Mexico VCDay conveys positive image for Mexico’s entrepreneurial ecosystem
By Bronson Pettitt / San Francisco, CA
Mexican entrepreneurs and government officials sought to quell concerns among Silicon Valley investors during a day of networking in San Francisco to showcase Mexico’s entrepreneurial ecosystem.
‘Fear not’ was one dominating theme during Thursday’s event, as investors unfamiliar with Mexico and its entrepreneurs arrived hoping to learn more about the country’s potential.
Ken Frei, CEO of Monterrey-based Screenie, a company that develops recruiting and hiring software for companies, said that investors often look to other regions for startups, such as Asia, China and Brazil, and end up overlooking Mexico’s potential.
In general, perceptions of violence, corruption and the talent pool in Mexico lead US-based investors to look elsewhere, several investors interviewed by Ventura México said.
“What we found is that people who actually take the time to look at Mexico find that there’s an up-and-coming market with a lot of opportunity and a lot of talent,” Frei said. “So it’s kind of a challenge for us to get investors to take a deep look at that, but the ones that do usually find a really good opportunity to make some money and grow the economy.”
Frei, like many entrepreneurs, was there to raise investment interest in his company, which emerged last year as an alternative to the sometimes-inefficient traditional hiring processes of many companies.
Frei said Screenie, which has been growing quickly and which focuses almost exclusively on Mexican companies, had piqued the interest of several investors on Thursday.
According to many investors, Mexico’s technology sector in general paints a positive outlook.
Nearly all of the startups that spoke on panels or gave quick pitches to investors were technology-focused, such as saldo.mx, a platform to allow Mexican migrants living abroad to make payments for utility and mobile services for their relatives in Mexico.
Saldo CEO Marco Montes said utility payments often account for a large share of remittances, and the platform is an alternative to the sometimes costly wire-transfer fees.
“The takeaway is that Mexico is really at a tipping point of explosion,” Lynne Bairstow, managing partner of Mita Ventures, told Ventura México.
Her firm’s investment thesis is to connect Silicon Valley and Mexican companies, one of very few firms doing so, she said.
Property Cloud, a cloud-based luxury housing and property management platform, is among one of the startups Mita Ventures began supporting after investors found a need for such services in Mexico.
Mita Ventures is actively investing in four companies and focuses on IT and software as a service (SaaS) companies with a global market and the ability to be relevant on a larger scale, Bairstow said.
The firm is also in the process of raising a US$100 million fund, she said.
Such efforts are part of a trend among Mexican entrepreneurs and a cultural shift making it easier for people to start a company, Bairstow said.
“It’s becoming more attractive for people to be tech entrepreneurs, and I think it’s the path for growth for Mexico. It has the potential to explode the GDP and give opportunities to people who may have only felt that they had a path to work with large corporations, so it totally shifts the opportunities that are available to a lot of young Mexicans,” she said.
Government officials also spoke highly of Mexico’s potential, and especially Mexico City’s.
The capital graduates 16,000 engineers per year, surpassing any other city in the world, according to Salomón Chertorivski, secretary of Mexico City’s economic development office.
“Mexico City is a very cost-efficient city to start a business or invest,” he said, in addition to its “very decent purchasing power” and “median age of 30 years.”
Chertorivski underscored Cisco’s announcement last year to open a support center in Mexico City, part of US$1.35 billion the company is investing in Mexico this year.
“We’re having a Mexican moment and a Mexico City moment in particular,” Chertorivski said.
Thursday’s event was organized by the Mexican Association of Private Equity (Amexcap), the second time it was held in San Francisco.
“This type of event, and holding it in San Francisco, is important to getting greater visibility with the Mexican venture system,” Bairstow said.
Early estimates indicated that more than 200 people attended, nearly double last year’s number.
“It’s indicative that there is an interest in the US to seek opportunities in Mexico,” Alex Rossi, co-founder and managing partner of Latin Idea Ventures.
Mexico has “a very lively, active entrepreneurial community, where there are strong interests in developing new businesses and creating not only new businesses but also new ways of thinking about how to start a business,” said Rossi, who added that he had seen several interesting proposals and was approached by a few startups.
Some investors said this year’s event conveyed a more active entrepreneurial ecosystem.
“[With] the number and quality of attendees, the conference organization and the information that was imparted — we can see how far the Mexican venture system is growing, even in one year,” Bairstow said.