Mexican start-ups at end of the queue for venture capital backers

Martín Meléndez, a Mexican video games developer, has a proven record and a project that he estimates will break even a month after it is launched. He needs to raise $500,000. Yet virtually no Mexican investors will touch him.

“When I pitch to venture capital firms or private investors, they say ‘the business plan looks strong, the idea is fantastic, but video games . . . I don’t know’,” says the 25-year-old entrepreneur. “They say, ‘if you get another investor, we’ll think about it’. No one wants to be the first. That’s been happening for over a year now.”

Yet raising money in Mexico ought not to be that difficult. Luis Robles, head of the Mexican Banking Association (ABM), said this year that the country’s banks had enough capital to boost their credit portfolios by a third: “In other words, we have unused installed capacity equivalent to $100bn.”

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