NewsLatin AmericaMonterrey, the silent hotbed of emerging companies growing in Mexico

Monterrey, the silent hotbed of emerging companies growing in Mexico

Nacho Alvarez co-founded Moneypool, a money transfer app, in 2014 in Monterrey, Nuevo Leon. The birth of the start up, as these types of emerging companies are called, in the Neo Leonese capital was chosen partly “accidentally” and, on the other hand, “programmed”. “When I arrived in Monterrey I began to expose myself to this concept fintech [tecnologicas financieras] and the idea began to emerge. What Monterrey has that any hub [centro] need is to have access to technical talent”, he told this newspaper in a video call. The city of New Leon has been growing in recent years as a place with suitable conditions to be a “seedbed” for this type of company. The specialized website StartupBlink has positioned Monterrey this year as the sixth place in Latin America to develop this type of business. To carry out the classification, the page takes into account the quantity, quality and business environment of 1,000 cities.

With 1.1 million inhabitants, the city struggles to be among the most desirable cities for the development of new technologies. Monterrey —ranked 139 in the world, 10 places above 2021—, has surpassed cities like Guadalajara in the ranking, the city of Jalisco that was called to be the Mexican Silicon Valley and that, currently, is the third best city in Mexico and the 202nd in the world.

Mario Garcia, co-founder of the angel investor club (aimed at emerging companies) AngelHub, has been involved in the world of technology business in Nuevo Leon for almost 10 years. He tells this newspaper that Monterrey’s secret to being a center for the development of start-ups It is sustained on three main legs: strong geographical positioning, the number of companies and the large number of entrepreneurs that emerge from university centers.

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Garcia defends that, unlike Guadalajara, Monterrey has a greater number of engineers and students. To back this up, he mentions some of the local universities: the Tecnologico de Monterrey, the Autonomous University of Nuevo Leon, the University of Monterrey, U-ERRE, “and many other private universities,” he concludes. The State of Nuevo Leon is recognized for being a talent training center, according to the high-impact entrepreneurship NGO Endeavor, which counts the community of Neoleonese students at 1.6 million.

The AngelHub co-founder affirms that another of the strong points is the number of large companies that —in reference to companies such as Femsa, Cemex or Grupo Alfa—, according to him, are closer to entrepreneurs. Finally, he highlights the geographical position of the Neoleonese city. “It’s close to Texas. And from the United States. With Texas alone we have a series of projects where we are getting closer to the ‘Golden Triangle’, which is made up of Austin, Houston and Dallas and which generates more than a trillion dollars of business”, Garcia defends in the video call.

Despite the good results, Monterrey is the second Mexican city in the StartupBlink ranking, after the country’s capital. Nacho Alvarez tells that Mexico City has a plus on most topics. “Everything you want, you multiply it by five, and you have it there,” she defends in the form of hyperbole. The CEO of MoneyPool seconded the importance of the royal geography, which he considers “very strong and very natural” in helping to make it an important center for companies. In addition, he highlights the naturalness for innovation and entrepreneurship of the young people from Neo Leon, who promote the positioning of the city. He believes that the possibility that Guadalajara has grown in the previous years may have created a certain “comfort” in the capital of Jalisco, so that its technological need could have been “satisfied.” “In Monterrey you see that there is more opportunity to do small things, to become big later on. Guadalajara is already half pigeonholed to be the hub one of the big ones and Monterrey the hotbed”, he reflects.

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Endeavor’s study also specifies the obstacles that the Neoleonese capital faces. Through a survey of 100 entrepreneurs, they highlight that the greatest difficulties Nuevo Leon faces are access to clients, access to financing and the availability of qualified senior managers. They also affirm that there is a disconnection and a lack of communication between the ecosystem components of emerging companies: entrepreneurs, investors, businessmen, universities, corporations and organizations.

Endeavor records that the State of Nuevo Leon created 68 “entrepreneurships” between 2018 and 2022, among which one of the so-called “unicorn” stands out, those technology companies with a value of more than 1,000 million dollars: Nowports, a dedicated logistics company to facilitate imports and exports of goods through technology. For its part, StartupBlink counts 45 start-ups developed in Monterrey and, among others, shows the name of MoneyPool.

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Alvarez and his partner chose Monterrey to found the company in part “accidentally” and, on the other hand, in a “programmed” way. From that “programmed” part, the co-founder defends that interesting initiatives have taken place in the city that have motivated entrepreneurs. Both the universities and the state and city governments arose projects dedicated to the technological business sector. Among these ideas, examples were born such as INCmty, the entrepreneurship festival with the greatest impact in Latin America.

The MoneyPool co-founder maintains the defense that university graduates. He says that young people dare to innovate. “The ignorance of youth is a blessing,” reflects Alvarez. “When we launched MoneyPool we didn’t think about the legal consequences. Mexico has a big problem in online fraud. It is what has killed many competitors. If the first day they told me I was going to spend four years fighting against this type of fraud, I would have said that it was better not to start anymore ”, he ponders.

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