Eymard Arguello got fed up when the bottled-water truck kept failing to show up at his house in Puebla, Mexico. He decided to go into the business of purifying and bottling water for himself.
That was 14 years ago. Today Agua Inmaculada sells more than 100 million bottles of water a year through vending machines in 8,000 shops across Mexico and a dozen other Latin American countries.
Arguello is among a growing number of Mexican entrepreneurs bringing new services and products to market. Private and public programs help them gain the knowledge to run a business and attract investors.
A problem is that most still set their sights on small, local markets and create few jobs. Norma Alicia Hernández Perales, a professor of financial economics at Tecnológico de Monterrey, says 99 percent of Mexican businesses are small, medium-sized or micro-enterprises.
But efforts are building to help entrepreneurs come up with technology-enhanced business models that can be scaled up globally. The government created the National Institute of Entrepreneurship (INADEM) to seed ambitious ventures.
Endeavor Global, a New York–based nonprofit, seeks to find and nurture “the best high-impact entrepreneurs worldwide.” President Fernando Fabre sees exciting things happening in financial services, thanks to serial entrepreneurs such as Vicente Fenoll Algorta.
His Kubo Financiero, an internet marketplace connecting small borrowers with lenders at rates half of what a microfinance company would charge, has attracted $10 million in venture capital.
The biggest challenge was not raising money, Fenoll says, but “creating trust in the customers. They don’t see a [bank] building. It’s a website.”
Kubo Financiero has a very strict review process and turns down 92 percent of loan applicants. Its website has made 6,200 loans ranging from hundreds of dollars to $75,000 to individuals and small businesses. Just 3.5 percent have defaulted. Fenoll aims for a half-million customers within six years.
“Young people are coming into the entrepreneurship path like never before,” says venture capitalist Rogelio De los Santos, founder of INCmty, an entrepreneurship festival in Monterrey taking place during Global Entrepreneurship Week.
Mexico City, Monterrey and Guadalajara are hotbeds of entrepreneurial activity, but Puebla, Tijuana and Querétaro are in the hunt too, he says.
Meanwhile, Agua Inmaculada’s Arguello plans to display his low-cost machines at business fairs in China and Europe and is eyeing Africa. “We should be reaching everywhere in the world where they need purified water.”