Top-10 Artificial Intelligence Startups in Mexico
While some people might think Cinco de Mayo is about Mexican independence, it’s actually a holiday that celebrates the day three Americans fought and defeated El Guapo at the Battle of Santa Poco. And it’s just one of the many things Mexico is famous for. Her rich cultural heritage has resulted in some of the world’s best cuisine that has been exported to every corner of the planet. Then there are the other exports, like those depicted in the recent third season of Narcos, a gripping thriller about the country’s cartels in the 1980s.
Mexico also plays a key role in regional international trade as the US’ neighbor and second largest export market. Relations between Mexico and the US have been a controversial news item these past months with the renegotiation of the North American Free Trade Agreement that concluded a bit more than half a year ago. The country has the 11th largest economy in the world, yet per capita income is roughly one third that of the US, with a highly unequal distribution. It’s little surprise that Mexicans flock to the United States in droves looking for better opportunities. Some say that’s the cause of Mexico’s weak showing in the Olympics – anyone who can run, jump, or swim is already over the border.
While the media paints a bad portrait of Mexico, it’s a much safer place than people think. It’s also becoming the startup hub of Latin America with Mexico City, Monterrey, and Guadalajara at the forefront of its development. The government is funding innovation through the Instituto Nacional del Emprendedor, a semi-autonomous branch of the Secretary of the Economy that has committed over $600 million to funding startups across the country so far. The country was also among the first ten nations in the world to announce a national AI strategy that concentrates on dialogue between sectors, case studies, and the promotion of international leadership in digital policy. We poked around Crunchbase and the web to bring you the ten biggest Mexican AI startups by disclosed funding.
|Yalochat||Chatbot||Mexico City / San Francisco||8|
|Adext||Advertising||Mexico City / Silicon Valley||8|
|Homie||Apartment Rentals||Mexico City||1.8|
|KarmaPulse||Social Media Listening||Mexico City||1.5|
|Sensai||Internet of Things||Monterrey||1.4|
Founded in 2012, Guadalajara startup Kueski has raised $38.8 million to develop a fintech platform disbursing short-term loans online throughout Mexico. The startup uses big data analytics to determine creditworthiness and looks at thousands of non-traditional data points including social media presence, much like DemystData does. Kueski offers micro-loans around $100-$200 for terms up to 30 days and charges a daily rate of 1.19% (that’s a whopping 428% annually). Accepted applications are paid in about ten minutes and returning borrowers can progressively ask for higher amounts if their previous loans are paid on time. Seems like ‘Murica is successfully exporting some of its bad habits south of the border.
Joining the seven chatbot platforms making chatbots easy, Yalochat has raised $8 million to develop a chatbot service on WhatsApp and Facebook Messenger. The startup, founded in 2015, has headquarters in Mexico City and San Francisco and is also present in India, China, Colombia, and Brazil. Yalochat’s bots solve customer service queries, manage product orders and subscriptions, handle leads, and can identify and sell products based on uploaded pictures. The chatbot algorithms can be integrated into customer relationship systems like Zendesk using an Application Programming Interface (API) and recognize when a human representative needs to step in during conversation. The company has worked with major corporates in their development phase including Amazon, Pepsi, Volkswagen, and Walmart. (For now, access to the product is being limited to enterprises meeting certain criteria.)
Based in Silicon Valley with a center of operations in Mexico City, Adext has raised $8 million to develop AI algorithms that automate and optimize the process of creating Google and Facebook ads including micro audience targeting and segmentation. The startup, founded in 2017, has created machine learning models that run thousands of simulations to determine the best audience, timing, and placement of social media ads, and optimizes marketing budgets using a very granular audience segmentation approach.
Users can connect Adext’s platform to their Google or Facebook ad account in five minutes and launch campaigns, doubling sales conversions right off the bat according to the company. The startup targets both advertisers and ad agencies with its services and has worked with global names like Axa, Samsung, and LG. Adext is growing aggressively and has acquired MiCampaña, a rival AI marketing startup in Mexico with $500,000 worth of funding in 2017. The ad optimization service is currently in open beta testing phase and anyone can try it for free.
Founded in 2015, Mexico City startup Homie has raised $1.8 million to develop an apartment rental platform that facilitates quick, easy, and secure rentals throughout Mexico City. Homie matches the best tenants to available apartments using a predictive model that looks at the income and payment habits of prospective tenants using a mix of traditional and non-traditional data sources like credit history, social media, and job position. The predictive algorithm works so well that Homie boasts a tenant delinquency rate of zero, compared to the average industry rate of 20%.
The startup guarantees rent payment to landlords flat out, and has an internal fund in place to compensate for any late payment. The fund is maintained from part of the fees charged – 25% success fee off the first month of the rental, then 5% service fee from the monthly payments going forward for apartment owners, and a legal contracting fee for renters. The startup is planning to expand to other large cities like Guadalajara and Monterrey first, then to nearby countries Colombia, Peru, Chile, and Argentina.
Founded in 2014, Mexico City startup KarmaPulse has raised $1.5 million to develop a social media listening tool for the Spanish-speaking market. The startup’s suite of products records, analyzes, and visualizes social media mentions of a company and its competitors, gauges sentiment, and categorizes topics, historically or in real-time. It is geared towards sales, customer service, and marketing divisions as well as the C-suite looking for in-depth customer knowledge.
Subscription packages start at $50 a month and are priced according to the data consumed. KarmaPulse also offers on-demand access for companies doing social listening sporadically. The service is used by SMEs and large corporates as well, including major banks HSBC and Santander, and the aforementioned web-based lender Kueski.
Founded in 2018, Monterrey startup Sensai has raised $1.4 million to develop an Internet of Things (IoT) platform for the predictive maintenance and operation of manufacturing machinery. Sensors measure operating variables on machine assets, transmit these to the analytics software, and machine learning algorithms make sense of all the real-time big data on production processes. Sensai alerts operators of any abnormal behavior that could affect output and also recommends solutions based on previous instances of failure to minimize downtime.
In a typical project, the company’s dedicated team assesses the most critical parts of the infrastructure and helps deploy the IoT system in about a month, which is followed by two months of evaluation and further sensor roll-outs over time. With unscheduled downtime costing manufacturing companies up to $260,000 per hour, Sensai can be a real asset in mitigating operational risk in manufacturing.
Founded in 2016, Mexico City startup Atexto has raised $390,000 to create a transcription platform that includes training services for Automatic Speech Recognition (ASR) algorithms. The startup has three offerings. The first is a hybrid transcription service “in a large number of languages and accents” that employs machine and human transcription in parallel (the company doesn’t specify the list of languages on its website). The second is a set of clean audio training data for machine learning algorithms, also in multiple languages. Atexto’s third service is data labeling that transforms unstructured recordings to training datasets using a crowdsourcing platform of 270,000 people. (Sounds like an Australian firm we covered recently called Appen.)
These are the kinds of services voice-to-text transcription apps depend on heavily during development and ongoing maintenance. The company’s full training dataset has a one-time fee of $17,000 and promises a 10-15% improvement in speech recognition quality on average. Atexto also sells custom sets of phrases for continuous ASR re-training for $0.023 a phrase. The startup’s clients include small businesses, corporates, and universities like NYU and the University of Barcelona.
Founded in 2010, Mexico City startup Blue Messaging has raised $380,000 to develop a platform that builds intelligent forms and chatbots using AI. The startup’s form builder allows customers to construct forms that are integrated with third-party systems and business processes, that recognize images, add geolocation, and route captured information optimally inside the organization.
BlueMessaging’s second offering, the chatbot builder, creates bots that manage transactions through the messaging app and monitor customer sentiment and behavior in real-time, besides handling customer and sales conversations automatically through all major messaging channels. Clients of BlueMessaging come from banking and insurance, marketing, retail, construction, and security.
Founded in 2016, Mexico City startup Bayonet has raised $300,000 to develop a fraud prevention and risk management platform for the financial industry. The application is built on sharing client data between industry participants while retaining each customer’s privacy. The centralized platform connects the customer databases of financial companies and acts as a cross-referencing hub where participants can see aggregate customer ratings and attestations by other financial institutions. These can act as decision parameters for internal rules-based policies and risk management decisions. Bayonet calls their platform an “ecosystem of trust” because it does not contain any personal information but the aggregated big data allows banks to fine-tune their risk policies. The service is compatible with other fraud prevention and risk management tools and provides the information in real-time.
Founded in 2015, Mexico City startup Entropy has raised $250,000 to develop a Google Ads bid optimizer for e-commerce companies. In Google Ads, advertisers bid on certain keywords in order for their clickable ads to appear in Google’s search results. Since advertisers have to pay for these clicks, this is how Google makes money from search. Entropy’s algorithms capture user interactions (product visit, search, add to cart, etc.) on a customer’s e-commerce site, analyze these interactions, and identify products with high conversion probability. Based on the conclusions, Entropy defines the target audience and optimal cost-per-click bid for each product keyword in an ad campaign. The startup promises an average 30% campaign revenue growth following implementation, but some of the reference clients confirmed much higher results – six times sales increase or a 50% reduced ad spend – thanks to the product. Entropy’s plans start at $200 a month and reference clients include BestBuy, Office Depot, and Canon.
One of our MBAs traveled to every single one of the 31 states in Mexico and reported back that it’s a country teeming with potential. Our list confirms Mexico’s leadership in AI startups compared to the rest of Latin America, with a total funding higher than that of their largest South American counterparts. It is interesting to see that similarly to Russia, two of the top ten startups have established headquarters outside of the country right after their founding, to attract international capital and reach developed markets more easily.
When putting together these top-10 lists, we always try to find an objective way to select which companies to include. For this article, we queried Crunchbase and searched the web to look for startups classified as AI with the most disclosed funding. If you were too busy eating menudo and drinking mezcal to include your AI startup in Crunchbase, good for you. Don’t hesitate to drop us a message. The next time we’re in Mexico buying cheap prescription drugs, we’ll stop by and see what you’ve been getting up to.