Venture Capital - Mexico

Mexico

Highlights

Mexico is projected to have a Total Capital Raised in the Venture Capital market market of US$2.25bn in 2024.
Later Stage is set to dominate the market in Mexico with a projected market volume of US$1.64bn in 2024.
When viewed in a global context, the United States is expected to lead in Capital Raised, with US$136.6bn in 2024.
Mexico's Venture Capital market is gaining momentum, attracting global investors seeking high-growth opportunities in the country's dynamic startup ecosystem.

Key regions:

Market definitionIn-Scope/Out-of-scopeMarket structureReportsMethodology

The Venture Capital market in Mexico has been experiencing significant growth in recent years, driven by customer preferences, trends in the market, local special circumstances, and underlying macroeconomic factors.

Customer preferences: Mexican entrepreneurs are increasingly seeking venture capital funding to support their innovative ideas and start-ups. This preference is driven by a desire to access the necessary resources and expertise to scale their businesses quickly. Additionally, entrepreneurs recognize the value that venture capital investors bring in terms of mentorship, strategic guidance, and access to networks.

Trends in the market: One key trend in the Mexican Venture Capital market is the increasing focus on technology and innovation. Start-ups in sectors such as fintech, e-commerce, and healthtech are attracting significant investment as investors recognize the potential for high returns in these areas. This trend is fueled by the growing digitalization of the Mexican economy and the increasing adoption of technology by consumers and businesses. Another trend in the market is the rise of corporate venture capital. Established companies are increasingly setting up their own venture capital arms to invest in start-ups that can provide strategic value to their core businesses. This trend is driven by the need for established companies to stay competitive and innovative in a rapidly changing business landscape.

Local special circumstances: Mexico's proximity to the United States, one of the world's largest venture capital markets, provides unique opportunities for Mexican start-ups. Many venture capital firms from the United States are actively investing in Mexican companies, attracted by the country's large consumer market, young population, and growing middle class. This cross-border investment is further facilitated by the North American Free Trade Agreement (NAFTA) and the subsequent United States-Mexico-Canada Agreement (USMCA), which provide a favorable business environment for investors.

Underlying macroeconomic factors: Mexico's stable economic growth and favorable business environment have contributed to the development of the Venture Capital market. The country has a young and dynamic population, which fuels innovation and entrepreneurial activity. Additionally, the Mexican government has implemented various initiatives to support entrepreneurship and attract foreign investment, including the creation of innovation hubs, tax incentives, and the establishment of specialized venture capital funds. In conclusion, the Venture Capital market in Mexico is experiencing significant growth due to customer preferences for venture capital funding, trends in the market focused on technology and innovation, local special circumstances such as cross-border investment opportunities, and underlying macroeconomic factors including stable economic growth and government support for entrepreneurship. These factors combined have created a conducive environment for the development and expansion of the Venture Capital market in Mexico.

Data coverage:

Data encompasses B2B and B2C enterprises. Figures are based on the amount of capital raised, the average of deal size and the number of deals.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use data from OECD, annual financial reports of key players, industry reports, third-party reports, publicly available databases, and survey results from primary research (e.g., the Statista Global Consumer Survey). In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, CPI, number of small and medium-sized enterprises (SME), new businesses registered (number) . This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the S-curve function and exponential trend smoothing are well suited for forecasting digital products and services due to the non-linear growth of technology adoption.

Additional notes:

The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.