By Rebecca Lipon (Application & Judges Coordinator, PITCH Competition 2012) Last week I trekked up to the Microsoft’s San Francisco campus to see Mexican.VC's Demo Day. Mexico is not known for spawning Internet companies, but with our sister site, Ellas 2.0, we wanted to know what is happening in Mexico.
Mexican.VC styles itself as Silicon Valley’s first “discovery fund” for Mexico, providing an initial $20k capital boost to entrepreneurs. Why is this necessary? Early seed capital is often provided by a US entrepreneur’s credit card, but with limited access to personal credit in developing markets, a third party is needed to provide “discovery capital”. That is the role Mexican.VC is assuming and in light of last week’s demonstration, it seems to be having an excellent effect.
The seven companies tackling industries ranging from telecom to gaming taught me that there is a lot more happening in Mexico than reported by the nightly news. Below are some of misconceptions about Mexico and what I learned:
Misconception #1 - Mexico’s economy screeched to a halt because of issues with the drug cartels.
While it’s true that Mexico is struggling with serious crime related to drug cartels, I learned in my discussions with Mario Valle, Director of Business Development at Electronic Arts, who is focused on developing emerging markets (and mentoring in the Mexican.VC incubator) that the underlying economy of Mexico is booming.
Household wealth has tripled over the last decade and Mexico has the largest middle class in Latin America together with Brazil. Latin America as a whole is the second largest region in the world with online population year-over-year growth at 16% and it has the fastest growing online market in terms of Internet penetration at 23% year-over-year, according to Comsore. When I asked about the infrastructure in Mexico in specific, he told me that 85% of the population has mobile phones, approximately 10% have smartphones, and 32% have Internet access.
Brazil and Mexico are the main Facebook markets in Latin America by number of users (with 42 and 34 millions respectively). So, my takeaways are - 1. Look at investments in Latin American, Brazil and Mexico specifically; 2. The Internet is heavily utilized in Mexico; and 3. Drug cartels aren’t stopping Mexicans from getting online or needing online services.
Misconception #2 - Mexico has no entrepreneurs.
According to Mexican.VC General Partner, David Weekly:
“Mexico is an interesting and underinvested market, with a rare combination of engineering talent (Tec de Monterrey, considered 'The MIT of Mexico', graduates well over 10,000 engineers a year), design talent, and market opportunity – with over 110m inhabitants, the largest Spanish-speaking country in the world.”
Speaking with entrepreneurs at the event, I also learned that Mexico City is the largest Spanish-speaking city in the world, which is the reason why they feel it is an ideal place to launch social apps in Spanish. Suffice it to say, entrepreneurs are excited to apply themselves to the Mexican market.
Misconception #3 - Mexican women stay at home.
Given the 2011 World Economic Forum’s Global Gender Gap Report that ranked Mexico 89th out of 135 countries for gender parity, it is easy to believe that Mexican women are not starting businesses, but you wouldn’t know that from the companies pitching at Demo Day. Three incredible female entrepreneurs took the stage:
- Celeste North (Founder, NuFlick) is a user/founder who after getting her degree in communications from the CEUC Film School and building her own production company realized that the world needed a platform for independent cinematographers to distribute to the community at large—something beyond YouTube where they could actually extract value for their work. Her ambitious video-on-demand startup already has strategic partnerships in place with key film festivals and a growing user base. It was exciting to see this ambitious project already getting so much traction.
- Cristina Randall (Founder, Conekta) is a software systems engineer bent on bringing Mexico City residents together through Coneckta’s social take on an online business directory service. Cristina is a true techie having done everything from IT to clean tech, but who takes a systems approach to any problem, so it should be no surprise that her start up is focused on the deeply social element of Mexican culture to connect with its user base and help business acquire new customers.
- Aleksa Delsol (Designer, YogoMe) is an artist adding flair to the incredible YogoMe game suite. If you haven’t checked this startup out yet, you should—they created the tenth most downloaded educational game in the US app store (and firstin Thailand) just last week. They are continuing to design and develop more games with their 6-person team.
When I asked Mexican.VC General Partner David Weekly about degree of representation he said,
“We didn’t look for female founders; we focused on products and markets and teams who could solve those problems. We all have personal biases, but we focused on the quality of the prototype and its viability for investment. We believe this process is better than those investors who are making ‘gut calls’ based wholly on their biases. I believe in meritocracies because then the people who are there know they are there because they are great, and not because they are women. If you are selected for Mexican.VC, you are selected based on your company’s viability; there is no need to second guess that.”
I was heartened to see companies coming out of Mexico with bright, agile entrepreneurs and some kick-butt founders who also happen to be women doing design, development, and operations work and bucking stereotypes. I look forward to seeing more out of these women and out of Mexican.VC.
Editor's note: Got a question for our guest blogger? Leave a message in the comments below. Photo credit: Rich Peniche on Pikhub. About the guest blogger: Rebecca Lipon is a product marketing manager at Synopsys, where she works to make sure the technology for verifying computer chips is state-of-the-art. A passionate advocate for women in technology, Rebecca mentors several San Francisco Bay Area non-profits and sits on the board of Spark SF, an organization promoting equality for women throughout the world. Rebecca is also the lead singer of the funk and soul band Sinister Dexter. She holds a B.S. in Computer Science and Electrical Engineering from MIT. Follow her on Twitter at @rebeccalipon.