Héctor Sepúlveda is dedicated to investing in technology-based companies. He is the founder and managing partner of Mountain Nazca, a venture capital investment fund that has promoted businesses such as Kavak, Urbvan, Miroculus, Momentus Space, Heru or Jüsto, among others.
Its first investment bumps occurred between 2014 and 2016. And it did not always achieve the expected returns or achievements. In fact, over time he has learned that in this business you have to manage expectations well because 33% of funds worldwide lose money.
To bet on a particular business, Sepúlveda realized that what works in Silicon Valley may not work in Latin America, that understanding what works and what doesn’t in each market and context is essential to make a business grow.
Today, what the expert values in a venture is the size of the market and that the founders are hungry to grow. As with Kavak, founded by Carlos García Ottati, Loreanne García Ottati and Roger Laughlin.
Sepúlveda recalls that entrepreneurs were looking for a first round of investment of about $ 800,000. However, knowing the potential that this pre-owned car buying and selling venture had through an online platform, Mountain Nazca injected 3.2 million dollars to the now unicorn.
Since before the pandemic, there was already a growth trend in industries focused on technology, said the investor during the Private Capital Summit organized by the Mexican Association of Private Capital (Amexcap). But what happened after the coronavirus? What was going to happen in five years happened in one.
“Latin America has become a very interesting entrepreneurial scheme. As individuals we were forced to use technology to shop online and to maintain contact with people through the screen. Technology is changing and accelerating everything, ”added Nicolás Berman, partner of Kaszeck Ventures, a Venture Capital firm in Latin America, focused on the technology industry.
In Mexico, he pointed out, the business opportunities are many. Companies had to step on the accelerator of their digital transformation to continue with their operation. And industries that were born in the technological bosom were catapulted in less than a year.
Fernando Lelo de Larrea, founding partner of the Mexican fund ALLVP, assures that the investments injected into ventures will be greater than before, because global funds are eager not to miss any commercial opportunities. However, investors will increasingly seek more sophistication in entrepreneurs’ business models.
“If you want to monetize something, you have to leave a value on the table,” Sepúlveda mentions. Not only in terms of profitability, but in the use of new technologies such as blockchain, artificial intelligence and robotics.
In the opinion of specialists, more and more income will be put in sectors that have deficiencies, but that can be improved or solved with technology. The industries that have a promising future to invest in are the following:
Electronic commerce The Latin America Ecommerce 2020 e-commerce study (eMarketer) indicates that 10.8 million consumers made their first online purchase during 2020. Growth is expected to continue.
Healthtech . The health field is gaining ground, but in the form of wearable electronic devices and applications, developed with the help of big data and the internet of things. According to consultancy CBInsights, the first quarter of 2021 has seen 43 mega rounds of more than 100 million dollars for private health technology companies.
Foodtech . Transforming the agri-food industry into a more modern sector also comes with more force. The Global Food Tech Market Analysis & Forecast gives this sector a total value of more than 250,000 million dollars in 2022.
Edtech . In its E-learning Trends 2019 report, the Docebo learning platform revealed that the global online education market would grow 10% in the next three years, thanks to the use of technology in distance learning processes.
