Federico Antoni, ALLVP: Investing in the Mexican Startup Ecosystem, Ep 59

The Mexican venture capital and startup ecosystem is changing fast. And ALLVP’s Federico Antoni has been there helping it grow since 2012 when he and his partner Fernando Lelo de Larrea started their first fund. The once-CEO of a Mexican fashion company started investing after he failed to reinvent an aging consumer brand. The transition from a corporate position to the world of entrepreneurship might not be obvious, but Federico leveraged his experience teaching at universities to help him raise not one, but three venture capital funds that have gone on to support not only Mexican but also Latin America startups.

I sat down with Federico on this episode of Crossing Borders to discuss how he raised US$6M in 2012, before startups were popular, lessons learned while raising his second and third funds, the Cornershop acquisition for $225M by Walmart, in which ALLVP was an early investor, CORFO’s effect on the Chilean VC ecosystem, and China’s impact on the Latin American ecosystem. Check out this episode to hear Federico’s journey from the corporate world to becoming a prominent player in Latin America’s startup ecosystem.

Failure can be an opportunity for reinvention

We often talk about how teams that have failed go on to build better startups. Many VCs like to invest in second or third time entrepreneurs because they have the grit to face the difficulty of being a founder. Federico wasn’t didn’t start as an entrepreneur, but still believes that a failure put him on his current path. After six years as CEO of an ageing company, he could not turn it around, and it closed down.

Federico used this failure as a learning experience, like any good entrepreneur would. Find out how Federico made the transition to the entrepreneurial ecosystem in this episode of Crossing Borders

The Cornershop Effec

It only takes a few big successes to gain credibility in the local ecosystem. For ALLVP, the clear winner of their portfolio so far is Cornershop, the Mexican-Chilean delivery service that was recently acquired by Walmart. It took Federico and his partner, Fernando Lelo de Larrea, seventeen investments to find Cornershop. There is a lot of learning involved in betting on companies, especially in the Latin American ecosystem.

When ALLVP started in 2012, family offices weren’t so keen on giving up money for unknown, risky companies. The Cornershop Effect, as we call it, has shown investors and entrepreneurs that they can build businesses that can exit and earn good returns. Potential LPs who originally rejected VC pitches are now reaching out to firms to learn about investment opportunities. Listen the rest of the episode to hear about the other companies ALLVP is backing right now.

China is taking the LatAm ecosystem seriously

The US has taken Latin America for granted for too long, says Federico. Now, with China looking at Latin America as a serious investment opportunity and a growing market for tech, the US should be gearing up for a competition. Didi Chuxing is already in Mexico, fighting Uber for market share. As Chinese companies enter Latin America, hire talent, and innovate, US investors and startups will need to work harder to keep a toehold.

Federico has a suggestion for US VCs who are interested in Latin America: visit Mexico City, or Santiago, or Bogota. Listen to the rest of Federico’s tips about doing business in Mexico and Latin America on this episode.

Mexican-born investor Federico Antoni has followed an unconventional path to the startup ecosystem. Yet as an investor in one of Latin America’s biggest exits and success stories, he has turned ALLVP into a prominent player in the local market. Find out what he thinks of the exit, VC in Latin America, and what’s next for the region on this episode of Crossing Borders.

Show Notes:

[1:22] – Nathan introduces Federico Antoni

[1:45] – What does ALLVP do?

[3:43] – How many companies have you invested in?

[6:43] – What did you do before VC?

[9:12] – What made you take the leap to start a fund?

[12:50] – Lessons learned from teaching

[15:25] – How did you raise your first fund?

[18:12] – How has the market changed from 2012 to today?

[21:31] – Learning how to invest through VC

[24:27] – The market should help entrepreneurs fail faster

[25:57] – The Chilean VC ecosystem debate (Cornershop effect)

[31:55] – China in Mexico

[35:00] – Why should US investors look at LatAm?

[41:21] – Federico Antoni’s advice for his younger self

Resources Mentioned: