FinTech and Mexico - could we see a Unicorn arise from Guadalajara?
3 November 2015
I recently moderated a FinTech panel at a conference hosted by AMEXCAP in San Francisco. AMEXCAP currently represents 59 venture capital/private equity firms that actively invest in Mexico. The event showed that Mexico is advancing relative to Brazil with respect to providing favorable conditions for FinTech entrepreneurship (internet penetration above 50M as one of those conditions). In Mexico, FinTech capital mostly flows from established VCs, but this is starting to evolve. The FinTech ecosystem has been evolving and maturing in Latin America for the last three years or so, mainly due to the effort of some participants including Celent, to connect all key players of the ecosystem.We believe is essential to work in an ecosystem, a network of participants, regardless of the geographic location in Latin America. The sustained and increasing development in the region requires the existence of this ecosystem. In the USA where there are geographical pockets of Innovation, such as Silicon Valley, that brings the actors together based on proximity, nothing exactly like this exists in Latin America. However, Guadalajara is emerging as a place that might create more density of entrepreneurship as established tech players are there, such as IBM, and entrepreneurs are increasingly choosing to locate there. For example, a crowdfunding platform called PitchBull decided to locate Mexican operations in Guadalajara. Technology allows business to be conceived locally, nationally, regionally, and internationally, and therefor provide the scale needed for a FinTech player to build from Mexico to beyond. Will Mexico specialize its FinTech around issues specific to Mexico, such as low bank account penetration, a lack of quality credit card data relevant to car issuers, and a mostly cash economy? Perhaps a FinTech unicorn can arise from Mexico based on solving for these unique business conditions.