Mexico’s role in the Latin American startup boom

Latin America has become one of the most dynamic markets for startups and innovation in recent years. Along with Brazil and Colombia, Mexico is the country of choice for new entrepreneurs when it comes to expanding internationally. The study “Soft Landing in Latin America” by the non-profit organization Endeavor identified 271 startups in Latin America, 145 of which expanded to Mexico. In addition, it stood out that Mexico is the main expansion destination in most Latin American countries. The countries of origin of most startups expanding to Mexico are Brazil, Colombia and Peru.

The emergence of Mexico as the startup hub of Latin America can be attributed to its proximity to the U.S. market, knowledge of digital technologies in business, and the size of the Mexican market. Essentially, Mexico’s popularity has developed due to easy access to capital and the quality of investors. International investors from the U.S., in particular, see Latin America and Mexico as opportunities to generate high profits. The intensification of competition in the U.S. market and, consequently, the rising prices of investments, guide investors to diversify their portfolios to other countries. In 2021, more than $20 billion in venture capital was invested in 952 startups in Latin America, four times more than in 2019 and 454 percent more than the previous year.

Among the sectors hosting the most companies, the financial technology sector has stood out for several years. This is followed by e-commerce, transportation and logistics, and artificial intelligence. Particularly due to the impetus of the Corona pandemic, health and biotechnologies are also trending.

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