Viva Mexico! Viva!

With a population of 120 million people, Mexico is the Latin America’s second largest economy (growth of 2.5% in 2015). The country who is “so far from god and so close to the US” according to Porfirio Diaz, knew how take advantage of its strategic position when we are talking about Fintech.

Personally, I thought that being so close to the US could corrupt the startup culture in Mexico opting for the easy path and doing copy/paste of American solutions. I am happily surprised that it is not the case. Mexico has a tradition of innovation and creativity along its history and its entrepreneurs pulled out solutions from its own culture and reality to solve latent problems. So let’s roll out the carpet for Fintech.

In Mexico, 60% of population is unbanked and only 20% have a credit card. Fintech appears as the best solution to finally solve the unbanked issue. In a country where cash is dominant and people prefer to save money under the mattress, banks had real difficulties to get them on board. Fintech companies have great challenges in front of them: educate the unbanked people about financial services and give them confidence using technology.

In order to help them in this mission, several initiatives were created by international programs, accelerators and incubators. For example, Village Capital and Accion Venture Lab partnered with Mastercard Center for inclusive growth, Pomona Impact and United IT Consultants created a program to support entrepreneurs making financial services more affordable and accessible for Mexicans who lack access to traditionalU financial services. This program of three months started in 2015 and recruited 12 ventures. At the end of the program, two peer-selected enterprises received USD 50.000 in investment each. The winners last year were:

  • BillPocket: a payment facilitator for more than 5.500 Mexican merchants using their mobile points of sale.
  • Credilikeme: an online lending platform that uses facebook to reach, analyze and engage borrowers.

The inscriptions for this year were already closed and we are waiting to know the selected startups.

Accion Venture Lab is an investment initiative that provides seed capital and support to innovative financial inclusion start-ups improving financial access for people living in poverty worldwide. In his current portfolio, there are 4 Mexican startups:

  • Clip combines a card reader plug-in for smartphones with innovative back-end risk management platform to enable nearly any merchant in Mexico to accept credit cards.
  • Konfio is an online lending platform that uses innovative credit algorithms an alternative data analysis to help microbusinesses in Mexico who do not have access to credit obtain affordable working capital loans.
  • Salud Facil offers low income customers access to affordable credit to cover their healthcare and medical costs in Mexico.
  • Quippi aims to replace high priced traditional remittances to families in Mexico with PIN-based gift cards redeemable at local retailers (grocers, clothing stores, convenience stores…).

Fintechs also saw opportunities in the recurrent problems that Mexicans living in the US face sending remittances to the country. These solutions demand work and involvement in both countries. This is a door opened for Americans to be involved in the solutions, as partners or investors for example.

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Clip at the Venture Capital Conference – Alianza del Pacífico

 

BBVA, the bank that “embraces the disruptive power of Fintech” is present in Mexico and through its BBVA Innovation Center, or #Piso33, it organizes events to boost innovation and technology in the Mexican Community. BBVA Bancomer has disrupted the financial services market in the country with the launching of several digital products first (digital wallet or hiring car insurance through an app).

On September 2015, the Finnosummit took place in Mexico for the second year. 350 participants of the Fintech community attended to explore with the 25 international speakers the future of the Fintech industry. The final of the BBVA Open Talent in Latin America occurred during this event with 12 finalists, among them there were some Mexican ones:

  • Openpay has an API that allows companies to accept and end payment to clients and vendors through internet and mobile phones.
  • ZaveApp helps you to reach your goals saving money without thinking about. You save without fees, easy, quick and fun.

On 20/09/2016, we will have the third edition of the Finnosummit at Mexico City. For more information, you can click here.

This year, Innotribe announced its first partnership with SWIFT’s Latam Regional Conference (LARC) to harness innovation happening in the region. The event will be organized in Mexico City from 28-29th june 2016.  Innotribe will select 12 startups to enter the startup challenge, showcase their products at the event and receive expert coaching and mentoring. The three finalists will attend the SWIFT’s annual global financial services conference, held in Geneva where they will share the stage with Fintech experts and representatives from leading financial institutions worldwide. For more information please click here.

If we talk about Fintech, we cannot ignore bitcoin and blockchain, the technology that is disrupting banks. In December 2015, the laBITconf took place in Mexico DF, gathering more than 300 attendants and 40 international speakers as Andreas Antonoupoulos and José Rodríguez, from Bitso, bitcoin pioneer in the country. Bitso is a Mexican bitcoin exchange that has recently acquired Unisend Mexico in an attempt to become the leading bitcoin exchange in the country. The conference shows the involvement of Mexico in the international ecosystem of digital currencies. Bitcoin seems very promising as a solution for the Mexico’s remittance market and cross border payments.

To consolidate all the initiatives and activities happening in the country, in October 2015 the Mexican association of Fintech, “FINTECH México”, was created. This association intends to create a collaborative environment boosting innovation and also union in front of important actors of the ecosystem as regulators and big companies. With a focus on 5 key areas (education, technology, research, regulation and networking), they plan to make the Mexican Fintech community stronger locally and internationally. This week, the association was awarded as one top brand influencer at the Innovate Finance Global Summit 2016.

At the Venture Capital conference of the Alianza del Pacifico in March 2016, Mexico congratulated and encouraged for more work of the four countries (Chile, Colombia, Mexico and Peru) to attract more investments in the region. After all, the four countries together have a bigger market than Brazil.

Today, there should be more than 100 Fintech companies in the country but this number should grow quickly (in 2020, 63% of mobiles in the country will be smartphones). Mexico brings an ocean of opportunities for digitalization and innovation in financial services that we expect to really change the financial landscape of the country.

Mexico is “so close to the US” (easy access to US knowledge of Fintechs, international American speakers/influencers go easily to its territory, interest of American investors…) but above all is a Latino American country so he can play a leading role in the spanish speaking community.

We expect to hear more about Fintech Mexico activities and successful histories, especially related to financial inclusion. Because as Cristine Lagarde, IMF secretary, said once “Mexico can become the inspiration for the rest of the world to “dare to dream.””

 

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StartupBootcamp: A global school

Next week, StartupBootcamp will organize two Fintech Fast track events in Mexico DF and Sao Paulo.

StartupBootcamp is a global network of industry focused startup accelerators. It started in Europe, Denmark and today it is present all around the world with 13 accelerators in 10 locations (Amsterdam, Barcelona, Berlin, Copenhagen, Eindhoven, Istanbul, London, Singapore, Miami and New York). Their three month programs give direct access to an international network of the most relevant partners, investors and mentors in their sectors. It won the admiration of Forbes and The Economist, praising their training system for entrepreneurs and an incredible high net worth network.

The StartupBootcamp (SBC) Fintech is the world’s largest accelerator for Fintech Startups. The three month acceleration is opened to worldwide startups with programs in London, Singapore and New York. The accelerator is the first one to receive support from leaders in the financial technology. These include 15 corporate partners, as Mastercard, Banco Santander, DBS Banks, PWC, Rabbobank among others. Yesterday, it was announced Deutsche bank decided to join the partner club too.

I would like to talk about the SBC New York program, whose applications are now open.

The startups selected will receive mentorship from entrepreneurs, investors and partners worldwide and will have access to international markets. In each batch, 10 teams are selected for a three month program to work in the New York facilities and each one will receive USD 20 thousand in cash. The program is led by Jesse Podell, a passionate about Fintech, who travels around the world to “taste” the Fintech ecosystem in other cities.

“Entrepreneurs need to think global from day one”, is a common advice from mentors. Building startups that is global-ready from the beginning will put entrepreneurs in the best position to deploy world changing solutions ahead of the competition. Countries with a small market as Colombia (47 million people) or Chile (17 million people) for example are already practicing this quote when they conceive the product because they want to reach more users. Big countries, as Brazil (200 million) or Mexico (120 million) have the reflex to focus on their local market, ignoring the global potential. International investors feel more confident when they deal with a startup that can be easily adapted to any country. A startup can start small, locally, but it has to have in mind that it needs to grow internationally: “Shoot for the moon. Even if you miss, you’ll land among the stars”.

To be close to the moon, a startup should take every opportunity to be in touch with international accelerators, investors, partners or team members. The result of the melting-pot will bring concepts and approaches that can pivot the initial product or service. International actors definitively add constructive input because they see the problem differently and hence the solution. After all, deconstruction is what makes us to think outside the box.

Therefore, when international accelerators launch programs in the US, Germany, Singapore or Chile, for example, Latin American startups need to apply. Doing the path to be selected and joining other international participants, enrich the life of the startups and train them for new benchmarks. A first advice…Go to the StartBootcamp Fintech New York and apply.

Meanwhile, you can also apply to the StartupBootcamp Fintech fast-track events that they are organizing for the next week. (StartupBootcamp Fast Track Mexico and StartupBootcamp Fast Track Sao Paulo)sao-paulo_Fintechmexico_Fintech.png

StartBootcamp will select 10 teams to perform a pitch during one day and receive feedback and mentorship from StartBootcamp NY team and known personalities from the startup local ecosystem.

This is another opportunity to gather the Fintech community in Mexico and Brazil to share experiences, woes and threats. It is also an opportunity to have a chat with the international experts to learn more about the accelerator program or to look for similar references of your product abroad. Don’t ignore the foreigner, he will definitively bring something new.

To end, shoot to the moon now!  Latin American Fintech startups can also become global references. That’s our mission.