Series B Startups in Mexico (beta) •

Contxto – Playtime is over. Series B stands for Big Bucks, but also for Boosting… majorly. Startups in Mexico that go on to raise this kind of round often use it to escape the pull of their local hub to take over the rest of the country’s massive domestic market.

Series B means that MVPs have been developed, launched, and tested in the market. Now it is time for that scalability to kick into gear.

Even though the exponential Seed and A stages seem impressive in terms of raw growth rates, a Series B expansion—though at a lesser rate—is often the moment when one makes a mass-market out of what used to be a niche.

The common wisdom surrounding “ideal” growth asks for a startup to triple in size every year for two years and then to double yearly for the next three. Or “triple, triple, double, double, double”, T2D3 for short.

It’s those last Ds that often start moving a startup towards that coveted ten-digit valuation. And more often than not, it is at this point of a startup’s growth that the big bucks of a Series B come in handy.

But a Series B doesn’t mean a free pass to the realm of unicorns. Perceptive readers will detect one now-defunct startup in our infographic. One that seemed full of promise back when it raised its B way back in 2018.

This article is still a work in progress. If we’re missing data, please submit it below or reach out to [email protected].

Series B Startups From Mexico (beta) — series b startups from Mexico (beta)

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Series B rounds

In Mexico, Series B rounds can range from US$125 million to around US$0.5 million. But don’t fret about the titanic difference between those two sums. Indeed, either can result in the aforementioned B-series growth.

The amounts raised are more a matter of timing, geography, market, and sector.

But don’t be fooled, AlphaCredit’s massive US$125 million Series B was the biggest ever equity round raised in Latin America.

However, tens of millions being sunk into a big fintech offering credit to thousands of people is not all too rare. This was the experience B-rounds like Argentina’s Ualá with US$34 million, Brazil’s Nubank with US$30 million, and Colombia’s Addi with US$15 million experienced.

Conversely, less capital intensive companies need less money to grow at that T2D3 rate.

Then again, timing is often the crucial factor beyond a startup’s sector.

In times of Covid-19, we’ve gone from an all-time record Series B round to scarcity in a mere two months. Since the pandemic hit Mexico, the money has dried up a bit, with companies delaying or reassessing their financing rounds until the turbulence is over across the board.

If my theory holds, we’ll see a return of these sorts of rounds by 2021, just with less money awarded per deal.

Series B startups in Mexico

Mexico’s Series B startups are centralized in more ways than one.

On one hand, it is clear that Mexico’s reputation for being a fintech hub is justified. Sectorially, fintechs have dominated over the past 10 years, making up 16 of the 30 rounds registered on our database.

This in part helps to explain the geographical concentration. Financial hubs are logical starting points for many fintech founders. But still, the numbers as seen on the database are impressive:

Five out of every six Series B rounds in Mexico have been awarded to startups based in Mexico City. The rest aren’t evenly distributed either. Three come from Mexico’s second city, Guadalajara, one from Monterrey, and another from Culiacán, out of a total of 30.

Got to even out those numbers: When’s Guadalajara-based Contxto’s Series B scheduled for?