More and more tech companies are seizing the commercial opportunities arising from Latin America’s new Silicon Valley.
Silicon Valley often tops the list when innovation and world-changing startups come to mind. California’s San Francisco Bay Area hosts numerous emerging and global tech companies. Many of the brightest minds and transformative businesses have their roots there. However, the United States is only one of many American tech hubs.
For several years now, Mexico has become a highly attractive market for the tech sector, thanks to its industrial hubs that produce engineering talent for the manufacturing and IT industries. In the early 2000s, the country introduced the PROSOFT program, aimed at fostering the development of its software and innovation industry. This initiative was designed to boost Mexico’s global competitiveness in the tech sector.
The plan paid off. Mexico emerged as the second-largest economy in Latin America. It also became the top source of foreign goods and services for the United States after the EU, holding a 15.2% share of U.S. imports, according to a report by Visual Capitalist. In doing so, it dethroned China from this privileged position. PwC predicts that by 2050, Mexico will rank as the world’s fifth-largest economy.
Latin America’s Silicon Valley?
Between 2020 and 2022, eight Mexican startups achieved unicorn status, reaching a market value of over one billion dollars. The year 2021 was particularly noteworthy for the country, with record-breaking figures in venture capital (VC) inflows. Mexico attracted a total of USD 3.8 billion in investments, showcasing the appeal and potential of its entrepreneurial ecosystem.
According to Statista data, venture capital funding in the country has grown by 560% over the past five years. This surge has paved the way for new companies like Sim Local, Tesla, and Vambe to enter the market.
Beyond investments and the potential of its entrepreneurs, Mexico has become the region’s top destination for startup expansion. According to data from Endeavor, an organization that supports entrepreneurs with the potential for economic and social impact, 145 founders across Latin America have chosen to base their businesses on the Mexican market.
According to Entrepreneur, a leading business publication, the highest concentration of startup innovation hubs is in Mexico City, Monterrey, and Guadalajara.
Business Opportunities
An increasing number of tech resellers, telecommunications companies, AV integrators, and data centers are looking to capitalize on Mexico’s market opportunities.
Data Centers
The Mexican Association of Data Centers (MEXDC) projects an annual growth rate of 9.37% in the sector between 2022 and 2027, solidifying Mexico as the second-largest market in Latin America. MEXDC anticipates that local revenues in this industry will reach USD 3.5 billion this year.
At Aerodoc, we’ve assisted numerous data centers in shipping equipment to countries with complex import procedures and streamlining deployments.
We act as intermediaries, ensuring compliance with each country’s customs requirements and securing the necessary licenses and permits. Companies can ship complex equipment such as servers, cables, and racks internationally. Our services sometimes extend to on-site installations by specialist technicians in the destination country, freeing clients from the burden of establishing or managing international subsidiaries.
Tech Resellers
At the same time, a 2023 KPMG Mexico study reveals that 76% of local companies plan to change their products and services over the next three years to stay competitive. Additionally, six out of ten are already undergoing digital transformation, adopting enterprise technology to achieve this goal.
At Aerodoc, we support tech resellers looking to capitalize on this growth. We offer different solutions, from repackaging shipments to meet each customer’s unique needs to consolidating shipments and handling complex pre-configuration tasks.
Sometimes, clients ask us to repackage a shipment to meet the specific needs of each delivery point. For instance, if they have centralized procurement for three or four locations across different parts of Mexico—or even in other countries—each location will be equipped with specific components we receive at Aerodoc.
The client sends us a pick list with instructions for configuring each location, and we manage the inventory, segregate the requests, and set up each location for subsequent delivery. Occasionally, we host specialists—such as technicians or project managers—responsible for site preparation. In these cases, we function as a consolidation center where the experts work on segregating shipments or even handling more complex configuration or pre-configuration tasks.
Challenges of the Mexican Market
Dan Zonnenschein, COO of Aerodoc, explains that successfully entering the Mexican market can be challenging due to its highly regulated nature. “When bringing technology into this region, several factors must be considered. While there aren’t significant customs limitations, Mexico enforces strict controls on the quality and safe equipment usage,” he notes.
Echoing Zonnenschein, Cecilia Sandoval, US Operation & IT Solution Team Leader at Aerodoc, explains that Mexico controls several key areas, including intellectual property, patent protection, and trademarks. She also highlighted that “a unique aspect of this market is the stringent labeling requirements for tech products, which must include specific details related to technical specifications,” a process that Aerodoc manages and reviews for our clients.
A critical point related to logistics in this country involves the security of local deliveries. “There are areas that are difficult to access due to infrastructure and geography, and others known as ‘red zones,’ where special precautions are needed to ensure the safety and integrity of shipments,” stated Aerodoc’s operations leader.
Another important aspect is the Mexican Official Standards (NOM), a mandatory technical regulation issued by relevant Mexican government agencies. These standards implement clear and detailed specifications to ensure quality, safety, efficiency, and environmental protection, among other factors.
Compliance with these standards is critical in the tech sector to maintain competitiveness and meet the market’s legal requirements when import to Mexico. At Aerodoc, we train our entire team to ensure our clients can enter the Mexican market seamlessly.
If you want to learn more about Importer of record services and more, contact our team of experts.
