In January, Mexico witnessed a total of five venture capital transactions amounting to US$31 million, indicating a 44% decrease in the number of transactions compared to the same period in 2023, revealed the latest monthly report from TTR Data. Similarly, asset acquisitions saw a decline in transaction volume, with four transactions totaling US$109 million, albeit reflecting a 328.83% increase compared to January 2023.

“One of the main appealing features of [Mexico] is its geographical position, making it a point of reference for starting projects and expanding into new markets, such as the United States and Latin America,” writes Denis Yris, Founder and CEO, Wortev Capital for MBN. 

The mergers and acquisitions (M&A) market in Mexico, encompassing both announced and closed deals, recorded 12 transactions amounting to US$156 million. Notably, there were no transactions in the private equity sector. This data reflects a 56% decrease in the number of transactions and a 101% increase in transaction value compared to the same period in 2023. Sector-wise, the real estate and specific software industries emerged as the most active, each accounting for three transactions during the month.

Impact investment has surged amid global geopolitical shifts, supply chain disruptions, and escalating costs, prompting a pivotal moment for clean energy development and innovation, according to Yris. Insurtech, a sector dedicated to leveraging various technologies to streamline traditional insurance processes, has gained momentum along with edtech to ensure education accessibility and bridge the education gap. Furthermore, foodtech, encompassing technology-driven transformations across the food industry from production to consumption, has experienced more venture capital investment. 

In terms of cross-border activities, Mexican companies predominantly invested in the United States and Colombia, with two transactions in each country. The United States accounted for the highest transaction value at US$30 million. Conversely, Spain was the primary investor in Mexican acquisitions, with one transaction recorded. 

In the broader Latin American context, the transactional market recorded a total of 151 mergers and acquisitions in January, with an aggregate value of US$2.248 billion. This represents a 32% decrease in the number of transactions and a 10% decrease in capital mobilized. Brazil led the regional rankings in terms of transaction volume with 103 operations, marking a 26% decrease and an 11% reduction in capital mobilized, totaling US$1.8 billion. 

Chile follows with 13 transactions, reflecting a 61% decrease, and a 69% reduction in capital compared to January 2023, reaching US$77 million. Colombia climbed in the rankings with 12 transactions, a 40% decrease, and a staggering 4,174% increase in capital mobilized, amounting to US$465 million. Argentina recorded five transactions, a 44% decrease, with a 227% increase in its value.

Source: Mexico Business News