As part of CNBC’s recent flood of coverage detailing the booming economy and opportunity found in Mexico real estate, the respected news outlet also wrote about the growing venture capital scene in this emerging South American market.
“Mexico has a large, stable and growing economy, currently the 14th largest in the world and, according to Goldman Sachs, will be the fifth largest economy by 2050,” writes CNBC.
In fact, the nation’s super-solid macroeconomic base helped to make it one of only four countries in the world that have not only recovered, but also surpassed the ground lost during the global economic crisis of 2008 and 2009.
According to the MSCI Index, Mexico is also the fastest-growing country in the world, surpassing the U.S. Singapore and Sweden. Also of note,Mexico’s Ministry of the Economy revealed that 35 percent of the country’s Gross Domestic Product (GDP), along with 73 percent of its jobs, are created by fast-growing small and medium sized companies.
Mexico’s government and financial institutions have worked to attract venture capital funds to finance the country’s start-ups by establishing the Fund of Funds. This development fund is dedicated to promoting Mexico’s private equity and venture capital industry and is permitted to invest alongside other national and international venture capital funds to finance the country’s many small and medium sized companies.
The Mexican government also enacted a series of progressive reforms to the country’s stock exchange and pension fund regulator. This allowed the country’s pension funds to invest in private equity and venture capital funds. In addition, the government launched a $22 million seed fund to allow the Ministry of the Economy to invest with venture capital funds to provide capital to new businesses throughout the country.
“Mexican startups raised $469 million dollars in 25 projects in 2011 through these venture capital funds, compared to the $211 million dollars raised through 19 deals in 2010,” writes CNBC. “In 2012,t he Latin American Venture Capital Association estimates that venture capital firms will invest at least $1 billion in more than 30 deals.”