Don't worry, we speak : Español (Spanish), too!
Contxto – Okay yes, there are some big startups in Mexico such as Clip, Konfío, and Grow, but honestly those are way too obvious. Everybody already knows them, so if you’re here to read more about the big guys, I’m afraid you won’t find what you’re looking for.
Instead, we plan to offer you an amazing read about a handful of undermined, but extremely interesting and promising startups in Mexico.
Mexico’s economy, a refresher
It should be unsurprising that startups in Mexico have taken off over the past few years. The country has some real strengths going for it. At around 130 million people, Mexico is the second-largest market in Latin America, and the biggest Spanish-speaking country in the world.
Technology in Mexico has evolved by leaps and bounds thanks to its turn-of-the-century discovery of open markets. Proximity to the United States has not only allowed it to catch-up technologically since, but has also opened the doors to increased flows of foreign direct investment.
Investors and founders would do well not to forget the additional 10 million-plus Mexicans north of this country’s border. The Mexicans in the US form the backbone of an important two-way channel of capital, intel, tech, best-practices, and culture.
But Mexico’s geo-strategic position should not be simply defined by the United States. Indeed, the country is rich in FTAs (free trade agreements) with places ranging from Japan to the European Union.
Therefore, this export-driven economy has gone on to prioritize the development of startups focusing on fintech, e-commerce, and retail solutions. Think of this startup ecosystem as a key bridging network between two of the world’s great regions—North and Latin America—and the world.
And thank goodness for these startups, because these high-impact ventures have been one of the few drivers of economic expansion in Mexico after decades of sluggish growth. However, this could explain the distinct lack of unicorns in the country—although I’ll probably be editing this entry soon, if fintech Clip or Konfío has anything to say about it.
The Mexican startup ecosystem
Mexico enjoys one of the most robust and diverse venture capital (VC) ecosystems among Latin American countries. Along with the big pockets, there are some of the most exquisite acceleration programs in the region, not to mention the former government’s support, which jump-started the ecosystem.
For this reason, Mexico is now the second-largest ecosystem in Latam, just right after Brazil. Furthermore, capital investments in the country more than tripled since 2017.
Some of the most relevant players in the Mexican venture capital ecosystem include Variv, ALLVP, Dila Capital and Ignia. But make no mistake there are other smaller players quite active in the local startup community including Trebol Capital, Orion Capital and Toro Ventures, too. In fact, we just launched an in-depth overview of the most actives Mexican VCs. Go check it out.
Related article: Top 10 Venture Capital funds in Mexico
Some of the most in-demand accelerators in the region are also located in Mexico. 500 Startups Latam, Techstars, Rampa, Startup Mexico, and MassChallenge offer quality programs with different investment theses for every type of founder and company.
Contrary to what many people think, Mexico still doesn’t have any US$1 billion-plus companies (despite some people considering Softtek and Kio Networks as such). Nevertheless, let’s shake off this obsession with the “big B”.
Top 11 Mexican startups for 2020:
Atexto is a speech recognition and chatbot startup from Mexico. It collects vast amounts of audio recordings and hires independent freelancers to transcribe the audio to text through its crowdsourcing platform. Finally, the ML algorithm absorbs all the transcribed information to identify conversational patterns and implement it on businesses’ voice assistants and chatbots.
Atexto’s algorithm is also a polyglot. Language isn’t a barrier since it can train bots in multiple languages. Nevertheless, it is currently focusing on English, French, and Spanish. Not only that, but it’s able to recognize multiple accents and respond accordingly.
The company raised an undisclosed round last month.
Who says digital marketing should be exclusively digital? I actually don’t know the answer to that question, but Klustera does. The Mexican startup developed an omnichannel, marketing augmentation platform for brands to identify their customer’s offline and/or in-store activity through a combo of both hardware and software.
Say goodbye to vague focus groups and observation. The company uses routers powered by their very own firmware along with machine learning and data wrangling algorithms in order to gather offline data and bring it back online. This way it is easier to analyze and visualize consumer patterns and behavior trends.
Given the high rate of insecurity in the country, Hammer appeared like an oasis in the desert. Its mobile app allows people to protect their phone against theft, notify relatives during a kidnapping or car crash, and even take selfies of the villains.
The app is still only available in Android, but its smart solution to a big problem generated a ton of PR for the company, resulting in a lot of downloads and probably a couple of impatient iPhone users.
Also related to the day to day problems of locals are government budgets, public initiatives, and city infrastructure. OS City identified a variety of bottlenecks in which blockchain and artificial intelligence (AI) could contribute to creating a truly smart city.
OS City is, as the name implies, an operating system for a city. Its algorithm connects to all data feeds such as social media, sensors and city hotlines in order to optimize all city needs including urban and spatial development, citizen sentiments, as well as internal document and certificate traceability.
Recently, it participated in UNICEF Ventures’ program for socially impactful startups. In fact, two Mexican startups joined the program; the other one being Prescrypto.
At its core, Bridgefy is an internet company. It doesn’t provide the internet itself, but its platform enables people to connect even when there’s no Wifi or data connection nearby. This is possible thanks to its mesh network technology.
Bridgefy is a great case of organic user acquisition. It has been downloaded more than 1,500,000 times around the world, and has become a lifesaver tool for people in times of crisis, from the Hong Kong protests to Turkey’s earthquake.
To date, the Mexican startup has raised a total of US$1.5 million to date.
A minimalistic yet sophisticated day-to-day tool for your average office worker—also, known as a godín in Mexico, with all due respect to my dear godinez out there. Minu helps employees get their hard-earned cash sooner rather than later.
Its platform allows people to retrieve their salary before the end of the month or quincena, accountable to the number of hours they’ve worked, up until that moment in time.
The company raised a total of US$6.5 million in pre-seed capital last year, one of Mexico’s largest pre-seed rounds to date.
We’ve said it before, tech skills are in extreme demand and supply is still short. Many companies offer basic courses on web development and programming, but sometimes that’s just not enough. What happens when a company needs super-specific and up-to-date talent, such as a cloud and distributed computing Devops?
Thankfully, Thincrs has thought about this, and thought about it smartly. Its platform partners with big tech companies that require specific talent and skills in order to create tailor-made e-learning courses and quizzes. Companies can then recruit candidates based on the challenges they’ve completed so far, and prove they are up to the task.
I’ve said before and I’ll say it again: I’m not much into fintech anymore. It’s like when you listen to your favorite song too many times; the pleasure just fades away over time. But not with Oyster. Honestly, it is one of the few fintech products I’m super eager to try.
Oyster is a startup in Mexico that provides a smart wallet and debit card for freelancers, SMEs, and startup founders. Keep track of your finances without the usual hassle and know where your money is at all times. The company was created in 2018, but has just launched its product in 2019.
Mexican startup, Homie, is a user-friendly platform that facilitates a property leasing process. Its matching algorithm helps landlords upload their properties and find a matching tenant easily and quickly.
Not only does it manage the entire relationship by stepping in and managing the due diligence and paperwork, but it also ensures the payment reaches the landlord’s pocket despite the tenant’s forgetfulness (obviously the app has a credit or insurance feature, here). Did I mention all contract leases will now be singable online through encrypted tokens, aka blockchain?
This startup is indeed your homie.
Despite the inexcusable behavior on behalf of Homie’s former CEO, Jordi Greenham, we consider that this startup has a product with a lot to offer the real estate market in Mexico. You can read more about our view on the matter here.
Freight forwarding is boring. Normally, it is just a bunch of people calling each other to manually make things happen. And honestly, quite imprecisely. Nowports is an AI-powered freight forwarding platform.
Its algorithm is able to identify the best navigation routes, schedule shipping times and basically coordinate the whole shebang with an exponentially lower rate of error.
With the rise of e-commerce, the rate of online crime has increased with it. Mexican startup, Bayonet, aims to help those honest digital internet merchants make their life easier. Through Bayonet, e-commerce websites can identify fraudsters in no more than a minute, even before the transaction is completed.
Big data and AI technology are used in order to identify red flags in user activity quickly. This saves vendors a lot of buttpain right from the start.
Last December, Bayonet raised half a million dollars from a variety of funds, led by Soldiers Field Angels and Avalancha Ventures.
So, here they were, 11 amazing startups in Mexico!
Disclaimer: No specific quantifiable criteria were used to select the companies. It was a subjective combination of product, market and applied technology. Feel free to leave your lovely opinion in the comment section below!
- Related articles: Tech and startups in Mexico!