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Monterrey is located in the northern region of Mexico near the Texas Border (a two-hour drive) and it’s one of the most industrialized cities in the country. It is home to several of the best universities in Mexico and Latin América that every year graduates a lot of students in engineering, design, and business. Also several of the best companies and business groups in Mexico have their headquarters in Monterrey (Femsa, Frisa, Xignux, Alfa, Cemex, Arca Continental, Vitro, Gruma, Banorte, Proeza, Cuprum, CYDSA, Protexa, and more). In StartupBlink’s 2019 report, Monterrey ranked 2nd in Mexico and 81st globally.
Entrepreneurs have emerged in this city in the industries of steel, glass, cement, and beer, who fostered the technological development of these and other industries around them. With a culture that is very work-oriented, a lot of money is leading to new investments like real estate and entrepreneurship.
The new wave of entrepreneurship started with two of the most important VC funds in Mexico (IGNIA and Alta Ventures), resulting in a startup ecosystem that is constantly growing, incorporating more players like: funds, angel investors, incubators/accelerators, coworking spaces, and startups.
Successful startups in Monterrey
Here are some notable mentions:
DeCompras.com the first e-commerce company in Mexico, sold to Terra and PlazaVIP.com, acquired by Grupo Carso, are some of the ventures Juan Carlos García (@jcgs68) co-founded a few years ago. Being a serial E-Commerce entrepreneur, Juan Carlos also co-founded Banco Amigo, now ABC Capital, had the opportunity to work as VP in Wallmart, and now as Amazon Mexico CEO and co-founder of Pagamobil.com (@PagaMobil) the first mobile app in Mexico for the online payment of utility bills.
Naranya (@NaranyaGroup) was founded by Arturo Galvan (@agalvanc) (Former Infosel co-founder, one of the first technology companies in Mexico and former CTO at Grupo Reforma, the largest news company of Mexico). The company started in 2002 with televoting services and migrated to mobile subscription services, launching a mobile app store for Latin America in the last years. Naranyas’ reaches more than 600 million only with the App Store.
EnvíaFlores.com (@enviaflores) was founded by Jesús Martinez (@larralde21) in May 2001 but in the last 3 years, they grew to become the most recognized flower delivery company in Mexico. Jesús shows us that sometimes you have to keep pushing towards developing your project to make it happen. A lot of entrepreneurs quit early when things don’t go as planned.
SeMeAntoja, now acquired by Hellofood, was founded by Tavo Zambrano (@tavowzg) with the purpose of ordering food online. Tavo is recognized for being brilliant at retaining users and closing sales. In early stages he realized that people visited his site only to see the phone number and menu of the restaurants, so he changed the numbers to call his company directly.
Strengths for startups in Monterrey
Monterrey it’s very close to Texas, not only geographically but also in cultural aspects. There are strong business relationships with Austin and San Antonio, also a lot of people living in Monterrey are used to travel to McAllen or Laredo. The closeness to the US, brings another mindset for Monterrey companies, they usually visualize their businesses in big scale, expanding to the Mexican and American market.
As I mentioned at the beginning of the post, every year Monterrey graduates a lot of students in engineering, design, and business, including different parts of Mexico and Latin America. This new graduates now see entrepreneurship as an opportunity for their professional careers and are stepping up the level of working professionals. We’ve seen an incrementing number of startups founded by students and also new graduates, entrepreneurship is becoming part of the DNA of many citizens of Monterrey.
Monterrey’s businessmen are committed to developing the city. Directors from different companies are board members of universities and other entrepreneurship organizations. They invest time and money on providing better opportunities for entrepreneurs. As an example we can take INCmty, the biggest entrepreneurship festival in Latin America (@INCmty), were most of the funding for the event comes from these companies. There’s a special pride in living and working in Monterrey, and you can see businessmen wanting to give back to the community.
Weaknesses for startups in Monterrey
The first of all weaknesses is lack of information, a lot of new entrepreneurs don’t know about the different institutions that can help them succeed and also some of them don’t know the new ways to start a business. As a city we are focusing on solving this problem through MEET, Monterrey Entrepreneurial Ecosystem Together, (@MEETMTY) were we are trying to centralize all the information regarding entrepreneurship in Monterrey. MEET is different to the other entrepreneurship events and movements because it acts as a platform where entrepreneurs can meet all the different players of Monterrey’s entrepreneurship ecosystem. Last year more than 30 players showcased and more than 900 persons attended the event.
Second is the lack of mutual efforts within the players of the ecosystem. Every month there are new events, that on many occasions are on the same day of the week. Also, many of these same-day events focus on the same target market. MEET is also working to solve this problem, a more informed ecosystem leads to better outcomes.
The third aspect is that venture funds in Monterrey are targeting later stage startups, making a gap between early-stage startups and seed funding. Monterrey doesn’t have public angel investors and many of them are hard to reach. This problem has been detected by new funds, but they don’t have the expertise of investment like the established ones. This brings an opportunity for foreign funds to reach and invest in Monterrey’s startups.
Biggest magazines and blogs relevant to the startup ecosystem
- Forbes Mexico (@Forbes_Mexico)
- CNN Expansion (@ExpansionMx)
- Entrepreneur Mexico (@SoyEntrepreneur)
- Serebriski (@serebrisky)
- Santiago Zavala Vlog (@dfect)
Major players in Monterrey startup ecosystem
In 2015 there were more than 80 players in the ecosystem, here are some of the most recognized:
Incubators / Accelerators:
- Endeavor (@EndeavorMexico), is a worldwide NGO that helps entrepreneurs scale their businesses. They are particularly recognized for having one of the best fellow programs in Mexico.
- Startup Studio Monterrey, Digital Startups Accelerator (@startupstudiomx), is the only accelerator in Monterrey that is equity-based.
- Tecnológico de Monterrey Incubator (@incubadora_mty) and UR Incubator (@ineur), are two of the most recognized university incubators in Monterrey.
- Coworking Monterrey (@coworkingMty), is one of the first coworking spaces in Monterrey, they are one of the best options in the downtown area.
- Eka Cowork and Business (@EKA_Cowork), has been a player in the ecosystem for two years, they have been recognized for having staff that really helps entrepreneurs.
- INADEM, National Institute of Entrepreneurship (@INADEM_SE), gives Mexican entrepreneurs funding opportunities to start their businesses.
- Alta Ventures (@altaventures) is the most recognized VC fund in Monterrey that now is changing his name to Dalus Capital (@DalusCap). Their investments thesis is around innovation, covering a lot of sectors: education, health, fintech, software, and IoT.
- Ignia (@IGNIA_Fund) is a VC fund that supports enterprises serving the base of the socio-economic pyramid in Mexico.
- NXTP Labs (@NXTPLabs) is an Argentinian fund that just opened his offices in Monterrey, right now they are focusing on fintech startups, but they have a diverse portfolio.
- Noches de Pitcheo, a pitching community
- BiCo, Business Innovation Community
About the author:
Juan Manuel Núñez Nieto (@juanmanuelnunez) is Program Manager at Startup Studio Monterrey, a digital startup accelerator, he has more than three years of experience working with entrepreneurs. Juan Manuel is an exponent of the Lean Startup methodology and Business Model Canvas in different parts of Mexico.