There is some serious momentum when it comes to startups in Mexico in 2021.
The pandemic brought the population face-to-face with numerous challenges and changes in business. Above all, a staggering 90% of Mexicans want to start their own business according to the Amway Global Entrepreneurship Report 2020.
Mexicans act on that interest! As an illustration, fintech in Mexico leads the way in 2021 as the largest source of fintech startups in Latin America.
Fintech fuels economic activity in the country, boosting consumer access through innovative methods. One Mexican startup example, Kavak, fused fintech strategies into their business model to keep up with industry trends.
Kavak hit a remarkable business milestone late in 2020. Kavak became the first unicorn in Mexico!
Wait, what? What’s a Unicorn?
In the financial world, a unicorn is a private company with a value over $1 billion. Kavak is labeled as a soonicorn too, which represents a unicorn that is specifically a startup.
Needless to say, Mexico startups have our attention. Keep reading for more in-depth insight about the impact of startups in Mexico!
Strengths of Mexican Startup Culture
Let’s check out some quick figures on entrepreneurship in Mexico:
- There are almost 200 fintech and software/data startups in Mexico.
- 83% of Mexicans consider themselves equipped to start a business.
- The capital, Mexico City, features the most startups in all of Mexico.
The pandemic sparked rapid growth in the startup game, and e-commerce continues to reap the benefits.
Mexicans see e-commerce as essential for entrepreneurial ventures. 64% surveyed believe that you can best maximize your sales and audience through the use of social media. Top social media networks in Mexico include Instagram, Facebook and WhatsApp.
Additionally, determination is another strength defining Mexican business.
The drive is there, without a doubt. For instance, entrepreneurs are, by and large, willing to call upon the networks of their family and friends in order to get their business started.
The difficulty is that those financial investments come with challenging expectations and oftentimes, lower limits.
Pain Points for Players in Mexico Startups
Obtaining capital is a big challenge for many new businesses in Mexico. This is because financial support is simply lacking on a wide scale from external sources such as government initiatives.
Individuals must instead rely heavily on their own resources. In fact, 89% begin their venture using personal or family funds!
All things considered, business in Mexico isn’t necessarily designed for entrepreneurs either. For example, the country lacks institutions that can provide ample support and structure to new businesses.
Statistics unfortunately show that in the past, 75% of Mexican startups fail within the first 2 years of existence.
Almost three-quarters of Mexicans under 35 are interested in self-employment. However, the average age of entrepreneurs in the U.S. and U.K. is 38 and 40, respectively. On the other hand, the average age in Mexico is 26 years old.
While there are many valuable assets that younger innovators bring to the table, statistically speaking, older entrepreneurs tend to see more success.
Experienced entrepreneurs often have:
- Made mistakes already (and learned from them!)
- A larger professional network
- Acquired more personal capital and a safety net
These issues cause uncertainty about the sustainability of the current Mexican startup cultures. What do these obstacles mean for the future role of startups in the Mexican economy?
Future Projection for Mexico Startups
Fiscal incentives from the government and venture capital backing are a must for the startup scene in Mexico to continue growing. A global mindset will help prompt fast-moving action to keep up with the trends.
As a result of the recent boom, the framework is now in place to expand startup support and structure in Mexico. Furthermore, signs show that other startups are taking the lead at providing tools and knowledge to those that are eager to learn.
Likewise, they are giving back by hosting virtual workshops, creating entrepreneurial networking groups, and launching financial health acceleration programs.
A shift is in the air in Mexico.
Last, as long as growing startups jump at the opportunity to implement tested business strategy in the right industries, they should continue to bolster the Mexican economy.
To summarize, there are 4 reasons to believe Mexican startup culture will soar:
- Opportunity is abound due to the pandemic
- Untapped potential in fintech and e-commerce
- Proximity to both North American and South American markets
- Overall 70% internet penetration rate
Ready to Enter the Mexican Market?
In conclusion, Mexico is an exciting country to watch for startups in 2021. Want to find the best method to break into the Mexican market and keep up with the competition?
Contact us at email@example.com today!