In May 2020, Mexican company proAutomation graduated from the Global Advantage incubation and soft landings program at the University of Arizona Center for Innovation (UACI), part of Tech Parks Arizona. But the company’s story goes back further than that.
The company was founded in 2008, and expanded into the U.S. in 2016, when they sold $194,000 of business in automation and industrial process integration, primarily for the automotive industry. By 2019, sales increased to $2 million, with market reach extending into such states as South Carolina, California, Alabama, Michigan, Illinois and Kentucky.
“UACI provided the ideal business support for our U.S. market entry phase,” stated proAutomation president and founder Daniel Beltrán. “They designed a customized program to fit our needs, provided access to high-quality facilities, and made available state-of-the-art technology to help us work toward our objectives.”
Since UACI’s inception in 2003, the program has directly served over 120 companies and impacted thousands of entrepreneurs. As of January 2021, the program had 40 companies enrolled in the program, a record number, and was launching a new Sherbrooke-Rennes-Arizona collaboration to foster innovative companies from Canada, France and the U.S. But Mexico is the global location right next door.
It’s a relationship that the University of Arizona has cultivated for some time.
“The University of Arizona is deeply engaged with the University-Sonora Alliance,” Carol Stewart, the associate vice president for Tech Parks Arizona, told me. “The Arizona-Mexico Commission just had their 60th anniversary year. There are really deep ties. We are exchanging academics and students, doing collaborative research. We’re almost borderless when it comes to the region with Mexico.”
One thing UACI is able to promote when looking at candidate companies for the incubator is the fact that Tucson is in a trade corridor that reaches 68 million potential customers in the U.S. and Mexico, Stewart says.
Housed within UA Global, the Office of Mexico Initiatives is focused on strengthening the University of Arizona's relationships with higher education, research, government and industry partners in Mexico, and is led by Assistant Vice President for Mexico Initiatives Justin Dutram. He says Mexico is Arizona’s largest trading partner by a factor of four, and points to longstanding industry connections in aerospace and mining, among others.
“The best examples are in the mining sector," Dutram says. "Tucson in recent years has really become a hub for mining innovation. We have one of the top mining engineering departments in the world here at the University of Arizona. Caterpillar’s global surface mining unit came to Tucson. Hexagon has their headquarters here. If you look at mining binationally, there is a lot of activity — not just heavy machinery moving back and forth, but software and other things that connect the university to what’s going on in Mexico. We’ve developed solid relationships with some of the larger mining companies active in Mexico.”
That means both specific technical training as well as graduate programs offered to their employees at a regional price.
“That cross-border energy for mining is why some companies have chosen Tucson rather than Denver or Reno,” Dutram says. “You have access to both sides of the border.”
Cross-border access was certainly top of mind for proAutomation, which after graduating from UACI moved to an accelerator in Phoenix. I caught up with proAutomation President and CEO Daniel Beltrán earlier this year.
Tell me about your company portfolio.
Daniel Beltrán: We have two business models: One is service that we offer our know-how to other manufacturing companies, mainly Tier 1 like Magna and Gestamp, and the other business model is turnkey projects for the automotive industry from concept to commissioning, including design, manufacture, assembly, control and robot programming and efficient program management. We have two facilities for projects, one in Hermosillo with 1,500 square meters [16,150 sq. ft.] and another one in San Luis Potosi with 4,500 square meters [48,440 sq. ft.]. All of them with CNC machines, water jet for cutting, lathes, milling machines, etc. All necessary for manufacturing our tools.
Right now we have a presence in three locations: Phoenix, Arizona; San Luis Potosí, San Luis Potosí; and Hermosillo, Sonora with 60 employees in total. We have been doing projects in different countries, some of which are Thailand, China, South Africa, Brazil, India, Canada, the USA and of course Mexico.
Describe how you founded your company originally, and why you are located in Hermosillo and other locations.
Daniel Beltrán: ProAutomation started back in February 2008 based in Hermosillo, Sonora, in the beginning in my house and just offering support with PLC programming. It was just a guy with a computer, cell phone and internet.
After a couple of years doing this I invested in some machinery, hired students from local universities and we developed a great team, and step by step moved forward doing projects, each time more complex and with more value added to our customers. After some time with growth and good sales we needed to have more strength in robotics, so then my partner Mark Marchand joined the team. He helped the company experience exponential growth because of his expertise and know-how in automotive projects and networking, and we continued giving opportunities for young engineers to develop their talent.
In April 2021, Nuvocargo, an all-in-one digital platform for U.S./Mexico trade, announced it had closed a $12 million round of Series A funding, bringing its total funding to $17.3 million. “Nuvocargo will use the funds to accelerate its product roadmap and ramp up hiring,” said a company release. “It is also developing a series of add-on financial products for shippers and carriers, targeting the $125 billion-plus market for supply chain finance” between the two countries. Among its 2020 accomplishments was revenue growth of 25x; customer growth of 9x; and staff growth to 35 employees in the U.S. and Mexico — a number it anticipates growing to more than 100 by spring 2022. Supporting that growth are new offices in Mexico City and Laredo, Texas.
“Nuvocargo launched just 18 months ago, and expects to generate tens of millions of dollars in annual revenue in 2021, its second full year in business,” said Antonia Rojas, a partner at ALLVP who co-led Nuvocargo’s seed round. “We’ve been impressed by how the company has stayed responsive to customer needs and grown even when the economy got tough. We are confident they will continue this path of growth leveraging the $600 billion trade route within within the U.S. & Mexico.”
Hermosillo was the start, but we saw some very good opportunities having a company in the USA. Then we approached an office that we have in Hermosillo called Vamos a Tucson just to see if they could give us some advice. For the next week, we met with a team from the USA: Justin Dutram representing Arizona Tech Park, Felipe Garcia representing Vamos a Tucson, Teresa Bravo from Pima County, Matthew Apfel as a lawyer from Apfel & Associates and Francisco Padres from the Tucson city government. They gave excellent presentations about the opportunities and possibilities that proAutomation could have if we moved some operations there. So, after some meetings and interchange of points of view we decided to initiate the American dream with one office located in the Arizona Tech Park. In our first year we got around $600,000 in sales just in America, and increased every year until last year we got $2.3 million, and we are expecting to grow 20% in 2021. We have very good relations with Mexican universities, and with that in mind we feel really excited to be part of the University of Arizona institution.
With that success in Hermosillo and America we decided to be closer for customers around the Bajio Area where our clients like Ford, GM, Magna, Faurecia, MartinRea, Gestamp and METALSA are located and we were interested in having better service and attention to make the difference. We decided to open a new plant with 4,500 square meters for assembly lines in San Luis Potosí, Mexico.
How has going through the UACI program benefited you in terms of networking and business development?
Daniel Beltrán: The experience of enjoying the help and support from all the Global Advantage team, and the networking provided us through these three years, has been wonderful. We are very grateful to all the people involved. ProAutomation has been growing since the very first contact with Global Advantage … The volume of work and the possible purchase orders that we would win in 2018 helped me to decide to apply for an L1 visa and now an E2 visa. The financial credit, the people available to learn what we do and the market are giving us very good signals that we are doing very well. As our slogan says: “We Make the Difference.”
We now have 10 employees and are becoming stronger in the market. We see an increase to four more employees at the end of this year and 20 employees in total for 2022. We want to contribute to having a facility in Arizona to teach robotics and PLC programming to the new generations that are interested in automotive automation.
Do you see more potential for fellow Mexican companies you know to increase their cross-border presence?
Daniel Beltrán: Definitely the potential that Tucson in particular has is huge, and with the support of the University of Arizona and the UACI I totally recommend taking the opportunity to find out the way to do the expansion or beginning of a new company. In our business model, electric cars are having more presence. Companies like Tesla are growing in Texas and companies like Lucid are initiating operation in Casa Grande, so we need to change our location and we are taking the decision to be closer to our customer in order to have better access and communication. We moved to Phoenix and started this new adventure remembering always where we started.