In the scope of Latin America’s financial technology (fintech) industry, Mexico is way ahead of the curve for potential investments and has been for some time. The country is full of experienced business founders who are bringing innovative ideas to the table, creating a perfect hunting ground for venture capital firms to find their next high-impact target.
The diverse, competitive, and ever-evolving financial services market is a dream come true for Mexican entrepreneurs as it has all the right ingredients for a successful startup. Fintech solutions can be disruptive, transformational products that solve difficult problems, and tech VCs are hungry to throw money at them, making them extremely worthwhile choices for new businesses.
Mexico’s Financial Infrastructure
Over the past two decades, Mexico’s government and private financial institutions have put a solid financial infrastructure in place. As a result, companies such as BBVA, Citibank, BlackRock, American Express, VISA, and Western Union are all present in Mexico and possess large-scale market coverage.
“Mexico is clearly undergoing a period of rapid change, which is being played out across its technology infrastructure and market regulations and continues to increase its appeal to the international audience,” said Alice Botis, head of Latin American business development at trading technology firm Fidessa, in a blog post. “Domestic brokers will need the right technology to capitalize on this attention, so many are seeking high-frequency trading algorithms, efficient routing of international orders through low-latency connectivity networks, and more sophisticated risk controls.”
Analysts say that around half of the country’s population is under the age of 30 and Mexico now graduates more engineers per capita than any other country in the world. But startups aren’t just for student; seasoned professionals are also looking in that direction too.
Mexico’s fintech niche already boasts a truckload of great entrepreneurs. Existing fintech startups include PayClip, Konfio, Prestadero, Pago Facil, Play Business, Bric, and Kubo, to name a few, many of which were started by individuals with experience in Silicon Valley tech companies.
During an interview with digital news outlet, PanAmericanWorld, Fabian Aguilar Urbán, Fund Manager at Angel Ventures Mexico, explained that more startups are emerging from ex-employees of companies like Cisco, Google, and IBM, mentioning that they gain a lot of skills working at a big corporation.
Problems + Talent = Opportunity
The success of Mexico’s financial services industry is contradictory of its habitat. Top financial institutions have been succeeding in a country where more than half of the population don’t have access to banking, the credit gap for SMEs is around US$10 billion per year, and savings fraud reportedly reduces GDP by around 3% per year.
But the fact that there are problems to be solved, and the talent and innovation is here to make that happen, is what makes the country such a great choice for tech VCs. Now is the time to strike!