VC Market in Mexico

VC Market in Mexico

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As a venture capital firm, Effi Enterprises helps emerging businesses develop a business plan that will take them from an early-state startup up to a thriving public company in under ten years.  They invest large sums of money in exchange for equity in the company, providing that business the opportunity to experience extreme growth.  As a competitive emerging economy with great potential in its VC industry, Mexico has the growth venture capital firms look for to invest.  As an entrepreneur himself, Efraim Landa, the founder of Effi Enterprises, recognizes the strength of the innovative Mexican entrepreneurs that just require funding from venture capital firms to propel their business into exponential growth.

History of VC Market in Mexico

The venture capital industry in Mexico is very new and has tremendous potential for growth.  Although venture capital activity is only around 10 years old, in its short life, the VC market has seen extreme growth and is exhibiting signs of a positive, fast-growing future.  In 2002, the United States signed the Partnership for Prosperity Agreement with Mexico to promote the development of the venture capital industry in Mexico.  The Mexico-U.S. Task Force on Venture Capital was established to implement this development and formulate an action plan for necessary reforms to propel the industry into growth.

Current State of VC Market in Mexico

Mexico currently has a stable, emerging economy that is placed 14th in the world.  Among the four countries that have fully recovered from the financial crisis in 2008, Mexico is the fastest growing.   As the Mexican venture capital industry is at an early stage of its development, many actors are getting involved to ensure it succeeds.  The Mexican government institutions, such as their development bank, the Ministry of Economy and Nacional Financiera, have begun encouraging financing of entrepreneurship and the development of startups through venture capital.  They have established a Fund of Funds, which is a development fund that promotes private equity and the venture capital industry in Mexico.  Recently, the Ministry of Economy launched a $22 million seed capital fund to provide the needed funding for startups all across Mexico.  They have also instituted reforms in the Mexican Stock Exchange.  As a result of these government changes, Mexico’s venture capital market has grown from 2 funds in 2008 to 14 funds in 2012.  According to the Latin America Venture Capital Association, Mexican startups received $469 million dollars in funding from VC firms and are predicted to raise $1 billion in 2012.  As an up-and-coming market for venture capital, Mexico still has challenges to overcome before it can reach its full potential.  Education about venture capital funding is needed amongst Mexican entrepreneurs and a base of local investors needs to be built to sustain the VC industry, but many venture capital conferences throughout Mexico are informing and encouraging those with fresh business ideas.  The VC market is on the rise and its improvement is predicted to continue.

Future of VC Market in Mexico

sssssssssssss     Mexico’s arrival into the venture capital industry has been slightly delayed behind other regions of the world, but its strong economy and entrepreneurs provide evidence that progress is in the future and international venture capital firms need to get involved in this opportunity by sharing their managerial and operational expertise and providing the funding that the early-stage venture capital industry there needs to exhibit the growth it is capable of.  Many investors have been hesitant because the risks are great, but as the market is not yet operating at its full potential, there is extreme profit and growth to be seen.  Mexico is a prime destination for venture capital firms to invest as it has innovative business entrepreneurs and extreme potential to grow in coming years.


About Efraim Landa

My name is Efraim Landa I am an entrepreneur and an expert in venture capital. I am the co founder of Effi Enterprises, a venture capital firm as well as the co founder and CEO of Gluco Vista, a company that is in the process of developing a non invasive glucose meter for those with diabetes.

Posted on April 29, 2013, in Business Financing, Effi Enterprise, History of Venture Capital, VC investments, Venture Capital, Venture Capital Markets and tagged , , , . Bookmark the permalink. Leave a comment.

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