With the focus of many in the startup community shifting towards emerging markets, Mexico is a prime target for VCs looking to support a new group of entrepreneurs. Ideally situated a quick flight away from Silicon Valley lies a growing community of entrepreneurs eager to get involved. With the Mexican Pavilion set to storm TechCrunch Disrupt, here’s what you need to know about the Mexican startup ecosystem.
Mexico’s economy is growing 40% faster than Brazil’s, over twice as fast as the United States, and is already the world’s 14th largest economy (on a GDP based scale). With an ever growing professional middle class, the market is well poised for innovative companies… Some indicators for this are: the massive market potential across industries, especially in mobile (1 out of 5 mexicans owns a smartphone, Google calculated that by 2015 the market will have grown 70%); the quickly growing internet-connected population (40 million Mexicans are connected to the Internet. It’s the third most internet-connected OECD member), and the rapid growth of e-commerce sites (43% just last year)
The startup ecosystem is proliferating in this environment. Mexico holds the largest Startup Weekend presence outside of the United States (Mexico and the UK were the first countries to establish Startup Weekend offices). Countless other events are putting entrepreneurship at the center stage including Women 2.0’s Founder Friday, Startup Bus, Startup World (powered by The Next Web) and Lean Startup Machine.
Universities are also taking an active role in shifting towards “the entrepreneurial mindset” and away from cultural conservatism by financing “knowledge bridges” between Mexico and Silicon Valley. Entrepreneurial centers are becoming more and more popular at universities nationwide, as well as graduate programs that focus on enticing innovation and entrepreneurship as a career path (Schools with entrepreneurship centers or programs include: CEDIM, Tec de Monterrey, ITAM, UIA, Anahuac, UP and UDLA, all top-ranking, private universities in Mexico)
Investors are taking note as well. 500 Startups’ latest graduating class included two Mexican startups, Yogome and Fontacto; and it recently acquired incubator/seed investment fund Mexican.VC to bridge the funding gap in Mexico. Days later, Alta Ventures closed a $70M fund to invest in Mexican tech startups, backed by big name investors including Dave McClure (again). Founder Institute just opened HQs in Mexico City and will accept their first generation of mexican entrepreneurs in the upcoming months. Last August Gerbera Capital and JP Morgan Asset Management invested in Mexican startups Kiwilimon and Dafiti, respectively.
The government is also becoming increasingly aware of the need to advocate for local talent. Last month the official announcement came from NAFIN (Mexico’s National Financial institution) and the Secretary of Economy: there is now a public seed capital fund, which will amount to almost 30 million USD and will have two lines of investment: a seed capital fund and as a co-investor in startups.
All in all, the growth and opportunity in the Mexican startup scene has slowly become visible in more and more events and parts of the world. With Mexicans consistently demanding inclusion on the basis of talent and competing skills. This is how the pavilion at TechCrunch came to happen. When, with little over a week’s notice startups were given the green light to plan trips and register, eagered entrepreneurs took the challenge by storm and will be presenting their companies at this year’s event.
If you’re interested to learn more about what’s going on ‘south of the border’, be sure to come visit the Mexican Pavilion at TechCrunch Disrupt, meet some of the makeithappeners and see what the fuss is all about.
About the authors:
Eduardo Serrano: Currently works at McKinsey & Co He is passionate about technology and entrepreneurship and was a key player in bringing Startup Weekend to Mexico. He’s also been involved in other entrepreneurial events and has been mentoring a series of startups.
Eoin Mcmilan: The maverick behind the first Mexican Startup Bus, an aussie that currently resides in San Francisco has been crucial in giving the Mexican ecosystem visibility in the US. He’s involved in a plethora of projects connected to tech and entrepreneurship, most recently as a Director of Operations in Startup House.
Maria Rocio Paniagua: Currently works as a project manager at Innku, one of the top mobile and web workshops in Mexico. She also blogs for emprendela, a site dedicated to mexican tech entrepreneurs. She has organized all sorts of tech and entrepreneurship events and was a key player in bringing Women 2.0 to Mexico City