Mexico Venture Capital Overview

This post is the fourth in a series about Latin American venture capital ecosystems. Read the post on the Chilean Venture CapitalPeru Venture Capital, Colombia Venture CapitalHighlighting Latin American Startups. Hopefully it’s helpful. Let me know what I missed and got wrong!

Mexico is the most interesting startup ecosystem in Latin America. It’s interesting because:

  • Population (125m, Mexico City has more people than Chile)
  • Biggest Latin American economy leads to startups servicing local market
  • Proximity to the US leads to more global vision from entrepreneurs
  • US companies with their tech back offices in Mexico
  • US funds with presence in Mexico

There are three important cities for tech in Mexico, although there is activity in many other cities, too.

Mexico City

DF is Mexcio’s largest city, with 25m people (50% bigger than Chile), it has many startups that can be very successful just servicing the DF market. Just like other Latin American countries, these startups have the same problems: big companies that  don’t do much business with startups and are generally conservative.

Guadalajara

A smaller city (4.5m people in metro area) ~500km northwest of Mexico City. It has a smaller market, which forces many entreprenerus to either attack the Mexico City market, or foreign markets. It has some of the best and most engineers in Mexico and is a hotbed for tech.

Monterrey

A northern city close to the Texas border, this city is one of the richest in Mexico. It’s a bit isolated from the DF and Guadalajara tech scene, but produces good entrepreneurs and tech talent. It also has family offices that are active in tech.

Overall, venture capital is not very developed at the seed stage, but has more funds and family offices investing at higher amounts and valuations. These family offices have taken lots of risks over the past few years, which means that the next few years are very important to the Mexican ecosystem. If some of these investments start to pay off with exits, more money will come into the ecosystem. If they don’t, it could set back the ecosystem.

Fund overview

Nazca/Mountain

They are a combination of seed investor and company builder and seem to be more interested in company building in the Mexican market than in other markets. Seem to have a focus in fintech and some interesting ecommerce businesses.

500 Startups

The most active fund in Mexico. They’ve invested in 70+ companies in four years and have some very successful companies in their portfolio. They are part of a trend of US funds and accelerators investing in the Mexican market. Acquired Mexican.vc to get into the market. Based in Mexico City.

Avalancha Ventures – $15m fund to invest in Mexican companies. 6 investments.

Jaguar Ventures – Seven seed stage investments in Mexico.

Variv Capital – “Variv is another pretty active fund in Mexico City, they’ve backed companies along with 500Startups in the past and have some Coworking/Incubation space also.” – Added via Lupin Campos

Alta Ventures – $70m Monterrey based seed investor. 18 investments.

Mita Ventures – Seed stage fund with offices in San Francisco, Austin and Mexico City.

Investo VC – Seed stage fund with 33 investments.

Angel Ventures Mexico – Venture capital fund and angel network with presence across Latin America. Mexican offices in DF, Guadalajara, Tijuana and Mexicali.

Liv Capital – Series of $320m funds focused on different stages in VC. Most seems to be later stage funds.

Techstars

Techstars has a presence in Mexico City, but has not started investing yet. They’re focused on developing the ecosystem.

Wayra

Wayra has 32 investements in five years, with the vast majority targeting the Mexico City market. Wayra is the investment arm of Telefonica/Movistar.

Dila Capital

Private investors who generally invest at series A or later. They’ve been active over the past few years.

Hackers and Founders

Hackers and Founders is a US based company that helps accelerate startups and get them to raise money in the US. They have an office in Guadalajara and have helped at least 20 companies in Mexico so far. They charge equity for their services and also create a stock pool so that all 20 companies in a round get equity in each other.

Gerbera – Private equity with a few venture capital investments.

Angel Investment Network – An angel network in Mexico that also does crowd funding.

Startup Factory – Company builder.

Numa – Accelerator.

Kaszek – VC mostly focused on Argentina and Brazil, but with some investments in Mexico.

Guadalajara Angel Network – Angel network focused on Guadalajara.

Government Help

Startup Mexico – Help for startups from the Mexican government. Also has an incubator.

NAFIN – Government sponsored fund to coinvest.

Family Offices

There are many family offices investing in Mexico. Most generally invest in niches where they have experience. Some will invest in fintech, others in construction and later stage Latin American deals.

Photo Credit: Erika Guajardo