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TechCrunch published a piece entitled “Why Amazon and Entrepreneurs Are Bullish on Mexico“, spotlighting Mexico’s entrepreneurs and an investor trek hosted by the Endeavor Investor Network in June. The article took a look at the country’s tech ecosystem and examined the rise in both challenges and opportunities for growth. The trek was organized by Endeavor, Silicon Valley Bank and LAVCA, and brought two dozen U.S. and Latin American investors to meet with local entrepreneurs and policymakers.
The piece views the Mexican sector as “energized and developing”, but also admits significant obstacles to growth, including a lack of Internet access and credit card usage. The stable Mexican economy is fueling growth and tech companies are growing in response to the needs of a nascent middle class and youthful population. LAVCA reported that in 2014, fund managers invested US$1.31 billion in Mexican deals – preceded only by Brazil – representing a 63% increase in the number of deals.
Signs of growth in Mexico are widespread. Amazon.com recently began selling physical goods in the country, calling it the biggest international launch ever. Further, several startups, including Endeavor’s own Kueski, founded by Adalberto Flores and Leonardo De la Cerda, discussed how they were extending financial services to the under banked population.
Kueski has become Mexico’s first online-only consumer lending platform specializing in micro-loans. The company claims tens of thousands of loans through its platform, with the understanding that the lack of formalized banking presents a huge opportunity for progress in Mexico and Latin America. Kueski has raised millions in funding from investors.
Mexican seed and early-stage VC markets are also receiving boosts from new seed funds. While this growth marks an exciting inflection point, there are still key challenged facing local entrepreneurs. Local managers rarely co-invest, which can block access to capital at times, and Mexican angel investors cannot deduct investment losses against gains. Perhaps one of the biggest obstacles relates to the long-term resiliency of funds and the large amount of capital held by a few investors and families.
Read the full TechCrunch piece by clicking here and learn more about the Investor Network here.
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