“This highly concentrated market is becoming home to a new wave of entrepreneurs looking for opportunities outside the costly, competitive confines of Silicon Valley.”
Mexico City is the political, cultural and economic heart of Mexico, as well as the heart of the country’s startup scene. Mexico City was the place of birth of the first Mexican unicorn, Kavak, which is now the second most valuable company in Latin America, worth $8.7 billion.
Many international and local investment firms have their headquarters in Mexico City, increasing the availability of capital. VC firms based in the city include Avalancha Ventures, Wollef, and Investo. Several other institutions based in Mexico City also fund tech innovation, including INADEM (The National Institute of the Entrepreneur) and NAFIN, one of Mexico's leading development banks.
The largest entrepreneurship organizations in Mexico, including 500 Startups Latam and Startup Weekend Mexico, have offices in the city. In 2022, global tech company Sryas announced the opening of a new delivery center here, and in March 2023, security company Genetec announced the opening of an experience center that will be its hub for Latin America and the Caribbean.
With its pool of young, educated talent, the city is experiencing a nearshoring boom of U.S. and Canadian companies looking to hire in the Mexican capital. Mexico City is also a hub for digital nomads, offering fast wifi, plenty of coworking spaces, and a large community of remote workers. Prices are significantly lower than any U.S. city, according to 2022 data from Numbeo. According to the UN Department of Economic and Social Affairs, Mexico is the #1 destination for American expats.
Ecosystem by the Numbers
There are approximately 300 Fintech startups in Mexico City, and the Bank of Mexico has plans to introduce a national digital currency. Finnovista helps corporations develop innovation programs that include the Fintech ecosystem and hosts the annual FINNOSUMMIT event. Mobile-first credit card company Stori became Mexico’s second unicorn after a $150 million Series C in July 2022. Digital financial services platform Klar raised a $90 million Series C in June 2022.
Logistics & Transportation
As of February 2023 there were 68 Supply Chain and Logistics startups in Mexico City. The Logistics World Expo & Summit took place in April and Manufacturing Supply Chain Expo 2023 in June. On-demand delivery service 99minutes.com raised an $82 million Series C in March 2022. In April 2022, online grocer Jüsto raised a $152 million Series B.
Agtech & New Food
Mexico’s agriculture sector is large, diversified, and heavily integrated with the U.S., providing ample opportunity for innovation. The Mexico Agtech Canadian Technology Accelerator provides knowledge and connections to help companies enter the Mexican agriculture industry. Food Technology Summit & Expo 2023 is scheduled for September. GreenTech Americas 2023 was held in March.
Reasons to Move Your Startup to Mexico City
Mexico City's location makes it an ideal hub for companies expanding in the Americas. It offers businesses proximity to important ports and highways, a well-developed transportation infrastructure, and easy access to key American cities including Miami, Houston, Dallas, and Chicago. Mexico’s time zones align with the U.S., facilitating real-time collaboration.
Advantageous Trade Deals
Mexico has 13 Free Trade Agreements with 50 countries, including with the EU, Japan, Israel, 10 countries in Latin America, and the 11-country Comprehensive and Progressive Agreement for Trans-Pacific Partnership. It is also a member of the Pacific Alliance. The UK-Mexico Trade Continuity Agreement supports streamlined trade between Mexico and the UK. The U.S.-Mexico-Canada Agreement grants U.S. and Canadian investors favor when setting up operations or acquiring companies in Mexico.
Mexico City is one of the biggest cities in the world, with a young and growing population of approximately 22 million. Over 350 outsourcing companies operate in Mexico, many in the capital city. Mexico was ranked #58 among the Top Digital Nations worldwide in the Global Innovation Index 2022.
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