Investor interest in Mexican startups grows 320%, small investors have boosted it

Mexican startups have proven to be talented and innovative, and that is why more and more investors are setting their sights on the country, since in the last five years there has been an increase in 320% annual averagereveals Arkangeles, collective financing institution supervised by the National Banking and Securities Commission.

According to the fortnightly analysis on financial education and growth of investment in startups in Mexico by Arkangeles, in recent years investment in startups in Mexico and the national sector has quadrupled, which concentrates 25% of the total investment in startups in the Latin American and Caribbean region, have also been influenced by the positive performance that the venture capital market is currently experiencing in the United States.

He detailed that 80% of investors between 35 and 45 years, consider that the public impact of an investment is as important as the potential return.

“Mobilizing capital from small investors towards alternative assets, such as emerging companies or startups, is breaking down the barriers that limit the world of investment in our region, promoting social change and sustainability and contributing to a better distribution of wealth in Latin America and the Caribbean”, Luis X. Barrios, CEO of Arkangeles.

crucial elements

Barrios explained that given the update of the financial regulation and the population’s interest in having other sources of income, especially due to the effects caused by the Covid-19 pandemic, they are now investing in products in alternative assets such as emerging companies or startups, which has allowed further growth.

According to data from the National Survey of Financial Inclusion 2021, from the National Institute of Statistics and Geography, 56.6% of people between 18 and 70 years old reported having a “surplus” of money at the end of the month, which could be used for savings or investment, with which they can double their economic amount.

“The motivation of small investors to participate in alternative assets has changed significantly in the last five years, as a consequence of the generational values ​​and consumption trends of the generation ‘millennial’”.

To access these investments, you can achieve from 3,000 pesos, which allows greater growth of investment in the sector. This shows that there is a different profile of the investor regarding age and socioeconomic status.

Likewise, there is the interest of the venture capital that only in the United States reached a record of $150 billion during the first three quarters of 2022. Indicates the PitchBook-NVCA Venture Monitor.

Priorities with startups

The investors surveyed, 650 in all, stated that one of the biggest priorities now is invest in companies with the potential to improve the quality of life of the population, especially in times of crisis such as the one experienced since 2020.

Likewise, they are looking for those that can solve social and environmental problems and can trigger the development of technology, which also helps to improve these situations.

For the World Economic Forum, startups are a catalyst for economic growth both globally and locally, so it is important to continue investing and working on its growth.

Fintech down

In contrast, startups in the fintech sector have suffered a crisis, since in the penultimate quarter of the year, financing in these startups was 13.3 billion dollars, a 71% drop compared to last year.

This represents the lowest figure in a quarter since 2020, when in the last of the year there were $11.7 billionindica la firma FT Partners.

Given these indices, specialists recommend that if you want to invest in startups, it is essential to evaluate the risks and opportunities to make the best decisions.

“As long as small national investors are informed, the investment ecosystem in Mexico will continue to advance,” concluded Marisol Reyna, coordinator of educational content at Arkangeles.