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Government IT Development

Mexico’s battles for tech independence

Mexico has been characterized for many years by its importation of technology and lack of its development. However, there are efforts within the country to transform this panorama.

September 16 is the national day of Mexico. Unlike other countries, Mexico’s national day is not the day it signed its independence, which was September 21, 1821. Nor does it celebrate its current constitution, signed on February 5, 1917. In Mexico, the celebration alludes the day he began his process for independence, started by the cry of the priest Don Miguel Hidalgo in the church of a small town called Dolores.

Some Mexicans refuse to celebrate the country’s Independence because ‘it does not exist’, they say. However, I consider it significant that the country celebrates the beginning of a process and not its consummation. Mexico managed to conform itself as a nation and cease to be a colony of Spain, but in many ways it is not yet an independent country.

Achieving technological independence is still a struggle in Mexico. The industrialization of the country came late and when it did, it was only as an importer of technology rather than developing it. However, many Mexicans struggle to change this situation. These are some examples of Mexican innovations in the Fourth Industrial Revolution.

Mexico, Fintech leader in Latin America

Mexico City is considered the top Latin American Fintech entrepreneurship hub, according to the report ‘The impact of Fintech innovations in Mexico’ prepared by Startbootcamp Fintech together with the consulting firm Ernst & Young (EY).

In addition to this, Mexico continually competes against Brazil as the leader of the Fintech sector in the region. In May 2019, Finnovista ranked it as the leader in digital financial services in Latin America, surpassing Brazil.

Among the Mexican fintechs that have seen the success, we have the crowd equity platform Play Business, as well as P2P Lending services such as Prestadero and Doopla, which recently obtained 10 million pesos of investment. However, in Mexico, we have not yet seen the case of a successful unicorn like the Brazilian digital bank Nubank.

In Mexico, it was feared that fintech law regulation would discourage innovations within the sector. Despite the fears, Mexican fintechs have continued to grow, paying to achieve financial independence in a banking ecosystem dominated by foreign companies.

Guadalajara, a Silicon Valley in Mexico?

For several years ago, the government of Jalisco has promoted, together with the federal government, the Guadalajara Metropolitan Area (ZMG) to become a hub for innovation and talent in Latin America.

The project is called Digital Creative City, which for several years has sought to recover the area around Parque Morelos in the Guadalajara capital to promote enterprises related to animation, video games, and technology.

Added to this, the ZMG is already home to several manufacturing technology companies. Also, thanks to the region’s universities, small and medium-sized software companies have settled in the city and its surroundings, to the point that it is now one of the preferred destinations for Nearshoring.

The battles for technological independence

With development projects and the promotion of business creation, Mexico is halfway to achieving technological independence. However, there are still many pending tasks that make it difficult to meet this goal.

Among the problems facing the country are:

  •     Internet coverage: the Mexican population is one of those with the best Internet access in Latin America. However, the country’s territorial coverage still leaves much to be desired and rural areas are still largely neglected, where the poorest population lives. The country needs to continue its efforts to close digital gaps.
  •     Technologic education. How much talent there is in a country is one of the criteria that companies usually consider when migrating to a city. In some areas of Mexico, technology careers have been promoted. However, in many cases these schools are disconnected from the needs of companies and graduates have problems finding work later.
  •     Lack of state investment: In the past six-year term, the Mexican government began with a timid effort to promote innovation and technological development in strategic areas such as artificial intelligence and robotics. However, the current administration has changed its priorities. The country’s state investment in these areas is still well below the OECD average, while the country does not paint on the world stage in technological development, as it happens to the rest of Latin America.

Despite the great challenges facing the country, we often find stories of entrepreneurs and innovators who develop solutions to the problems facing the country, companies that bet on Mexican talent and startups that achieve international recognition.

The war for independence took more than 10 years. Mexico’s jump to a developed country will not be easier.

Read also: Top 5 Tech cities of Mexico

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Fintech

Mexican Fintech got founded by the crowd in a few hours

In a few hours, the Mexican fintech Doopla.mx opted for collective financing through the crowdequity platform known as Play Business.

The crowdlending startup had as a goal to get 5 million pesos. However, in a few hours it had already achieved twice what it needed to be funded, running out of open quotas for investors.

Players, as the Play Business platform calls its investors, will receive as a guarantee at least 12% of their investment in the first six months after the startup is funded, and will be able to obtain annual benefits of up to 35%. In addition, in the event that the company is acquired by another company, as is often the case with this type of startups, investors will get their investment back plus 35% per annum multiplied by three.

The guarantees offered by the startup, added to the rapid growth that Doopla.mx has had in recent years, made this company too attractive, so that in a few hours the quotas had already been exhausted.

Learn more about Doopla.mx through this video (in Spanish):

Will the first Mexican unicorn be a fintech?

Mexico is considered the main technology hub in Latin America for the Fintech sector. Along with Brazil, it is the country in the region that has seen most companies emerge in this area.

Doopla.mx and Play Business, the platform used to finance it, are a couple of examples. However, unlike Brazil, in Mexico, no unicorn-like Nubank or Creditas has yet emerged.

The numbers presented by Doopla.mx for potential investors suggest that this company could be on its way to becoming the first Mexican unicorn.

This P2P Lending startup was founded five years ago and also became the first company to submit its request to the National Banking and Securities Commission (CNBV) to comply with the Fintech Law.

Other Mexican companies with a similar business model than Doopla.mx are Prestadero and Yopreso.

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Transportation

Do you know Uber’s e-bikes in Mexico City?

Since August, the Jump Bike rental service is available in Mexico City. Users can rent these electric bicycles from the Uber app by selecting “Bicycle” in the platform. This option is an alternative to move faster between city traffic.

Users can unlock the bicycle lock with a code that will be offered from the application and park them later in the service area.

Mexico is the first city in Latin America where Uber presents this service that is already available in various parts of the United States and Europe.

Jump service areas

Uber bicycles are available in polygons in the city such as Polanco, Juárez, Roma-Condesa, Cuauhtémoc. The cost of the service is 10 pesos per unlock and 3 pesos per minute of bicycle use.

In addition to bicycles, Jump also offers scooter service. However, the current regulations of Mexico City prevent them from providing this service.

There will be almost 5K bicycles in the city

On August 2, 2019, the Secretary of Mobility of Mexico City (SEMOVI) began the process to offer annual permits for operation of bicycles without anchorage.

A total of 4,800 bicycles without anchorage will be available in the city, with the presence of Motum, Jump, and Dezba.
The promotion of this sustainable transport is part of the Strategic Mobility Plan 2019.

Semovi has worked collaboratively with the anchorless bicycle companies to carry out this regulation, which can provide them with certainty to make their investments in the capital.

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IT Development

When the Internet disappears: blackouts around the globe

July 25, 2019. Thursday. Afternoon. The largest fixed broadband Internet service provider in Mexico, Telmex, presented a massive failure. Users of his partner company, Telcel, also reported problems in the service.

The failure only affected these two companies, but these two are the largest telecommunications companies in Mexico. Telmex has 9.7 million fixed broadband users, while Telcel operates 75.6 million mobile lines in Mexico. Both companies are subsidiaries of América Móvil, the corporate of Mexican tycoon Carlos Slim.

The company reported to the media that the burning of grasslands in the Mexican states of Sinaloa and San Luis Potosí caused the massive failure, damaging the fiber optic cables. They added that the corresponding investigations would be done to find those responsible for the damage to telecommunications networks.

The total number of users who went offline has not been disclosed. The fault affected several states of the Mexican Republic, including Mexico City, State of Mexico, Nuevo León, Puebla and Jalisco, entities where more than 50% of the population of the country lives. Those who could complain about the failures of the social media service received an automated response. The company’s service lines were not available.

Are damage to telecommunications cables common?

Damage to telecommunications cables is quite common worldwide. Stephan Beckert of TeleGeography Research estimated in 2008 that on average, a submarine cable was damaged once every five days. The decentralized nature of the network intends that users do not notice these failures. As soon as a connection is interrupted, the system automatically searches for an alternative route for the link. Currently, there are more than 56 ships worldwide that are dedicated to repairing submarine cables damaged by stones or anchors. Most users do not notice when these cables are damaged because they are automatically redirected. However, sometimes the damage causes significant failures.

In Mexico, people are used to technology doesn’t work as it should. Mexicans often joke with the phrase “the system fell,” commonly said in self-service establishments when they could not process a card payment for any connection failure. The refrains origins are even older. In 1988, the Secretary of Government Manuel Bartlett (now director of the Federal Electricity Commission) appeared at the media to report that the system that was monitoring the presidential vote count “fell.” When this fail happened, the count showed the presidential candidate of the opposition party in the first place. However, the connection cuts are not exclusive to Mexico.

A massive failure of Internet services worldwide is a good argument for an apocalyptic science fiction story, but also an unlikely scenario. The decentralized feature of the telecommunications network that makes up the Internet allows devices to look for alternative ways to communicate when a connection fails. Despite this, massive Internet outages are always happening worldwide, some caused by authoritarian regimes, others for hilarious reasons.

Mexican politician Manuel Bartlett announced a fail in the computing system of the votes

Can an Internet blackout be provoked by sabotage?

From January 23 to February 4, 2008, the Internet service of the Middle East and India showed disruptions and slowdowns due to damage to the submarine communications cables of the Mediterranean Sea and the Middle East. The experts considered that it was an accident, although they never discovered the causes. This misinformation provoked some people to raise their eyebrows and begin to elucidate conspiracy theories about the incident, from suspected terrorist attacks to US military strategies to attack Iran.

An Internet blackout hit Syria in November 2012 while intense clashes were taking place between groups of Islamist rebels and the Syrian government of Bashar al-Assad. The antagonist groups blame each other for the incident. Two years later, Edward Snowden commented that the National Security Association was responsible for the massive drop in the service. According to Snowden, the NSA tried unsuccessfully to infiltrate the hardware of Syria’s largest service provider to learn about the population’s Internet usage patterns.

The fear of conscious sabotage against submarine cables is partly based. In December 2017, NATO expressed concern about a more significant presence of Russian submarines in the areas where these cables are placed. However, accidents also happen frequently.

Big fail in the Internet service

In 2011, a 75-year-old Georgian woman left three million inhabitants of Armenia without the Internet, in addition to affecting some users in Georgia and Azerbaijan after damaging the cable responsible for 90% of the country’s Internet connection. The woman damaged the cable while digging to find copper.

In Mexico, the Telmex service presented connection problems in 2018 that harmed the inhabitants of the Yucatan Peninsula, in addition to Puebla, Tabasco, and Veracruz. On that occasion, the company only declared that there were “massive failures” in its service, without specifying the causes. Some experts suggested that these problems could be due to the growth of infrastructure in the country, such as the construction of roads that damage the company’s fiber-optic.

The decentralized feature of the Internet protects itself from most eventualities, but it is not invulnerable. A small failure can cause a big connection problem, especially in regions with poorly developed infrastructure.

Governments can shut down the Internet

Sometimes, governments themselves are responsible for massive failures. The Access Now organization reported that the cuts to the Internet service increased in number, from 75 in 2016 to 196 in 2018, the majority caused by authoritarian regimes.

These cases are more common in countries where there are only one or two internet service providers (ISPs) or when the government is the primary service provider. In this way, it is easier for governments to control the sites that are visited by citizens or even prevent full access to the Internet. However, these censorship measures have their weaknesses, as users can still access the banned pages with a VPN service.

There are multiple documented cases in more than 30 nations around the world in which the government cut or pressured to cut the Internet service. In Latin America, Venezuela is the most cited case. Opponents of Nicolás Maduro accuse the government of knocking down the Internet every time protests are organized against him.

In the early days of 2019, the Internet service failed before announcing the results of the elections and arresting members of the opposition parties in the Democratic Republic of the Congo.

However, India is the country with the highest government interference on the Internet. In 2019, the police have shut down Internet service 55 times in regions of the country with the excuse of preventing terrorist attacks.

The hackers’ threat: Cyberattacks

Some years ago massive cyberattacks were only part of sci-fi plots, but recently they became a real threat. The DDoS attacks boomed in 2016, causing the most prominent Internet service failure in history on October 21.

Responsible for these massive attacks was Mirai malware, developed by students Paras Jha, Josiah White, and Dalton Norman. The initial intention of these students was to attack Minecraft servers to boost their business of DDoS mitigation tools. This team discovered a way to take advantage of the low-security levels of most devices connected to the Internet of Things and shared it online.

The code of Jha, White and Norman exceeded the expectations of its creators when it was used to attack Dyn, a company of Domain Name Servers (DNS), causing problems in the Internet connection of North America and Europe. Wired described the attack as “the first thermonuclear bomb in the DDoS world.”

A month later, an attacker used a variant of the Mirai botnet against the routers of the German company Deutsche Telekom. The attack left 900,000 Internet users offline, while another variant of the same malware left entire Liberia without the Internet.

These attacks revealed how vulnerable the network could become without adequate security measures.

The economic cost of Internet blackouts

Massive failures in Internet services have raised concerns about the economic costs of Internet outages, regardless of whether they were caused by infrastructure failures, by the decision of the authorities or by cyberattacks.

The Organization for Economic Cooperation and Development (OECD) estimated that Egypt lost $ 90M when the government prevented access to the Internet for five days as a measure to avoid the rapid spread of Arab Spring protests. According to the agency’s calculations, if this measure had been extended for a year, the Gross Domestic Product of Egypt would have fallen between 1% and 4%.

The economic impact of the Internet has led the United Nations to issue a resolution to support “the promotion, protection, and enjoyment of human rights on the Internet.” The UNO condemned measures that disrupt Internet access.

The Brookings Institute estimated that the Internet shutdowns cost between July 2015 and June 2016 $ 2.4 billion worldwide. The report called The economic impact of disruptions to Internet connectivity calculated that one-day interruptions in the Internet connection cost countries with high connectivity 1.9% of their daily GDP. For countries with medium connectivity, service interruption costs 1% of their daily GDP.

DDoS attacks interfere with the online operations of companies, resulting in lost sales during the interruption period, in addition to customers. If the attack gains visibility, it can even damage the image of the brand and reduce its future revenue, according to a report published on February 2018 by The Council of Economic Advisers.

On average, a DDoS attack costs businesses $ 2.5M, according to a Neustar report. In the case of Dyn, 8 K domains stopped using their service after the attacks, meaning a 24% loss, according to BitSight data.

These figures highlight the importance for both companies and governments of protecting the infrastructure that allows the Internet to function properly and without interruptions: ensure that there are enough fiber optic cables deployed to mitigate the eventualities that may interrupt the connection of large areas, ensure that Internet service providers are independent companies from governments and take the necessary security measures to prevent infection of the devices and mitigate the effects of DDoS attacks.

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IT Development

Animation and video games: Two serious careers in Guadalajara

More than 600 companies dedicated to software development have chosen Guadalajara as its headquarters. A significant number of these companies are focused on the development of video games and animation, two industries with accelerated growth and in which Mexico has stood out.

In 2018, the videogame industry reported $43.8B in revenue worldwide, according to data from the Entertainment Software Association and the NPD Group. In the same year, the animation industry obtained $259B in revenue, according to the report Global Animation, VFX & Games Industry: Strategies, Trends & Opportunities, 2019.

Mako is an animation studio in Guadalajara.

In Mexico, the video game industry represented an economic spill of one billion dollars in 2017, placing this country as the Latin American leader in the industry, surpassing Brazil by more than 90 million dollars. The animation industry is still developing but reports an annual growth of 18%.
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To sustain this growth, it is not enough with economic incentives or infrastructure facilities for companies, but it is also required to develop human talent that can compete internationally.

Schools of animation and video games in Jalisco

Until a few years ago, there was no educational offer in Mexico focused on videogames or animation, especially in Jalisco. Many of the companies had to invest in the training of personnel that later left the company to receive better job offers abroad. At present, this situation has changed. Several schools consider these industries within their curriculum.

In Guadalajara, the offer is increasingly, and even there are specialized educational centers in these areas, such as the Digital Arts University, the Amerike University or the University of Advanced Technologies. These schools offer specialized degrees in both videogame development and animation. Other private schools have incorporated subjects for the development of videogames into their curricular map, while others, such as the Universidad Panamericana, offer undergraduate studies in these areas. In the public universities, the University of Guadalajara has a diploma for the creation of 3D characters, animation, and special effects, as well as a Bachelor degree in Video Games in its campus of the Coast.

Larva Games is one of the first Video Games companies in Jalisco

Guadalajara’s schools usually have agreements with animation studios in the city. Amerike University, for example, has 18 deals with animation studios and 14 with video game developers and belongs to the Jalisco Association of Creative Industries.

The Jalisco Association of Creative Industries feeds this expanding ecosystem. This association, presented at the Guadalajara International Film Festival in 2016, aims to “turn creative industries into one of the strategic industrial, economic and cultural sectors of the country to generate wealth.”

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Government

Trump’s tariffs: a new threat for market

The US Presidente Donald Trump repeats a well-known cantata since he took office: Tariffs will rise. However, this threat comes at a time when no one was waiting for it.

In recent months Trump had concentrated his efforts against China, and relations with Mexico had a better tone thanks to the USMCA, about to be approved.

Trump’s stance is difficult to understand. Imposing tariffs on the countries that sell you is like asking the owner of a supermarket to pay you for the right to buy things. Maybe he’ll do, but it will make you buy your products more expensive.

Trump’s stance also has an electoral tuff. All attempts to build a wall on the border between Mexico and the United States have been blocked by both the Congress and the Supreme Court of the United States. Trump resumes his electoral rhetoric and wants to show that his threats work.

Markets worried about tariffs against Mexico.

The increase in tariffs hits international trade harder because of the surprise of the measure. Although at the beginning of his presidential period, Trump found a victim in Mexico to retaliate his anger, the ratification of the USMCA promised to change this situation.

“The threat of tariffs on Mexico was completely off the market’s radar,” said Cliff Hodge, director of investments at Cornerstone Wealth Group. “No one has been talking about tariffs on Mexico.”

The threat, which would not enter into force until June 10, has already had its effects on the market. Dow Jones fell 1.4% on Friday, along with the S & P and Nasdaq.

The unforeseen tariffs shake the technological industry, who see Mexico as an alternative to China. The Verge commented that GoPro had planned to move its production to Mexico due to the economic war between China and the United States.

The primary industry affected was the automotive industry. The production of cars depends a lot on free trade between Mexico and the United States. The United States has imported $59B in parts from Mexico, while last year Mexico received 2.7 million finished cars and trucks with an approximate value of $52B, according to data from the US Department of Commerce.

This year, sales in the automotive sector have fallen, so they will probably prefer to cushion tariffs instead of increasing prices, with a reduction in the profit margin.

The consequences in Mexico are also felt. On Friday, the Mexican peso fell sharply against the dollar (3.5%). The president of Mexico sent a letter to his counterpart, where he asked to avoid confrontation.

“Tariffs are not an appropriate tool to address serious immigration challenges, The most effective way to address these concerns is for the administration and Congress to pass a permanent solution to fix the United States’ broken and outdated immigration system.”, commented Jason Oxman, CEO and president of the Information Technology Industry Council (ITI).

Analysts from the United States considered that Mexico could respond with an increase in tariffs. However, this seems not to be the case.

In the port of Veracruz, López Obrador announced that he would take measures to control the migratory flow, concerning human rights, to avoid an economic war with the United States.

This statement could prevent the conflict from escalating, but it is also a bad sign. It would make us think that threats are a useful diplomatic tool to solve problems that are incumbent in both countries.

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Fintech

Fintech in Mexico: with almost 400 startups, the country regains leadership in LatAm

Mexico regains its leadership in Latin America in the Fintech sector with 394 startups, according to the latest report by Fintech Radar Mexico. With this number, the country exceeds Brazil, which has 380 startups, according to the Fintech report in Latin America 2018: growth and consolidation presented in November by the Inter-American Development Bank and Finnovista.

In 2018, the enactment of the Fintech Law in March and the publication of secondary laws in September created uncertainty in the sector. Despite this situation, the number of fintech in the country increased by 18% since July 2018, when Finnovista made the last measurement. Since then, 98 new startups were created, while the mortality rate was 11.3%. Finnovista surveyed a third of the startups that exist in Mexico for the Fintech Radar report.

Fintech Radar Mexico 2019

Of the companies that make up the sector, the sub-strata of Loans, and Payments and Remittances continue to be the most popular in Mexico and, as a whole, make up more than 40% of the country’s fintechs. Most fintech branches in Mexico grew, except for Crowdfunding and Patrimonial Management, which fell -3 and -20% respectively. Digital banks had the highest growth (200%), an indicator of the acceptance of startups such as Albo or Hey.

Mexican Fintech by categories

The fintech sector is made up of young companies. 70% of the fintechs were founded in the last five years. More than half of the startups are in Mexico City: Monterrey and Guadalajara are the other two cities with most companies. Only one in five Mexican startups operate outside of Mexico, with Latin America being their preferred destination, followed by the United States.

Banking in Mexico is on the rise, and financial products still have plenty of space to expand. The banking population grew by 37% in the last six years and now 68% of the population has some financial product. 38% of Fintechs seek to increase financial inclusion.

The Fintech law in Mexico gives greater legal certainty to the sector. However, 53% of the surveyed companies consider that it will be a barrier to the incorporation of new players, while 46% think the costs to comply with the law will cause inefficiencies.

In addition to the proliferation of new competitors, Mexico is one of the most attractive markets for companies in the region that are becoming internationalized in countries such as Chile. The country has also seen the entry of startups in the region such as Nubank. Foreign competitors only concern 5% of Mexican startups.

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Shop

Hot Sale promotes e-commerce in Mexico

The Hot Sale 2019 begins in Mexico, an event that seeks to promote the digital ecosystem in this country. From May 27 to 31, e-Commerce will present their best promotions so that more people become familiar with online purchases.

Since 2013, online shoppers or e-Shoppers have grown at a rate of 7.22% per year in Mexico. The e-Shoppers represent 31% of the population with Internet connection in the country, where penetration to the Internet already reached 71% of Mexicans.

Thanks to the improvements in connectivity in the country, the increase in financial inclusion and digital literacy, e-commerce in Mexico will continue to grow. This trend has been observed by multichannel stores, whose online sales have increased by 25% more than other channels.

Hot Sale increases sales, awareness, and traffic

According to data from the Results Survey HS18-Nielsen, in 2018, the Hot Sale offers produced: $ 449M in sales, a growth of 75% compared to 2017; 11.6M units sold of products or services, 93% more than HS 2017; 6.1 million orders online, 52% more than in 2017. Of these sales, 2.1M were made by new buyers. The Google Consumer Survey HS18 survey indicates that for 53% of buyers, it was the first time they bought during the Hot Sale. Of these, 13% was the first time they purchased online.

In addition to benefiting from increased sales during the Hot Sale, e-retailers gain awareness and traffic on their sites. 53% of Mexicans already know the event, of which 70% are in the age group of 18 to 35 years, according to Google Consumer Survey HS18. The sponsors of the Hot Sale managed to increase their traffic 2.2 times more than in 2012, with a total of 160M visits to their sites, according to HS18 – Google Analytics.

Hot Sale 2019: forecasts

For this year, data from MercadoLibre estimated that consumers would spend an average of four thousand five hundred pesos, being the category of clothes and accessories the best sold, followed by electronics and more users will buy online from their smartphone.

Also, the trends of past years pointed to the ratio of male and female buyers would be matched in 2019. In 2017 65% of the buyers were men, while last year the proportion was reduced to 55% men compared to 45% women.

This year, e-retailers expects $580M in sales.

The way of buying and selling has changed more in the last two years than in the two previous decades.

Pierre-Claude Blaise, CEO of the Mexican Association of Online Sales
Pierre-Claude Blaise talks about Hot Sale (in Spanish)
Categories
Fintech

Digital bank Nubank arrived in Mexico

The Brazilian fintech Nubank arrived in Mexico, according to Business media. Nu will be the name of the company in the country, which will seek to compete with the traditional banking system.

Nubank began operations in Brazil six years ago as an alternative to traditional banks. In that time, Nubank went from having 12 clients to 8.5M users. Since then, this Brazilian fintech has grown with the founding of different venture capital firms such as Sequoia Capital, Founders Fund, Kaszek Ventures, Tiger Global Management, Goldman Sachs, until becoming the third Brazilian startup to achieve the status of ” unicorn “(after PagSeguro and 99) in 2018.

In this year, the company announced the start of operations in Argentina and now in Mexico. These announcements talk about a process of international expansion that the company is experiencing, mainly towards Latin American markets where the level of banking penetration is deficient, and there is a lack of confidence in traditional financial services.

David Vélez, CEO of Nubank, commented on the current expansion process that the company is undergoing: “We finally took the step of taking our revolution to new markets, and we see a great opportunity to do the same in Mexico.”

Velez said that before arriving in the country, the company studied the Mexican financial system for several years, as well as consumer complaints about traditional banking.

Nubank is focus on customers

As a bank, Nubank is a digital native and seeks to distinguish itself from traditional banking by focusing on customers. On this subject, Vélez said «We created a company focused a 100% on the client and a product that solves their problems. When you see the traditional banking industry in all countries are oligopolies that 4 or 5 banks own 70-80% of the market, then there has not been much competition. You want a credit card or a bank account, and they are doing you a favor, and it must be the opposite. “

In recent years, traditional banks have introduced digital products such as mobile banking or new electronic payment options. However, Vélez does not consider that they represent a problem for the growth of the company. «Banks now see the success we are having, and logically they are in a stage of reinvention of their business. Some of them still think that the challenge is to create a better website or a better app, which often seems like a Blockbuster wanting to compete with Netflix, or taxi drivers creating an app to compete against Uber. It’s not just technology; it’s more a cultural challenge ».

Both Mexico and Brazil are fintech leaders in Latin America, occupying the second and first place in the region of ventures related to digital financial services, according to data from Finnovista.

Categories
Startups

5 Mexican startups that fought against adversity

Cinco de Mayo has become a holiday to celebrate the Mexican culture in the United States, driven by the importer in Texas of Corona and Grupo Modelo beers. A successful campaign: more beer is drunk on this date than on St. Patrick’s Day or the Superbowl.

In Mexico, Cinco de Mayo is a celebration that has taken a back seat, although it commemorates one of the few battles won by the Mexican army against an invading army, having almost all the factors against it.

Like Mexican soldiers in 1862, Mexican startups have also had to undertake in an adverse environment. Mexican SMEs have one of the highest failure rates in the world, and in recent years Mexico has fallen into the ranking of the Doing Business report, which measures the ease of doing business by country.

Despite the numbers against, these five Mexican startups have managed to innovate in recent years, raise venture capital and expand to other countries.

Clip

Clip is a Mexican startup founded in 2013 by Adolfo Babatz and Vilash Poovala. This company seeks to solve the problem that many businesses have to accept card payments when converting any cell phone into a payment terminal. Since its foundation, the number of clients has grown exponentially, and last year they presented a new product. The company has received capital from Angel Ventures, Dalus Capital and 500 Startups. This year Clip will seek additional founding.

Kueski

Kueski is a micro-lending platform, founded in 2013 by Adalberto Flores and Leonardo de la Cerda. The entrepreneurs saw an area of opportunity in Mexico when they observed that very few credits were granted in the country. People apply online, and money is deposited in less than two hours.

Tumbiko

Tumbiko is an e-commerce of Mexican artisan jewelry, founded by Victor and Aldo Uribe, both of Taxco. When seeing that many artisans were leaving their work, they decided to connect them with designers to maintain the tradition of the jewelry that has characterized this town of Guerrero.

Luuna

Luuna is a mattress company that has taken advantage of e-commerce to deliver mattresses without springs at an affordable price. The cushions are packed in high vacuum and shipped to any part of Mexico from the factory in Monterrey.

Luuna comments.

Kichinik

Kichinik is an e-commerce platform that offers Mexican entrepreneurs everything they need to start their online business. Kichinik was founded by Claudia de Heredia and was chosen in 2015 by Google on Demo Day.