By Fran García
Over the last months I have noticed an interesting trend in the Mexican tech ecosystem: many entrepreneurs that are building in Mexico are not Mexicans. I decided to analyze this phenomenon with data. From all the disclosed deals in Mexico during 2023 by LAVCA, an astonishing 38% of early-stage funding rounds (up to $15 million raised) of companies operating in Mexico were secured by startups with non-Mexican founders. This data, covering from January 2023 to September 2023, highlights a significant gap in domestic entrepreneurship. In perspective, 2 out of 5 companies in Mexico are founded by non-Mexicans.
Several factors might explain this phenomenon. Firstly, other Latin American countries like Argentina, Brazil, and Colombia have been ahead in the tech entrepreneurship wave. Brazil, in particular, has seen success stories like Nu Bank and Creditas, inspiring a generation of entrepreneurs. Argentina’s Mercado Libre and Colombia’s Rappi have had similar effects in their respective countries. Previous employees (non-Mexicans) from these companies are setting in Mexico to start their own ventures. Mexico is experiencing a delay in this trend, but the rise of companies like Bitso, Konfio, Kavak, and Clip is beginning to inspire early Mexican employees to venture into starting their own startups.
However, in Mexico, the desire of stable and well-compensated careers in large corporations, banks, and consulting firms is another factor deterring potential entrepreneurs. These industries offer attractive career paths, making the risky venture of entrepreneurship less appealing. This dynamic differs from the scenario in countries like Brazil, where the tech industry has been bolstered by supportive measures from entities like the Central Bank, further encouraging entrepreneurial endeavors.
Another explanation that I have is Mexico City. Mexico City is emerging as a hub for entrepreneurship in Latin America, thanks to a combination of key factors. Its proximity to the United States is a significant advantage, allowing for quick, two-hour flights that facilitate close business relations. The city’s dynamic culture and social scene further enhance its appeal, attracting digital nomads (non-Mexicans) during the pandemic who not only embraced the city’s lifestyle but also decided to stay and establish their businesses. This blend of accessibility, vibrant community, and a growing base of innovative talent positions Mexico City at the forefront of entrepreneurial growth in the region.
Despite these challenges, the future for Mexican entrepreneurship is far from bleak. An increasing number of skilled professionals are showing interest in the tech industry, a sector gaining more visibility through consumer products from companies like Kavak, Bitso, and Nu Bank. This growing interest, coupled with the professional landscape’s evolving dynamics, suggests a shift towards more homegrown entrepreneurship.
In conclusion, while the current statistics might suggest a lag in Mexican entrepreneurship, the underlying trends indicate a change on the horizon. By 2025, I expect that more Mexicans will take the leap into starting their own companies, driven by increased exposure to the tech sector and the success of early pioneers. The stage is set for Mexico to catch up with its Latin American neighbors in nurturing a robust, domestically-driven entrepreneurial ecosystem.
