Category: Magma Events

Magma Summit 2019: Mexico City

Our Magma Summit last week was a success! Mexico City welcomed everyone with open arms, lots of rain, and a festive spirit just in time for Dia de Los Muertos.

As we’ve expanded from only investing in Chile in 2014 to supporting a regional portfolio of 65 startups based in 12 countries, we wanted to recreate the support network startups, LPs and team members that spent time in our Chile office have. We’re building a distributed community across Latin America, the US, and Asia, which means in-person time is even more important.

Nathan Lustig kicks off the event by announcing Magma Fund III.

Day 1 – Kick-off at Terraza Timberland

The Magma Team at Terraza Timberland before the guests arrived.

We kicked off the Summit with tacos and drinks at the Timberland Terrace, overlooking Mexico City’s Plaza de la Republica. Although the rain threatened to keep us off the beautiful rooftop, we were able to bond over dozens of tacos al pastor and a bit of mezcal before the business started on Tuesday morning. 

Day 2 – How to Get Acquired, Get in the News, and Attract Investors

Our first presenter was a Magma Partners investor and executive coach, who explained lessons learned from his experience working with large banks and technology companies to make sure founders don’t turn their potential unicorn into a donkey. Key takeaways: 

  1. Ensure that back-end software can integrate with potential acquirers
  2. Don’t assume that customer acquisition costs will stay the same as you scale
  3. Make sure your books are clean
Anna Escher and Sophia Wood discuss getting covered in the press.

On the next panel, TechCrunch’s Anna Escher and LatAm List & Magma team member Sophia Wood discussed how to get covered in the press in the US and Latin America. Our main takeaways: 

  1. Journalists are people too.
  2. Try to make the connection as organically as possible, whether via your investor or through a warm intro.
  3. Almost everyone wants an exclusive take on the story.

To round out the morning, Nathan Lustig interviewed two of our LPs about what made them so interested in investing in Latin America, besides the upside. Both investors made heavy emphasis on the potential to solve real problems in the region, such as banking, payments, and insurance, as well as the strength of tech teams that are being overlooked by competition in Silicon Valley.

After a hearty lunch, we enjoyed an afternoon of small group discussions about what we’ve learned over the past year, especially focusing on how we face failure. These conversations, moderated by Nathan and Pedro, allowed us to connect more deeply and open communications about topics that are often challenging and very personal for entrepreneurs. 

Francisco Saenz shows his skills in Petanca.

We ended the first night at Petanca, where we played a tournament of the local Mexican sport while enjoying local tortas and beers, sponsored by AWS. As almost everyone in the room was an entrepreneur, the game got a bit competitive, but it was all in good fun! 

Day 3 – How Magma Companies Are Solving Latin American Finance and Raising Capital in the US & LatAm + China’s Influence in the Region

Sebastian Castro explains what’s wrong with payments in LatAm.

Our second morning started with a lively discussion between Nathan and Sebastian Castro, co-founder of Kushki Pagos, an end-to-end payment system that is helping Latin America process payments online. While Latin America is one of the fastest-growing regions in the world for e-commerce, online payments are still clunky, slow, and inaccurate, which is bad for business. Sebastian explained how Kushki quickly integrates with companies and banks to allow them to accept online payments and boost their business. 

From left to right: Anna Escher, Lina Peña, Alejandro Guizar, and Diego Caicedo discuss what it takes to raise a Series A in Latin America.

In the second panel of the day, TechCrunch’s Anna Escher moderated a conversation between Diego Caicedo, CEO of OmniBnk, Alejandro Guizar, CEO of Billpocket, and Lina Peña, investor at Elevar Equity about How to Raise a Series A in Latin America. Many companies in Latin America are struggling to bridge the gap between early-stage investment and growth-stage deals. Diego and Alejandro have recently raised Series A funding from investors in the US and Latin America and explained what it takes to scale, and to explain to investors how they will scale in Latin America. Lina provided the investor’s perspective, highlighting benchmarks that she looks for in Latin American startups, as well as companies in India, where Elevar invests in fintech.

Sophia Wood asks Juliana Villalba and Pedro Goes about their experience in the US.

Next, we heard from Rebus’ Juliana Villalba, Inevent’s Pedro Goes, UBits’ Julian Melo, and MiPos’ Orlando Espinoza about their experience in accelerator programs in the US including Quake in New York and Y Combinator in San Francisco. This light-hearted panel discussed misunderstandings between Latin American entrepreneurs and their US investors and clients. Takeaways:

  • LatAm founders need to learn to be more succinct in their pitching.
  • Talk to other Latin American entrepreneurs who have already participated in the program – use your network!
  • Learn what makes US investors tick, and focus on that part of your business during meetings.
Nathan Lustig discusses Latin American banking with JT Li.
Jie Hao explains how China became a global tech leader.

Our final discussion of the morning revolved around China’s influence in Latin America as explained by Magma’s Jiating “JT” Li and Jie Hao. JT moved to Chile two years ago to work for Magma and still cannot open a bank account, an experience that felt the polar opposite of her cashless life in China. Takeaways: Latin American banks are bureaucratic and charge people to keep, transfer, or spend their money. This business model is ripe for disruption.

Meanwhile, Jie explained how China developed from a poor country into one of the wealthiest and most technologically advanced in fifty years, with lessons for Latin America to draw from along the way. Our takeaway: educating and attracting talent is key to innovation.

Our beautiful event space for the two-day summit.

After lunch, we enjoyed a speed dating session where our investors and entrepreneurs could interact in small groups and connect personally. These sessions allowed us all to meet 5-6 new people in a more personal and natural setting to generate discussion and networking opportunities. 

We closed our final night with dinner and drinks. The atmosphere was bubbly and excited about new opportunities that our discussions had brought to light! 

Over the next few days, we spent time with entrepreneurs and investors working and seeing the sights in and around Mexico City. Magma Summit was the first time our entire team was all together in the same room at the same time, and it was the first time that many entrepreneurs had met each other, even if they were from the same city. We’re excited about what we’re building together with the entrepreneurs we support, our LPs, and the people who are supporting Latin American entrepreneurs!

The Magma team and supporters enjoy the Teotihuacan pyramids after the event.

Nathan Lustig’s overview of the Latin American ecosystem on Parallel18’s ‘Mentored’ Series

Parallel18 is a government-backed accelerator program founded by Sebastian Vidal to help promote entrepreneurship in Puerto Rico. The program seeks to turn the island into an international hub for tech innovation, and has received applications from startups from more than 48 different countries.

‘Mentored’ is an educational program for Latin American entrepreneurs, where Parallel18 visiting mentors share their knowledge, experiences, and advice.

Our Managing Partner, Nathan Lustig, recently presented on Parallel18’s ‘Mentored’ series to talk about Latin America’s ecosystem. Here’s what to expect from this episode:

  • Hype in LatIn America: Why many venture capital firms are investing in the region
  • An overview of some of the biggest deals in Latin America (Rappi, Nubank, Cornershop, Softbank)
  • How Latin American entrepreneurs have improved
  • China and US investors: Approaching deals in Latin America
  • An overview of Nathan’s podcast, Crossing Borders
  • Advice for entrepreneurs thinking about what business they want to start
  • Books and thought leaders Nathan recommends

Check out the video above for the full episode to hear Nathan’s take on why Latin America’s ecosystem is at an inflection point!  

Magma Partners’ Q1 2019 Update

The Magma Team together in the office in February 2018.

After an active 2018, we’ve continued to push forward in 2019. Since our last update, we’ve invested in 4 new companies from four different countries, including Base Operations. We’ve also continued to expand our team and the services that we’re helping to provide in the Latin American ecosystem.

We now support 51 companies in our portfolio, which now sell $29M+ each year, have raised $46M in follow-on funding, and employ more than 600 people worldwide. Our growing team provides diverse experiences and networks to our portfolio, including support in marketing, PR, DevOps, sales, and international expansion strategies and covers geographies like Chile, USA, Mexico, Colombia and China. We’re excited to further support the startups in our portfolio as they continue grow!

Check out the following overview of news from our fund and our portfolio for Q1 2019.

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Nathan Lustig’s advice for startups on Parallel18’s “Mentored” Series

Our Managing Partner, Nathan Lustig, recently appeared on Parallel 18’s “Mentored” Series to provide tips and advice to startups and VCs operating in the Latin American ecosystem. Here’s what to expect from the episode:

  • What VCs look for when they are analyzing Latin American startups
  • How startups and VCs in Latin America can align incentives for better outcomes
  • How US and Chinese investors analyze companies in LatAm
  • Tips for Latin American startups looking to raise capital outside the region
  • Why Puerto Rico is a great place to start a startup

To hear all of Nathan’s advice for startups and VCs, check out the video above for the full episode!  

What can startups and traditional businesses learn from each other?

What do startups and corporations need to know about each other? Our Managing Partner, Nathan Lustig, was recently in Mexico City for the 29th Annual Consejo Empresarial de America Latina (CEAL) to talk about just that issue. The event united business people, investors, entrepreneurs, and politicians to talk about how to support tech, innovation, and business across Latin America, from Mexico to Chile.

Distinguished guests included Mexico’s President-Elect, Andres Manuel Lopez Obrador, exiled Venezuelan politician, Antonio Ledezma, and Ex-President of Colombia, Oscar Naranjo. These presenters spoke of regional alliances and improved international ties, including with China, to help support Latin America’s budding ecosystem. There is a clear, and well-recognized need, for governments and corporations to lend their support to the private investors and actors in the tech ecosystem.

“Big corporations in Latin America are beginning to feel the threat from startups and are looking to partner, support, and innovate alongside smaller tech companies. For example, in retail, we have seen a spate of acquisitions – such as Walmart and Cornershop, and Falabella and Linio – that point to the fact that corporations are seeing startups as potential collaborators and competitors,” said our Managing Partner, Nathan Lustig. “This change is an opportunity for startups and corporations alike to learn from each other and improve services for their customers.”

Several Magma portfolio companies had the opportunity to present at the event, including Omnibank (previously Portal Finance), Workep, BrainHi, and Albo. These startups were among 25 companies chosen from across Latin America to present for the politicians, executives, and angel investors who attended the event.

Diego Caicedo, CEO of Omnibank, said of the event:

“We work with a lot of traditional businesses, like investment banks, who are just beginning to see opportunities in working with startups. This event was an opportunity for us to meet some of the most important actors in Latin America’s private sector and understand how we could work together.”

Nathan was invited to speak on the Venture Capital panel at the event alongside other regional VCs like Federico Antoni of ALL VP, Sebastian Vidal of Parallel18, and Hector Sepulveda of Mountain Nazca. The panel was moderated by Nicolas Kogan, Puerto Rico’s CEAL president.

“Startups can learn a lot from traditional business-people – and vice versa. This event allows startups and founders to interact with major players in their industry and learn from their experience, and for traditional business owners to explore potential partnerships with people who are innovating in their industry. It is a great place for fostering collaboration,” said Nicolas Kogan about the CEAL event.

We were thrilled and honored to be invited to present at the event, and to be able to support our companies that were able to join, as well. CEAL was an incredible way to bring together all the biggest actors in Latin American business, from politicians to first-time founders, and discuss the future of the region.

Nathan Lustig presents at the Peru Venture Capital Conference

Last month, Nathan Lustig gave a talk at the Peru Venture Capital Conference about the Latin American entrepreneurial ecosystem and how Magma is working to support startups in the region. In this talk, he shared how he started Magma Partners in 2014 and how it has progressed so far.

We believe that Latin America is at its inflection point. In the past few years, more US and European entrepreneurs have come to Latin America to develop their startups. At the same time, he has witnessed an emergence of Latin American founders that are striving for their ambitions.

Yet the infrastructure for entrepreneurship in Latin America is not yet fully developed. Magma has been working hard to push the ecosystem forward with entrepreneur-friendly deals, that try to break down invisible barriers of class, gender, and race that still exist in this region.

Magma has recently started to build more pillars for the ecosystem by creating partnerships and content that support the region. Noting the growing influence of China in Latin America, Magma and their Chinese partner, 36Kr, launched the first Sino-Latin American accelerator in the world. Nathan produces a podcast called Crossing Borders where he interviews Latin American entrepreneurs who have interesting stories that rarely reach an English-speaking audience. Magma also created LatAm List, a Latin American TechCrunch that shares regional startup news in English.

To view the whole talk please click here.

 

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