Four Latin American investors got together at INCmty 2021 to discuss the region’s past, present, and future.
It’s a good time for startups in Mexico. According to representatives of the main investment funds gathered at INCmty 2021, Mexican entrepreneurship has grown and won’t be slowing down in the coming years.
Alejandro Estrada from Catorce ventures, Santiago Zavala from 500 Startups, Diego Serebrisky from Dalus Capital, and Carlos Ramos from Venture Capital LAVCA provided an overview during Tec de Monterrey’s entrepreneurship festival.
The experts noted that the pandemic has accelerated the digital economy. “The technology wasn’t ready for what entrepreneurs wanted to do 10 years ago. Now it’s ready and it isn’t going to stop,” explains Diego Serebrisky from Dalus Capital.
On top of these characteristics, Santiago Zavala pointed out that the growth of the entrepreneurial ecosystem was also due to the “tenacity and talent” of entrepreneurs.
There is more and more talent with larger rounds of investment in technologies, and it’s doubling every year.
“In 2019, the IT sector received investment of 4.9 million dollars. In 2020, it was 4.1 million dollars, but in 2021, during the first two quarters of the year, that amount already stood at 11.5 billion dollars on a regional level. It’s a historic milestone,” said Carlos Ramos.
In fact, during the INCmty festival, Vincent Speranza, Director General of Endeavor Mexico, said that private capital raised (domestic and foreign) for national companies had exceeded 3 billion dollars.
Which means there’s never been so much availability of capital. Entrepreneurs can now launch a national, regional, or international Series A (the first round of Venture capital).
According to LAVCA, Series A and B went from 21 million to 34 million in one year, and Series C from 100 million to 175 million.
The experts recalled that the economy experienced a period of growth in the equity valuations of Internet-related companies from 1997 to 2001, known as the dot-com boom.
But in Mexico, it wasn’t until five years ago, in 2016, when the first Series A and B investments began.
In those early years, Santiago Zavala of 500 Startups decided to have faith in early-stage startups. To date, he has invested in 250 startups.
According to Carlos Ramos de la Vega, Venture Capital Manager at LAVCA, things started to change with the arrival of liquidity events and investor outflows. “These events give exposure and attract investors to the region.”
Latin America currently has 25 unicorn companies, five of which are Mexican.
The entire entrepreneurship ecosystem is growing. “It’s a wave that isn’t going to stop in the coming years,” says Diego Serebrisky, Co-founder & Managing Partner at Dalus Capital.
Investors predict that companies in the region will go public.
“When companies go public, they generate a virtuous circle in which the first investors make a return and are able to put money back into new startups,” explained Diego Serebrisky.
They advised entrepreneurs to begin planning on going public.
“We don’t have a crystal ball, but we can see what has happened in other parts of the world. What’s more, we know that Fintech will have major development in the coming years,” he added.
These changes that Latin America is experiencing are here to stay. “This is the best time to start a business, the best time to become an entrepreneur,” they agreed.