By Duncan Tucker
Even start-ups in war-torn Afghanistan have more access to venture capital than do those in Mexico, a local investor complained to a group of entrepreneurs in Guadalajara recently.
“There is more money in Afghanistan invested in venture capital, even when they are at war, than there is here,” Rogelio de los Santos, a founding partner of Alta Ventures Mexico, told
the monthly iTuesday meeting designed to encourage greater investment in the region’s many promising but under-funded start-ups.
Telling the group that Mexico lags behind the Middle East and Africa in terms of start-up investment, De los Santos lamented that local entrepreneurs lack both the initial “seed” funding and the additional development funding essential to get a project off the ground.
It is a common complaint among start-ups in Mexico, who say local investors tend to favour more tangible and well-known investments such as real estate.
Those at iTuesday hope to lead the way in rectifying the situation. Over 150 investors, entrepreneurs and other interested parties attended the March meeting, with a quick show of hands revealing around half the audience had been at February’s inaugural iTuesday, while the rest were newcomers.
This month’s pitchers included Jorge Suarez, director of Yuppics, a website that allows Facebook users to print batches of 84 photos (18.5 x 14.5 cm) from their Facebook account and send them anywhere in Mexico for 100 pesos ($8 USD). With three regular staff and four outsourcers, Yuppics was formed in December 2010. So far they have received funds of $32,000 USD, and although Suarez insists they are not in desperate need of more capital, they could use another $35,000 to devote to marketing.
This was Suarez’s second time at iTuesday. “I love it. I’m such a networker and I keep on seeing a lot of my friends here. I’m really happy that this is happening right now,” he said, before admitting the local start-up scene is “still stuck” due to a lack of investment. With this in mind, Suarez praised the iTuesday organizers from mexVC investment group for “fostering start-up weekends and putting money in Mexican start-ups, which I really respect.”
Another person trying to change the situation is Cesar Salazar, a partner in Mexican.VC, a Silicon Valley-based seed fund for Mexican internet start-ups (not to be confused with the aforementioned mexVC). Salazar said that Mexican.VC began to invest six months ago and have so far invested a total of $30,000 USD each in seven companies: “two in Guadalajara, two in Mexico City, one in San Luis Potosi, one in Merida and one in Queretaro.” They plan to invest $5 million USD in 80 companies by 2016 and are currently accepting applications for their second round of funding.
There were plenty of start-ups eager to attract funding. Another pitcher at the event was David Silva Yanome, project manager of MAYA Diseño Electronico, a local hardware and software development company. With a staff of six to eight people from Guadalajara, the project has been underway for six years. Silva said they are looking for investment of one to ten million pesos ($80,000 to $800,000 USD) in to order to grow and keep developing.
Other pitches included the Recy Wheel recycling project and ReCreyendo, a children’s book available in print, as an e-book or an audio book in CD or mp3 format. Through the experiences of a pair of young dinosaurs, ReCreyendo teaches kids values and beliefs in order to build their confidence.
Besides pitches, guests were also offered networking tips and invited to participate in industry events such as:
MexEEdev 2012: Mexico Electronics and Embedded Developers Forum at Guadalajara’s Hotel Fiesta Americana Grand from March 27-29.
Founder Institute Pitch Bootcamp at the IJALTI room in Guadalajara’s Centro de Software on April 5 at 7 p.m.
The iTuesday organizers also have big plans, with a venture capital conference scheduled to take place in Guadalajara on May 23, along with an “E-100” event to identify 100 entrepreneurs with the greatest potential in western Mexico.
iTuesday coordinator Alem Muminovic also revealed plans to start a seed fund in Guadalajara called KickStart del Occidente. Promoted by mexVC, it is administrated by Alta Ventures Mexico, who hope to raise $10 million USD in the first half of 2012 for investment in the best local projects.