Alta Ventures Mexico has raised more than $60 million for its debut venture capital fund targeting seed, venture and growth capital investments in US and Mexican companies, sources close to the firm said. The firm is targeting around $100 million for the fund, sources said.
The Monterrey, Mexico-based firm held a first close on the fund in February, attracting commitments from international finance organisations, Mexican fund-of-funds, and family offices in US and Mexico.
Alta, which is focusing on security, technology, consumer, communications and healthcare sectors, is looking to capitalise on recent market changes that firm co-founder Paul Ahlstrom said makes Mexico ripe for the venture market. The country has historically been one of the least penetrated venture and private equity markets, largely because of regulations.
“In any market where venture is created, the government has been an active partner at some level. You have to have them there to create the rules and the environment for venture capital … The [Mexican] government identified that they wanted the asset class getting involved, and pushed it,” Ahlstrom said.
Ahlstrom, who co-founded Mexican private equity firm Alta Growth Capital, said Mexico’s debt and equity markets have been underserved since hyperinflation devalued the peso in the early 1990s, causing bank failures and a deconstruction of private lending structures. The country’s recent regulatory adjustments, which created an opening for private equity and venture firms, created an opportunity to invest in an underserved Latin America market.
“We spent the first year doing nothing except tilling the ground and making sure the market could support the deal flow,” he said. “After the first year, we felt comfortable that the elements were there, the innovation capacity, entrepreneurship capacity, and that adding capital would be accepted.”