Key trends highlighted in the report include:

• The tech startup ecosystem in Mexico is vibrant and rapidly evolving, driven by factors such as increasing access to funding, growing entrepreneurial talent, and supportive government policies
• The sectors have been quite vibrant in terms of PP funding. Since 2022, there have been 172 PP deals aggregating $4.4BN+ across the aforementioned sectors
  • Fintech was the most active sector (117 deals totalling $2.9BN), followed by e-commerce/ marketplaces with $1.0BN from 28 deals
  • Venture debt is gaining traction amongst Mexico’s tech startups as securing VC equity funding is becoming more challenging as tech startups face valuation readjustment pressure due to growth concerns
• However, the M&A space in the aforementioned sectors remained relatively subdued, with just 33 M&A deals since 2022
  • The fintech space saw 15 deals, followed by logistics (13 deals), eCommerce/marketplaces (3 deals), and retail SaaS (2 deals)
  • Currently, Mexico’s fintech space seems very crowded with ~1000 firms. With rising competition, the space seems ripe for consolidation, as evidenced by recent deals done by key local firms (Kapital, albo, and Kushki) to augment their capabilities & market positioning

Other key themes covered in the report include:

• Nearshoring is driving investments in Mexico’s logistics sector as numerous US-based firms seek to expand their operations in the country through increased capital expenditure and acquisitions
• Cross-border e-commerce is flourishing in Mexico as consumers demonstrate a growing preference for foreign goods, particularly those originating from the US and China
• Gen AI is expected to advance further in the Mexican e-commerce sector, with more than 75% of Mexicans anticipating improvements in product recommendations, personalized customer support, and streamlined online purchasing experiences through this technology