Mexico Tech Dealmaking: M&A & Funding Trends H1 2024

We are delighted to share our insights on Mexico’s fintech, ecommerce & online marketplaces, logistics, and retail SaaS sectors, with an aim of bolstering transparency and communication among market participants, as well as financial and strategic investors. Our report highlights the growth potential of the sectors and presents key disruptors within them. Furthermore, the report accentuates M&A and Private Placement (PP) deal activity in the sectors.

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