One of the most encouraging facets of the growing technology sector in Mexico in the rising passion and skill of domestic entrepreneurs. Tech startups have been sprouting out of the grass roots in Mexico City, Guadalajara, Monterrey, and other hotbeds for years now, and they are really starting to make a mark, especially in the financial services tech field.
One person who has been on the ground watching the transformation is René Lomelî. He runs the Mexico City office as operations director for 500 Startups, a global accelerator in Silicon Valley that offers early-stage funding to promising young companies of anywhere from $50,000 to $1 million. So far, there are more than 40 Mexicans startups in the organization’s portfolio, and Lomelí thinks that the capital is on the verge of an explosion.
“Everyone is talking about fin tech,” said Lomelí. These local fin tech startups are creating solutions to the all-too-common inefficiencies in Mexico’s traditional banking areas, including online payments, credit score tracking, and mortgages.
“You will see companies growing their teams from the 10 to 15 people that they have right now to 50 or 100 people. I believe that is coming this year.” – René Lomelí of 500 Startups
Konfio, an online lending platform that helps small businesses access credit, is one company in the 500 Startup portfolio. While Lomelí believes this is the best of all the options, the fin tech startup scene is so hot right now in the capital that Konfio is already facing competition from several other similar ventures. Conekta, an online payments app, is in the same position. It is another promising young firm working to outmaneuver the others in the market that are trying to capitalize on the same customers.
“There are a lot of things that are happening here,” said Lomelí. “There are a lot of different players — entrepreneurs, VCs, angels investors. There is a ton of activity going on in Mexico City, and I believe that this year we are going to hear about companies doing great stuff.”
The city is beyond the initial stage. There are now a litany of new tech companies — in fin tech and beyond — that have already gone to market, proving themselves and their products, for the past three to five years. With their established track record, he expects many will go for their Series A funding in 2016 and 2017. Then comes the rapid expansion. “You will see companies growing their teams from the 10 to 15 people that they have right now to 50 or 100 people,” said Lomelí. “I believe that is coming this year. They have a solid product, they have sales, they are growing.”
He notes the impact of 500 Startups and other accelerator programs as well as government incentives in pushing the interest. While this isn’t Silicon Valley — yet — Lomelí sees this momentum leading to acquisitions and even more foreign interest. “There are a lot of different entrepreneurs coming from other regions to have a business here because there is a ton of opportunity,” he said.
That opportunity talk isn’t just rhetoric. Multiple startups from other places in the region — including Rocket from Colombia — that came to work with 500 Startups in their Mexico City program never left. Rocket is a credit and financial management platform for consumers, and it planned to just go through the accelerator track for a few months and then return home. But the founders decided there was no better place in Latin America to be, so this Colombian startup now has most of its team in Mexico City. “It is a much larger market, and there were many more opportunities to raise money,” said Lomelí.
With so much local talent already, the future only looks brighter as networks of likeminded, successful company founders develop. They are only going to continue to promote themselves and the general entrepreneurial spirit throughout the country.
Leonardo de la Cerda, CEO of the Guadalajara-based online loan lender Kueski, echoed these sentiments last year in a Nearshore Americas documentary about Mexico’s tech world. “The best and most intelligent people in the country are not leaving to go and work for an international firm in another country,” he said. “They are staying here and working for their people.”