Founders Network is proud to launch our tenth chapter: Mexico City.
In Mexico City’s blossoming startup scene, founders are eager for new opportunities to connect, solve problems and learn from others with the experience of building a successful tech startup.
Anyone who has visited Mexico City knows that the city is bursting with creativity, culture and talent. And it’s a burgeoning hub for tech startups, too.
Starting this week, founders in Mexico City have a new way to connect, build relationships, and benefit from the shared experience and network of peer mentors with the launch of Founders Network.
Chapter #10 Launched: fnMexico City
Founders Network celebrated the launch of its newest chapter this week with a virtual launch event featuring some of the key talent that will be building out chapter programming. It also featured a keynote by Will Bunker, serial entrepreneur, former president at Match.com and current partner at GrowthX Capital.
“Mexico City is the main tech ecosystem in Latin America, with many founders planning to scale to Bogota, São Paulo and Santiago,” says Max Linares, president at Futurecasting and Founders Network Growth Chair. “Founders I spoke with are excited about the benefits of Founders Network’s structured mentoring programs. These programs unlock value in informal relationships with others in the ecosystem, as well as a bridge to Silicon Valley and other global tech hubs.”
Although Mexico City is largely overlooked as a tech market, that is gradually changing. Mexico City-based founders are quick to point out that some of the particular nuances and challenges in Mexico City, and in the country at large, have made a huge difference.
The business climate and networking in Mexico City has helped spark a braintrust of innovators.
More Sectors Growing
“The big one for the past two years, without fail, is Fintech,” said Julián Balderas, general manager of Ironhack México and Founders Network Ecosystem Advisor. “There are a mix of Mexico-native companies and companies from Spain, Argentina, and some from Colombia centered around fintech. Interest rates float around 18% in Mexico. This creates a rubberband effect where a lot of tech startups are coming to market because banks aren’t addressing people’s needs.”
Balderas and others describe an ecosystem of financial services that doesn’t always align with the needs of Mexicans who earn money, but have relatively few good options for loans and credit. Payments are another important niche in the Mexico City tech startup world, with some of the innovation spurred on by Mexico’s “Fintech Law” this year. The law provided a framework for electronic payments, crowdfunding, blockchain and other Fintech-related services.
Other areas, such as logistics and social impact startups, aren’t too far behind Fintech, added Balderas.
Its promise as a market is reflected in increasing investments in Mexico City.
Firms like Softbank, Alta Ventures, and well-known Silicon Valley accelerators are growing their presences in Mexico or Latin America.
But there are also unique challenges to tech startup life in Mexico City.
One is simply its size. The 573 sq mi city, which also has a population of over 9 million, is larger than New York City and traveling around town is time-consuming. That means there’s a need for “quality events, gaining insights from U.S. or other markets, and more collaboration,” said Eric Cardeña, Director of Community at MassChallenge México and Founders Network Chapter Director.
The Burgeoning Tech Ecosystem Needs Mentors
Another issue is lack of networking and mentoring. The burgeoning tech startup ecosystem means there are fewer founders who have had successful exits and pass on the wisdom to the next generation of entrepreneurs, adds Rafael Jiménez, founder of Seenapse and Founders Network Membership Chair.
“There’s an overall lack of mentoring programs in that regard,” Jiménez said. “So one of the values Founders Network brings is precisely the ability of reaching out beyond your immediate surroundings and having the opportunity to discuss the startup journey with peer mentors in other parts of the world, or even here in Mexico.”
Startup founders who successfully sell their company, or pursue some other exit, often wind up transitioning over to the venture capital side and/or act as a mentor for younger startups.
Founders Network brings mentoring and expertise from more mature tech startup markets like Silicon Valley.
Founders Network has expanded into 10 cities including its home base of San Francisco. With the mantra of Founders Helping Founders®, FN naturally brings that generational experience that founders often take for granted in more developed markets.
It also helps to bring Mexico City’s startup ecosystem together for cross-mentoring that those who understand the market are especially suited for — while also nurturing relationships with other tech hubs.
The VC Route Isn’t The Only Path
“The experience from founders from other regions is helpful in two ways: one is how to prepare, polish your pitch deck and what VCs are more compatible with what you’re working on,” says Jiménez. “Also, we can now talk about other options besides the VC route, because it’s not necessarily good for everybody. That knowledge and expertise is valuable in itself, because many people think that there’s only one way to go about it.”
Mexico City founders are ready for the challenge, adds Balderas.
“It’s the opposite of a bubble here; you really have to prove yourself in order to raise capital,” he says. “Most tech startups in Mexico are revenue-driven: you really have to prove your numbers, and you have to have sales driving your investment pitch. It’s a chicken-and-egg problem, and we need to start supporting the base of the pyramid in order to promote more startups.”