It’s been a great 2021 for Latin American startups, with companies reaching higher valuations faster than ever before. In the first half of 2021, the region saw a total of $6.2 billion, smashing the amount raised during the whole of 2020, which was $4.1 billion. Mexico is one of the region’s most developed economies, and it hasn’t slowed down. The nation raised $1.56 billion in investment capital in the first six months of 2021, while it had raised $831 million in 2020. One might think that it’s all good news, but it’s been quite a challenge to get to this point. Locals even say that if a company succeeds there, it can do so anywhere, which is not necessarily a good reference for the country.
For years, policymakers have been at the forefront of creating the right culture for startups. We can go as far back as the early 2000s where a series of frameworks allowed small companies to attract investors. For a decade and a half, these actions helped Mexico gain ground in the sector, but the nation’s reality has changed. Corruption, and increasing battles with drug trafficking, take away the attention of politicians to the point of attrition in the startup sector.
The country’s crippling violence problem has forced startup founders to turn to anonymity. Any success could attract the attention of kidnappers and criminals. However, they soldier on, and that deserves recognition. In the face of economic challenges, as the country has decreased public funding for startups, entrepreneurs are learning more about alternative ways to find financing, such as taking to cryptocurrencies to finance and create businesses.
Plus, startups take advantage of the good that Mexico has to offer. It’s a country with deep commercial ties with nations worldwide (having trade agreements with 50 countries), so there’s potential to become a hub for production centers and business partners, where startups can fulfill needs that are still unsolved.
So, although the future still seems challenging, Mexico has shown to have a lot on its side. After all, it has already battled through all of this.