Unicorns begin to appear in Mexico

At the beginning of 2020, no Mexican startup had a valuation of more than a billion dollars. A year later, Mexico boasts three national unicorns.

In Latin America, Mexico was an outlier for startups. Several cities in the country represent a hub for the region’s technology industries, such as Monterrey, Querétaro, Guadalajara, and Mexico City itself. The proximity to the United States, added to the Free Trade Agreement, offers the country a competitive advantage. However, until now, no startup has appeared in Mexico that achieved the status of a unicorn.

Although it is not easy for any startup to achieve unicorn status, countries with markets smaller than Mexico, such as Colombia and Argentina, have managed to be the cradle of accelerated growth startups, such as Mercado Libre and Rappi. For this reason, it was disturbing that in an economy as dynamic as Mexico, and with institutional support in projects such as the Digital Creative City, it lacked its own unicorn. However, in the last year, this situation has completely changed and the country begins to see startups with a valuation of more than one billion dollars emerge.

The three unicorns of Mexico

The first Mexican unicorn appeared in early October 2020. It is Kavak, a used car company founded by entrepreneur Carlos García Ottati in 2016. Kavak sought a solution to a problem in the used car market – a lack of trust. consumer — which was attractive to investors from Softbank, Kaszek Ventures, and General Atlantic. After a successful round of investment, the company has started to expand in Latin America.

In less than a year, Mexico announced its second unicorn: Bitso. Bitso is the pioneer cryptocurrency exchange in Mexico, with seven years of operations in the country. In a Series C investment round, the company raised $ 250 million from Tiger Global, Coatu, Valor Capital Group, BOND, and Paradigm. With this, the Mexican exchange achieved a valuation of more than two billion dollars.

The most recent Mexican unicorn is the platform of the brokerage house GBM (Grupo Bursátil Mexicano). GBM has more than 30 years of participating in the financial operations of Mexico as a brokerage house. However, in recent years the company has invested in technological development to democratize investments in the country’s stock market, which has significantly increased the number of its users. GBM went from having 38 thousand accounts to 650 thousand in just two years, which represents 70% of investment accounts in Mexico. Softbank acquired a minority stake in GBM for $ 150 million at the beginning of June, which allowed the company to proclaim itself as the third Mexican unicorn.

How many unicorns are there to appear?

The fact that there are three Mexican unicorns in less than a year shows us that we are facing a trend and not isolated events. Mexican startups have grown slowly but clearly, and many of them have managed to mature. The trust that investors have placed in them is proof of this.

Mexican startup ecosystem benefited from isolation measures. They were already prepared for this. Several companies in the Fintech sector just need to receive a boost, meanwhile, many people are betting on EdTech.

Further reading