It was 2008 when Paul Ahlstrom from Alta Ventures chose Mexico as the next big opportunity to create and promote a venture capital industry. It’s been a long time since then. I was able to visit Monterrey, Mexico a couple months back and see a growing startup ecosystem in Mexico that was starting to become noticed. Here’s a brief overview of the last six years, during which Mexico developed into an operational entrepreneurship ecosystem and one of the best options for the entrepreneurs in Latin America.
For a long time the roadmap to success for anyone in Mexico was; go to a private university and get a job in a big company, climb your way up, and end up having a great and secure job. This has changed so radically that today we find that recently graduated engineers are looking to create a startups instead of accepting a job offer in the U.S. In a short time there has been the development of an entrepreneurial ecosystem that’s growing in every aspect: startups, funding and education. Recent statistics for Mexico show that:
- Each year approximately 118,000 engineers graduate from college
- 80 universities are focusing on engineering as their main area of knowledge
- There are 45 venture capital funds
- There are 100 accelerators and 20 incubators
- 6.3% of people between the ages of 18 and 24 own their company.
In 2012 Dave McClure with 500 Startups decided to take over LatAm Startup Accelerator Mexican.VC, and opened the first 500 Startups office outside the Bay Area, focusing on bringing to Mexico Startups from all over the world.
In 2013 the Mexican government created the INADEM (National Entrepreneur’s Institute) with the goal to organize all the public funding for startups and small and medium businesses. For that purpose the government earmarked a total of almost $600 million dollars to invest directly into business and venture capital funds and as collateral to encourage banks to finance new projects.
Being a startup in Mexico is starting to get more “friendly,” compared to only a few years ago when you could only find less than 10 VCs, and a couple of startups meetings, mainly in Mexico City. These days you can start looking for angel investors to launch your project, you can probably find seed money and series A with regional VC’s, find great meetups like Startup Grind, now in four cities, also find conferences with speakers like Guy Kawasaki, Richard Branson, Peter Diamandis, and Kevin O’Leary just to mention a few. And there are at least four entrepreneurial ecosystems in development: Mexico City, Monterrey, Tijuana and Guadalajara.
In a recent interview, Kevin O’Leary expressed to me openly that “Mexico is an undiscovered opportunity,” a country where you have a big enough market to create a product (115.69 million), a border with the U.S. that includes a Free Trade Agreement, and on the other side a door to Latam.
In the next couple of years Mexico will be having more great opportunities. The internet penetration is only 38%, the smartphone penetration is 37% and the social network penetration is 36%. This means that as numbers scale the internal market will grow rapidly in young (average age is 27) custumers and consumers.
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