Next Silicon Valleys of Latin America

At the heart of Mexico’s second-largest metropolitan area, Monterrey, is known for industry. Its state, Nuevo León, generates 8% of the country’s gross domestic product and is one of its top exporters. A six-hour drive from Austin, Texas, and just a few hours from the U.S. border, Monterrey shares cultural traits with its northern neighbor. For decades it has been an entrepreneurial heartland and the origin of some of Mexico’s biggest companies. It’s also host to international companies like Coca-Cola and Heineken, along with having highly developed beverage, cement, steel and transportation industries. Now, that environment — rich with innovation, hard work and cash — is also cultivating a booming tech sector.

Global giants like Amazon, Honeywell, Lenovo and Microsoft are arriving in Monterrey’s metropolitan area. Incubators like Impact Hub and international networks like Startup Grind have opened chapters in Monterrey. The city also hosts world-class events like Startup Weekend, Angel Hack and Space Apps Challenge. While Monterrey trails Mexico City — where most startups are born and based — as a hub, there’s a decentralization underway in the tech sector. Monterrey stands out as a beneficiary, said Pablo Lascurain, Director of Startup Grind LATAM, an international startup community. “No other city in Latin America has that closeness with the U.S. that Monterrey has,” he said.

It isn’t just a gift of geography, though. The city’s entrepreneurial ethos also works to its advantage, said Lascurain. Monterrey is partnering its industrial nature with tech entrepreneurship in the fields of logistics, manufacturing, the digital marketplace and web-based software, he said. Monterrey now also has access to funding that Guadalajara, coined “Mexico’s Silicon Valley” for years, does not. “Guadalajara’s model broke because they don’t import communities of angel investors, large Mexican companies [to invest in startups], and sources of funding,” said Lascurain. Monterrey on the other hand is home to Alta Ventures Mexico, an early stage venture capital fund, and startups that have received funding from Y Combinator.

Or do we mean coding? Out of the 76 Mexican startups that have acquired funding from Y Combinator since 2015, as many as 19 are from Monterrey. Startups like Nowports, Orchata, Parrot and Pide Directo are some of the recent enterprises putting the city on the map. Guadalajara is still an important tech hub, with four major universities and the presence of companies like Dell, HP, IBM, Intel and Oracle. However, Monterrey is creating an ecosystem that, according to Lascurain, Guadalajara didn’t quite succeed in doing.

The Colombian city rises from the Aburrá Valley and has the climate and culture to match — and, locals would argue, beat — Silicon Valley itself. Like other aspiring regional tech hubs, Medellín is receiving support from the government, which wants to turn it into the “Valley of Software.” At the heart of those efforts is Ruta N, an incubator that also helps startups and investors network. On that note, Crunchbase lists 438 startups in Medellín, a number that has doubled in the last year. Additionally, Palo Alto-headquartered AI Fund has set up a hub here.

The city has yet to produce a unicorn (a startup valued at over $1 billion), but it is emerging as an attractive place to innovate — and not just in conventional ways. Federico Restrepo, co-founder and co-director of Impact Hub Medellín, a network of locally-founded incubators, accelerators, coworking spaces and nonprofits, hopes his city doesn’t become a carbon copy of Silicon Valley. Instead, he wants the city to foster sustainability. “Medellín has a strategic location between two oceans, is in one of the most biodiverse countries in the world, and is the connection between North and South America,” said Restrepo.

To those unfamiliar with Medellín, the city can conjure images of Pablo Escobar and violent drug cartels. But the reality of Medellín is far removed from those blemishes. The city has re-emerged to create more vibrant cultural, social, and tech scenes, said Restrepo. Impact Hub Medellín would also like to see more socially-conscious projects that focus on conservation and sustainability in health, the environment and agriculture. “As long as Medellín recognizes its economic and social advantages, it will become a Silicon Valley in its own right,” he said.

on The Carlos Watson Show!

Brazil, Latin America’s largest market, has multiple tech hubs that have succeeded in fostering talent and creating innovative solutions. There’s São Paulo of course, but also Belo Horizonte, Salvador and Porto Alegre. And then there are others that are lesser known globally but are emerging rapidly. Chief among them is Curitiba, a city of 2 million people in southern Brazil that is home to EBANX, MadeiraMadeira and Olist — three of Brazil’s more than 20 unicorns. Curitiba’s local government is supporting its mission through a project called Vale do Pinhão, a hub for innovation in the areas of technology, education and finance.

It’s the capital of Santa Catarina state, a major player in Brazil’s economy, a lot like Nuevo León in Mexico. With famous beaches and lagoons popular for windsurfing, it has what it takes to draw talent. It also has a thriving coworking scene and is home to several innovation centers and tech parks, such as Alfa and Sapiens Parque. Beyond that, Florianópolis is the home of the RD Summit, a major networking event for people in the sector.

The city of Recife in northeastern Brazil has Porto Digital, an initiative that was launched in 2000 by a public university, the city’s local government, and entrepreneurs. Since then, Porto Digital has become part of a government policy that grants tax breaks to technology companies that establish themselves in downtown Recife. There are now 350 such companies.

Do you know of a tech hub quietly designing the future in some overlooked region? Tell us about it!

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