision to shut down operations and pivot to an entirely new industry: cross-border shipping between the U.S. and Latin America.

This case study explores how Nuvocargo went from missing revenue targets to achieving exponential growth, raising $73 million, and becoming a recognized innovator in Latin American logistics. We'll uncover the key insights that drove the pivot and the valuable lessons learned about leveraging unique advantages and knowing when to start over.

1. Original premise?

What problem was the team solving? For who? What was the intended solution?

Working as an investment banker at Merrill Lynch, Deepak Chhugani believed he was truly lucky to have broken into Wall Street without an Ivy League education. He noticed that competent people with similar backgrounds weren’t able to land the coveted finance jobs because they didn’t have access to the right networks. After quitting his job, he built a startup called The Lobby which connected job seekers with Wall Street ‘insiders’ for personalized advice and coaching over a phone call. 

2. Warning Signs

What made them think they needed to pivot from their original premise?

A few months after raising $1.2 million for the company, Chhugani realized that its revenue was nowhere near as high as it should have been. He was having a hard time scaling the business model. In the fall of 2018, he gave himself an ultimatum: if the company didn’t hit $60,000 in monthly revenue by the end of the year, he would cut his losses and shut the company down.

3. Time to Pivot

How long after they started the company did they think about pivoting?

About 18 months. The Lobby was founded in May 2017. Chhugani started thinking about pivoting toward the end of 2018.

4. Initial Funding / Team

Had the company raised money before their pivot? How much? How big was the team?

Chhugani had raised $1.2 million pre-pivot and had a team of 8 employees.

5. New Opportunity

What were the key insights that drove their pivot?

Chhugani’s passion to bridge the gap between the U.S. and Latin America was one of the driving factors behind the pivot. In Ecuador, his father had worked in B2B logistics, connecting Latin American buyers with Asian sellers. While building Nuvocargo, he wanted to leverage his unique advantage of having relationships in Latin America while also understanding western markets. He also saw that it was a traditional industry ripe for disruption.

6. Pivot Validation

How did they validate those insights?

Even with little marketing and a basic sales strategy, Nuvocargo gained traction very quickly. In just a month after its launch in August 2019, the company had already exceeded the highest monthly revenue ever earned by The Lobby. Freight forwarding has many different elements like customs brokerage, insurance protection, and trade financing—by offering all of them in a single platform, Nuvocargo built strong network effects.

7. Length of Pivot

How long did it take to get clear signal the pivot was working?

18 months after Nuvocargo was launched, Chhugani wrote that the company was at an “inflection point.” Nuvocargo consistently showed a > 30% MoM growth in revenue since it started. It also 25xed its revenues in 2020. They had a team of 35 employees and were expecting to grow to a 100+ headcount in the coming year.

8. Pivot Funding

Did Nuvocargo raise money during or after their pivot?

Nuvocargo has raised a total of $73 million since it was launched. In December 2021, it raised $20.5 million led by Tiger Global, and in Jan 2024, it raised a $36.5M Series B led by QED investors at a valuation over $250M.

9. Pivot Outcomes

What happened after the pivot? Did they ever get to product market fit? Where is the company today?

Nuvocargo has been growing exponentially in the U.S. and Mexico with a 5x revenue increase from 2020 to 2021, and the number of monthly shipments through the platform increasing by almost 3x in the first six months of 2022 as compared to the same time period in 2021. The company definitely seems to have gotten to PMF. Recognized in YC Top Companies 2022, it has also been ranked the second most innovative company in Latin America by Fast Company. Nuvocargo has also been focusing on launching products and services to streamline invoicing and payment of carriers. An example of this is QuickPay, a cash advance product for carriers in the Nuvocargo marketplace.

10. Lessons Learned

What are 2-3 key takeaways from Nuvocargo's experience?

1. If it isn’t working, shut it down. And then try again. Chhugani had the foresight to recognize that The Lobby was not working very quickly. When he saw that the monthly revenue numbers didn’t meet the deadline he had set for himself, with VC money still in the bank, he decided to cut his losses and try again. As a founder, it is difficult to start over when you’ve worked hard, raised funds, and hired a team. But it’s absolutely crucial not to burn money, time or energy on a bad idea. When executed right, great ideas work quickly—set clear targets for the company, and if it isn’t working, have the courage to scrap the idea, take the lessons you’ve learned, and start again. 
2. We all have an unfair advantage in something. Find yours and use it. When he built The Lobby, Chhugani was trying to build a company to solve a problem that he had faced himself. “Solve your own problems” was the popular advice doing the rounds at the time. Chhugani realized that as an urban 20-something millennial who had worked at a bank for 2 years, he would end up trying to solve the same problems as everyone else out there. After looking into the startups that were doing well, he realized it made more sense to choose an area in which he had a tangible edge. When you’re picking a problem to solve, make sure to leverage your own unique advantages, find a big market, and have a sound business model.
3. Nothing can substitute real world work experience. Chhugani’s general advice to anyone trying to break into the startup world would be to start working at another startup. According to him, this is the fastest way to skip the early challenges of being a founder (like building relationships with VCs or other founders, having a good network of lawyers, designers, engineers, etc.).

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