Ep. 76: Everyone is Bootstrapping in Mexico...
Welcome to Scenius Mexico: Your weekly newsletter on technology, innovation, and startups in Mexico.
Everyone is Bootstrapping in Mexico… Just kidding, but the funding market has been very slow in the last 2 months. The good news is, startups are building. There’s every time more activity, and the ones that made it thus far are ready to take on 2024. And with 500 Global closing its LatAm Seed IV funds, we might see fresh capital being deployed soon.
In this edition, I added an Economy section at the end. As startups don’t operate in the void, having a sense of where the Mexican economy is going might be valuable. Let me know what you think.
Let’s dive in!
Startups News
Mexican Fintech R2 strengthen its partnership with Chilean TUU
The partnership with the Chilean payment processing startup aims to continue offering loans to SMEs in Latin America, aiming to double its placements to $16 billion in financing by 2024. R2, operating in Mexico, Colombia, and Chile since 2020, focuses on providing financing solutions to SMEs integrated with other platforms, serving clients like Rappi and Justo. Inspired by the models of Paypal and Square, this alliance aims to deliver more than 2,600 loans to SMEs, following their 2023 success in issuing over 1,200 loans.
Finsus 'Sin Fronteras' debit card is focusing on Mexico's smallest municipalities
Finsus, in collaboration with Mastercard and Evertec, has introduced the 'Sin Fronteras' debit card in Mexico, aimed at promoting financial inclusion, particularly in smaller municipalities with fewer than 15,000 inhabitants. The card provides features like unlimited telemedicine health insurance, life insurance, cashback, and commission-free payments for basic services via the FinShop app. It also includes a savings account with a 6.09% annual yield and investment opportunities starting at 100 pesos with returns up to 15.01% annually. Mastercard's involvement ensures cardholders access to Strive Mexico's benefits, including mentorship for women microentrepreneurs, while Evertec supports the initiative with technical and payment solutions.
VC - Accelerators News
500 Global launches its 4th fund
500 Global newest investment fund will be 500 LatAm Seed IV. A fund dedicated to boosting technological startups and contributing to the economic growth of Latin America. This fund is a notable evolution from their previous ones, offering three times more investment per startup along with more personalized support for founders. It targets early-stage startups, focusing on innovative projects addressing significant challenges in underserved markets with strong value propositions. With over 10 years of experience in the region and over 300 investments since 2013, 500 Global has become a strategic investor for Latin American startups seeking capital and guidance.
Cemex Ventures to slow down in 2024
Cemex Ventures, the venture capital arm of Cemex focused on technology startups in the construction sector, anticipates a cautious investment approach in 2024 due to complex economic and geopolitical landscapes in the first half of the year. Gonzalo Galindo, head of Cemex Venture, attributes this caution to geopolitical tensions, including the conflicts in Gaza and Ukraine, the reduced demand for construction in Germany and the UK, and the upcoming U.S. elections. Despite investing heavily in 2023 in diverse initiatives, including solar-powered plants and plastic usage in products, Cemex Venture expects a stable start in technology investments in 2024, followed by a potential slight decrease in valuations.
Rest of the World
Chilean DataScope to open office in Mexico
The startup is specializing in software that simplifies business data collection via mobile devices. It has opened an office in Mexico as part of its expansion strategy in Latin America. This move is set to triple DataScope's operational capacity in Mexico and serves as a foundation for future growth into other Latin American markets. Operating in 17 countries and catering to more than 400 clients, DataScope was established in 2016 by Nicolás Serrano and Antonio Grass.
Salvadoran startup Spot is coming to Mexico
Spot, a Salvadoran startup based in Chile, has secured a US$ 2 million Seed funding round to develop a new version of their software and establish a presence in Mexico. The company is using AI for analyzing consumer behavior and theft in supermarkets. In Mexico, Spot plans to expand its client base, targeting at least 10 new strategic clients, including large retailers. The company already has a strong portfolio in Central America and Chile, where it works with clients like Walmart Chile and Mercado Libre. The move to Mexico represents a significant step in Spot's growth and expansion in the region.
Mexico Economy
Mexico's SAT reported a record tax collection in 2023
In 2023, Mexico's Tax Administration Service (SAT) reported a record tax collection of MX$4.52 trillion (US$264 billion), marking a 12.3% increase from 2022 and the highest rise during the current administration. However, the 2023 collection fell short of the government's projected MX$4.94 trillion. Despite President López Obrador's “austerity” measures, including proposals to dissolve various autonomous organizations and increased funding for state companies like PEMEX and CFE, the government has been able to increase spending on infrastructure and social programs, funded by tax compliance. Last year's Federal Economic Package for 2024 raised concerns about a significant fiscal deficit, aiming to strengthen the foundation of the administration's transformation project initiated in 2018.
Mexico is offering EUR 2 billion in Eurobonds
The Mexican government is making its second bond market entry this year by selling sustainable euro-denominated bonds. Mexico is offering 2 billion euros (about US$2.2 billion) in sustainable sovereign notes with an eight-year maturity date. This move reflects a shift from López Obrador's usual fiscal austerity, as he increases spending in his final year in office. The issuance aims to fund aid programs and complete major projects before the June elections. This issuance comes as other emerging market countries, including Chile, also return to the markets post-holiday season, testing investor appetite.
See you for the next edition. Have a question or any feedback? Just hit reply. I'd love to chat!
Arnaud