Everything you need to know about Mexico’s startup scene

Mexico Startup Guide

Source: Jorge Aguilar via Unsplash

Hi there! It’s Lolita. I’m headed to Mexico with Josh this November and I wanted to learn in public with you before I go out there and start looking for companies to invest in 😉! So, in this post, you will find everything I researched, aggregated in community, and most importantly you will find everything you need to know about Mexico’s startup scene today.

  • Why Mexico will attract investors and founders alike
  • Mexico founders and startups to watch
  • Mexico startups with exits
  • Mexico investors
  • Mexico accelerators
  • Mexico startup pitch events
  • Mexico co-working spaces

If there’s something missing, leave a reply and I’ll update the post periodically.

What everyone needs to know about Mexico’s startup scene

There’s a clear trend towards Mexico producing an increasing number of unicorns and I’m here for it!

Unicorn trend ⎼ Mexico saw its first unicorn in September 2020. The startup is Kavak, a platform that buys and sells used cars, which had a $1.1B valuation then. The latest reports show that Kavak’s valuation increased 8Xs for their Series E. And its $8.7B valuation has made it the second-most valuable startup in LATAM.

Bitso, a cryptocurrency exchange out of Mexico City, became the second Mexican unicorn. In May 2021, they raised $250M in their Series C at a valuation of $2.2B. In June 2021, Grupo Bursátil Mexicano (GBM), a brokerage house that leads the stock market in Mexico, became the third unicorn. Also, in June 2021, Mexican payments startup Clip’s valuation achieved $2B after Softbank invested. Last month, September 2021, Konfío, a fintech startup that focuses on financing, management, and payment solutions, reached a $1.3B valuation. Based on the growing VC funding to Mexican startups, I expect more unicorns to be born!

Source: CBInsights

Mexico is experiencing record levels of VC dollars. In just the last 5 years, VC funding has increased 560%. According to LAVCA’s 2021 Review of Tech Investment in Latin America report, in 2019, 91 Mexican startups received $698M in funding; and in 2020, that went up to 94 startups and $831M invested; $84M went to Seed startups, $453M to early-stage, and $268M to late-stage startups. And, in just the second quarter of this year (2021), Mexican startups saw a $1.3B injection of venture capital dollars. In the third quarter, Mexico saw $1.45B invested. We will see a continued increase in VC funding going to Mexican startups.

Source: CBInsights

Likely unicorn categories ⎼ The SaaS and fintech categories are attracting the most capital. As of February 2021, investors deployed over $880M into Mexico’s leading fintech startups. YoY there’s been an increase of 24% in fintech startups and that’s made Mexico the number one LATAM country in fintechs, by number. Statista says there are over 400 fintech startups in Mexico.

Source: Statista

Likely unicorn birth locations ⎼ Mexico City, Guadalajara, and Monterrey have become the hottest tech startup hubs. As of November 2020, according to a startup survey on Statista, startup geographical distribution pointed to 65 startups in Mexico City, 43 in Guadalajara, and 31 in Monterrey.

Did you know? Mexico City/State is only ~23% of GDP, with Monterrey next at 8% and GDL 7%. Mexico is diverse, more like the USA/Brazil with a more spread out GDP than countries like Chile and Colombia.

It’s about time that we, US VCs, rethink our investment strategies and include Mexican startups in our portfolios.

💰 Interested in learning more about the startup-VC opportunity that lies in LATAM? Read this post.

🗞 Want to follow or join my journey through LATAM’s hottest startup hubs? Subscribe to my newsletter here.

🗓 Want to meet-up with the Mexico startup community for coffee in Mexico City? RSVP here.

Why Mexico will attract investors and founders alike

And now, you may be wondering why you haven’t heard more about Mexico’s startups and VCs. Right?! I wondered that too for a quick minute and then I realized it’s because Mexico is an underestimated market. Yeah, much like there are underestimated founders* & GPs**, there are also underestimated markets***.

So, let’s change that with some facts that will absolutely attract investors and founders alike to Mexico.

  • Talent ⎼ There’s a shortage of experienced talent in the US and an abundance of it in Mexico, and according to President Felipe Calderon, every year Mexico graduates 130,000 engineers and technicians and that’s “more than Canada, Germany or even Brazil, which has nearly twice the population of Mexico.”
  • Investment terms ⎼ U.S. VC default fundraising terms and Delaware C Corp structures are used by Mexican startups. Note: structures outside of Delaware C Corps may be a better fit for Mexican startups.
  • Lower cost of living ⎼ Cost of living per person in Mexico is nearly 3Xs lower than it is in the US.
Source: LivingCost.org
  • Mexicans are big consumers ⎼ For example, in 2019, Mexican consumers made $1.1B+ of Amazon sales; in the third quarter of 2019, Spotify concentrated nearly 85% of their music streaming market in Mexico; and in 2020, Mexico held the largest share of Netflix active streamers at 74.6%.
  • Enormous fintech opportunity ⎼ The reason why so many investors are so excited about Mexico’s unicorn potential is the opportunity that comes from having low credit card (15%) penetration and many consumers being underserved in financial services.

These are all reasons why I’m heading to Mexico City. As a human, I need good internet and I love that I can spend less living in Mexico. As an investor, a growing economy with talent and lots of opportunities to invest in startups on investment terms I’m familiar with makes me feel unicorn fuzzies inside.

🤑 Alright from here on, I share interesting data for you to fall in love with, move to, and invest in Mexico. Enjoy!

*Underestimated founders: founders who can build unicorns but are looked over because they don’t fit the stereotypical Silicon Valley mold

**Underestimated GPs: Underestimated GPs are those who can build funds that will return alpha but are looked over because they don’t fit the stereotypical Silicon Valley mold (or the equivalent in other geographies).

***Underestimated markets: underestimated markets tend to be markets that are not the US or of the original colonizer countries but have the potential to become the world’s startup-VC leaders.

Mexico founders to watch

For more Mexican women founders to follow, check out this thread.

Mexico startups to watch

I’d definitely keep an eye on Kavak, Merama, Konfio, Kueski, and Flink, as they all got a healthy injection of capital in the third quarter.

Source: CBInsights
  • Billpocket, is a fintech that allows merchants to accept credit and debit cards
  • Bitso is a cryptocurrency exchange platform that allows users to buy and sell bitcoin and other cryptocurrencies.
  • Cacao Paycard is a fintech-as-a-service company.
  • Cargamos offers delivery stations everywhere!
  • C-combinator turns Sargassum seaweed into materials & products that help restore soils and oceans, eliminate micro-plastic waste, and get to decarbonization faster.
  • Clara is an end-to-end spend management for companies in Latin America.
  • Clip is a terminal that allows businesses to easily accept all electronic payments methods.
  • Credijusto provides an online lending platform designed to offer easy, reliable, and transparent credit for SMEs.
  • Famosos is an online marketplace that allows fans and businesses the opportunity to hire Hispanic and Latin celebrities for video shoutouts, business endorsements & more.
  • Flat.mx is a property tech startup that is simplifying the home-buying experience by removing the common hurdles of selling a home.
  • Flink is a banking alternative offering an app that provides insight into spending with personalized features to manage your money.
  • Gaia is a furniture eCommerce platform for the sale of home products and design accessories.
  • Guros, insurtech APIs for Mexico
  • Jefa is a digital bank for women that offers access to savings accounts, loans, insurance, easy payments, debit and credit cards.
  • Jüsto is an online delivery-only supermarket chain.
  • Kavak is an online platform that offers insight into buying and selling used cars.
  • Konfio provides digital banking, payments, and software tools designed to boost growth and productivity for small and mid-size enterprises.
  • Kueski uses big data and advanced analytics to approve and deliver loans in a matter of minutes.
  • Luuna disrupting the mattress industry in Mexico
  • Merama is an e-commerce platform that partners with e-commerce product sellers.
  • Meru is the largest wholesale marketplace in Mexico, connecting manufacturers from China mainly to local retailers.
  • Minu revolutionizes the financial health of Mexican employees, offering them access to their already worked salary when they need it.
  • Moons is a technology-driven startup that provides personalized dental services with a strong focus on patient happiness.
  • Nowports is a digital freight forwarder that helps companies improve the import process.
  • NuvoCargo is an all-in-one digital logistics platform for cross-border trade between Mexico and the United States.
  • Petgas.mx transforms ALL types of plastic into energy. It uses a non-catalytic pyrolysis process that transforms plastic into 5 different types of combustibles that are clean, non-fossil fuels: paraffin, diesel, kerosene, gasoline, and butane.
  • Snowball is a collective financing platform where consumers can invest in innovative new companies.
  • Sofía improves the way millions of people take care of their health.
  • Super Seguros is an insurance company that developed radical insurance products.
  • Thalasso is building autonomous drones to harvest Sargassum seaweed from Caribbean beaches and working with micro-biorefineries, to turn the seaweed into numerous products that will improve our planet’s health.
  • UnoDosTres is revolutionizing the consumer payments landscape in Mexico.
  • Valoreo acquires, operates, and scales outstanding e-commerce brands.
  • Vexi, credit cards to help Mexicans build credit
  • Yalo develops an AI-based customer relationship management platform used to help businesses offer a delightful customer experience.
  • Yana, Latin America’s largest mental health app

Mexico startups with exits

2021

2016–2020 M&A

  • Aplazame acquired by Wizink
  • Aventones acquired by BlaBlaCar
  • Facturama acquired by Freshbooks
  • Flinto merged with Grow Mobility
  • Linio acquired by Fallabella
  • Payit acquired by Rappi
  • Petsy acquired by Maskota
  • SinDelantal acquired by Just Eat
  • Yaxi acquired by Cabify

Mexico investors

Mexico based VCs

* If you see an asterisk, they were called out to be most active by the community.

  • *500 Global Mexico is a venture capital firm with more than $1.8 billion in assets under management that invests early in founders building fast-growing technology. They have 2 unicorns among their portfolio, Clip & Konfio.
  • *ALLVP invests in Latin American founders and is an early-stage venture capital fund based in Mexico, best known for investing in Cornershop.
  • *Amplifica Capital is a female-focused fund, investing in companies in seed stage, that improve people’s lives in Mexico and LATAM.
  • *Angel Ventures is an early-stage venture capital investment firm.
  • Avalancha Ventures is an early-stage VC fund that invests in companies that use technology to innovate and deliver products and services for the wider population.
  • *Cometa is a venture capital firm that invests in early-stage technology companies doing business in Mexico and Latin America.
  • *Dalus Capital is investing in the best entrepreneurs developing scalable solutions for significant problems in LATAM.
  • *DILA Capital is a venture capital firm that invests in seed and growth-stage companies primarily in the United States and Mexico. The firm makes investments in sectors such as Consumer, Retail, Energy, etc. Some of the notable portfolio companies are Koa Organic Beverages, Boletia, Tu Canton, Petsy, etc.
  • Dux Capital is a Venture Capital fund based in Austin and Mexico City. They are committed to investing in Latin early-stage startups across LATAM and the United States.
  • Ignia is an early-to-late stage venture capital firm that invests in innovative solutions for the emerging middle class.
  • *Jaguar Ventures is a venture capital firm that seeks to invest in firms operating in the technology sector.
  • Mita Ventures is a venture capital firm that provides funding and strategic mentorship to early-stage technology startups in Mexico with global growth potential, as well as later-stage funding for proven Silicon Valley companies looking to expand into the Mexico/LatAm market.
  • *Nazca is a Venture Capital firm that backs bold entrepreneurs who seek to build tomorrow’s breakout and transforming technology-enabled businesses.
  • Redwood Ventures is a Venture Capital fund, based in Mexico. It focuses primarily on seed, early-stage, and Series A investments in high-impact tech companies worldwide, with a natural focus on Latin American startups.
  • Stella Maris Partners is a venture capital firm. Makes investments in territories such as the US, Mexico, and Europe. Generally invests in tech and life sciences companies that are operating in sectors like Healthtech, Online Retail, and Medical Devices. Notable investments include Hickies, Teamer, Llollo.
  • The Ark.Fund Early-stage VC fund, investing early in ideas that might seem absurd now, but could have a huge impact in the future. Invests in Mexico and Latam.
  • Untapped Global creates opportunity by connecting frontier market innovators to global investors through its Smart Asset Financing™ platform, providing CAPEX financing around the world, and through its global investment network, The Nest.

International VC

  • ACCION is a fund focused on fintech seed investing. ACCION invests across Emerging Markets and looks for startups that promote positive impact in society. Some of their portfolio companies are Konfio, Clip, and Henry.
  • Endeavor Catalyst is a co-investment fund that invests in qualifying rounds of $5M+ raised by Endeavor Entrepreneurs.
  • Softbank Latin America Fund focuses on investing in companies utilizing technologies like artificial intelligence and scout deals in e-commerce and digital financial services as well as blockchain projects.
  • Rally Cap Ventures is a fund based on a community of over 240 fintech operators across the world that invest in fintech, mostly infrastructure. Focused on emerging markets pre-seed and seed, and with portfolio companies such as Belvo, Pomelo, and Dinie.
  • *Kaszek is a venture capital firm that partners with exceptional entrepreneurs to build lasting, high-impact technology-based companies whose main focus is Latin America. In addition to capital, Kaszek offers significant strategic guidance, hands-on operational support, and access to local and international networks. The firm is industry and stage agnostic, investing mainly in seed, series A, and series B.
  • *Magma Partners is a seed & early-stage micro venture capital fund that invests across Latin America and has offices in Mexico. Best known for Fintech, Proptech, and insurtech, Magma is a generalist firm investing $50,000 to $5M from pre-seed to series A. Notable portfolio companies include Kushki, Albo, Nuvocargo, Billpocket, Fanatiz, Houm, Yana, and more.
  • *Monashees is a Brazilian venture capital firm active globally that invests in entrepreneurs committed to creating innovative solutions for a new world. Investing in the beginning stages and following alongside the companies that are revolutionizing markets, creating value, and improving people’s lives through technology.
  • Latitud Fund is a pre-seed & seed rolling fund born in 2021 investing across all sectors and geographies in Latin America. Latitud is targeting 15 quarterly investments, the majority of which are coming from the Latitud community of entrepreneurs. Notable investments include Pomelo, BHub, Dinie, Kocomo, Reworth, Clubbi, Finkargo, and many more!
  • QED Investors is an investment firm that supports high-growth companies and businesses.

New VCs on the LATAM block include Anthemis, Picus Capital, Flash Ventures, Maya Capital, Kayak Ventures, and MGV Capital.

CVCs

  • ACV. AC Ventures is a CVC sponsored by Arca Continental, one of the largest Coca-Cola bottlers in the world. It invests directly in high tech startups (pre-A & series A) in sectors such as logistics, retail, fintech, snacks, and healthy food; and value chain for water and plastics.
  • Bimbo Ventures is the CVC arm of grupo Bimbo, the global leader in the baking industry and an important player in snacks. They invest in foodtech sectors like ingredients, manufacturing, commercial, and distribution. They have run an accelerator program, called Eleva, and an innovation lab.
  • CEMEX Ventures is the CVC fund of CEMEX. With a global focus, they invest in innovative construction startups to drive the construction industry revolution. Notable investments include Jelp, Ipsum, SAALG, Linkx, GoFor, X3 Builders, Arqlite, Modulous, Soil Connect, and others
  • FEMSA Ventures is the Venture Capital fund from FEMSA. They invest in sectors where FEMSA’s platforms can help entrepreneurs advance their ideas through collaboration and shared experiences. Their focus has been on retail tech, e-commerce, logistics, and fintech. Notable investments include Ben & Frank, Jüsto, Yalo, Chiper, Muncher, Cargamos, Apperto, and Swyft, among others.
  • Motorola Solutions Venture Capital is a corporate venture capital firm arm of Motorola Solutions. Makes investments in territories such as the US. Invests in tech companies in sectors like BigData, Mobile Technology, Robotics. Notable investments include Nok Nok Labs, BlueLine Grid, Boundless, Agent.
  • Proeza Ventures is an early-stage VC, backed by the Proeza group, investing exclusively in the mobility space. Notable investments include Autolab, Ottometric, Ridepanda, Joyride, miituo, BusUp, XOS, and more.

Other regional CVC funds investing or with presence in Mexico include Wayra (Telefónica) and MeLi (Mercado Libre).

Women Partner Investors

  • Anna Raptis is the founder of Amplifica Capital, the first female-focused VC fund in Mexico.
  • Antonia Rojas is a partner at ALLVP and a former partner of Manutara Ventures.
  • Christine Kenna — Partner, Ignia. As a Partner at IGNIA, Christine evaluates new investment opportunities, leads deals, manages portfolio companies, and participates on boards. She works closely with entrepreneurs in strategic planning, growth strategies, critical problem solving, and operational issues.
  • Jana Boltivinik is a Founding Partner at Capital Invent. Jana has been leading digital and internet-related projects for the past ten years. She was the Innovation Director of Metroscubicos.com. She worked at Grupo Expansion, where she led the launch of Quien.com, Chilango.com, Adnpolitico.com, and Quo.com. She graduated in Economics from ITAM University and is married with two daughters.
  • Lynee Bairstow An Internet entrepreneur, investor, and advisor, Lynne’s interest and passion for tech startups comes from both hands-on technical knowledge and high-growth marketing/customer acquisition experience. Business owner/entrepreneur in Mexico for >15 years, with Mexican private and governmental entities as clients. Founder of MITA, and VC experience as General Partner of the MITA Seed Fund.
  • Montse Mora is passionate about social entrepreneurs and believes that impact investing will fulfill its promise to shorten the social inequality gap. She manages a fund that invests in early-stage social companies in Mexico and spends most of her time mentoring social entrepreneurs and supporting ecosystem initiatives in Mexico. Montse is also CEO at Frogtek, delivering technology products to deli shops in developed markets with the goal of helping families to manage better their business and earn a higher income.
  • Paula Giraldo is an investment professional with direct experience in structuring equity and quasi-equity instruments (i.e. Revenue-based financing) in several Latin American markets. She is currently the Investment Director at Adobe Capital, an impact investing fund based out of Mexico, where she leads the entire investment process from deal sourcing and investment structuring to closing. Before joining Adobe Capital, she was part of the investments team at Symbiotics, a leading investment boutique specialized in structuring inclusive financing instruments, where she managed one of the top three microfinance investment portfolios. Paula has vast knowledge in impact investing, economic development, microfinance investment vehicles, and the creation and growth of social SMEs. She has a BSc in Business Management from a dual program from Universidad de Los Andes in Colombia and Tulane University in the United States and she also holds a Master of Public Administration from the School of International and Public Affairs at Columbia University.
  • Sandra Sainz is Founder and Managing Partner at Cantera Capital, an early-stage VC fund investing in deep technology innovation in Mexico and Israel. Sandra Sainz started at SV Latam in 2015 as a Managing Partner after fourteen years with the IFC where she headed the investment activities in the Health and Education sectors for Mexico and Central America. At SV LATAM, Sandra was actively engaged in the fundraising activities and in building up the portfolio, with three investments to date, and in process of closing the fourth.
  • Yelena Ioffe is a Partner at Cantera Capital, an early-stage VC fund based in Mexico and Israel focused on deep tech innovation (AI/ML, VR/AR). Yelena is also an angel investor and former Fund Manager for Soldiers Field Angels. Specialties include investment management, business development, new product launch, marketing strategy, B2B and B2C marketing. Kellogg MBA focusing on finance, marketing, and strategy. Originally from Kazakhstan, Ioffe has lived in the US, France, Brazil, and Mexico.

Non-partner investors include but are not limited to: Cecilia Ezquerro & Regina Zurutuza (500 Global LATAM), Daphne Salinas (Sagana), Adriana Tortajada (Santander), Ana Cristina Gadala-Maria(QED), Alexa Clark (Magma Partners), Sofia Garrido (General Atlantic).

Mexico accelerators

  • 500 Startups offers a 16-week seed program in Mexico City and funding.
  • Google for Startups offers 3-month programs for companies using AI/ML and a global mindset.
  • MassChallenge Mexico offers 4-month programs, $100K funding, and more.
  • Orion Startups is a business accelerator and investment program for early-stage startups in the software and internet sector.
  • Plug&Play Mexico is a seed and early-stage investment firm focusing on technology start-ups.
  • Village Capital Finance Forward investment-readiness program for early-stage financial health startups in Latin America.
  • Wayra Mexico offers an accelerator that provides funding, mentorship, and more.

Mexico startup pitch events

  • Finnosummit The independent and collaborative conference bringing together the Fintech innovator community in the Americas and Europe.
  • Mita Tech Talks Hosted by MITA Ventures, the MITA TechTalks unites thought leaders from Silicon Valley, Mexico, and LatAm, in a setting known to inspire exceptional networking.
  • Pitch at the Beach event bringing together the highest level of networking with entrepreneurs, businessmen, businesswomen, investors, representatives from organizations like World Business Angel Investment Forum, Global Entrepreneurship Network, Forbes, Startup SuperCup, Founder Institute, and many more
  • Startupgrind Mexico Startup Grind is a global startup community designed to educate, inspire, and connect entrepreneurs.

Mexico co-working spaces

Mexico City

Other locations

Additional reading

  • AMI | Latin America Market Intelligence Research
  • Cepal | Enabling Latin America and the Caribbean to better harness e-Commerce and digital trade
  • Contxto | Latin American tech, VC, and startup news outlet
  • Crossing Borders Podcast | Long-form interviews with LatAm founders and VCs
  • EBANX | Beyond Borders 2020/2021 Study
  • GSMA | The Mobile Economy Latin America
  • Latamlist | News, podcasts, and opinion pieces in English about LatAm tech
  • Tracción | Podcast about all-things growth and startups in LatAm
  • Magma Partners | Underestimated founders and elite status founders in Latin America

Community contributors 🙌🏽 Thank you to all contributors: Josh Taub, Javier García, Josue Gio, Fer Díaz, Jorge Penalva, Juliane Butty, Itzel Salazar, Cortés Victor, Diego Serebrisky, Ivan Carillo, Santiago Zavala, Mita Carriman, Mariano González Vasconcelos, Sandra Ponce de Leon, Anais Cisneros, Leonardo Miron, Israel García, Emanuel Pleitez, Catriona Forrester, Anna Raptis, Nathan Lustig, Archie Cochrane, Michael Sidgmore and anonymous contributors!

Author Lolita Taub is a stealth mode GP and Scout at Lightspeed Venture Partners, where she invests in community-driven companies. With 15 years working within the Silicon Valley ecosystem, she has accomplished $70M+ in sales and made 70+ investments as an angel investor and VC at Backstage Capital and The Community Fund. Lolita is also a Co-Founder of the Startup-Investor Matching Tool, the GP-LP Matching Tool, and LaaS. Forbes and Inc Magazine have featured her as a woman promoting investment in underestimated founders and funders. She has a BA from the University of Southern California and an MBA from the IE Business School. Most importantly, she is a dog mom to the cutest Dachshund mix, Choco.

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About investing in community-driven cos + supporting our underestimated founder/investor fam. @lolitataub

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Lolita Taub

Lolita Taub

4.97K Followers

About investing in community-driven cos + supporting our underestimated founder/investor fam. @lolitataub