Start-up accelerator 500 Startups will expand its reach after acquiring Latin American accelerator Mexican.VC, but a local expert says it could be a while before something similar happens in Australia.
500 Startups, based in California, was founded in 2010 by Dave McClure. It invests primarily in consumer and SME internet start-ups, and related web infrastructure services.
In addition to being an early investor in Wildfire Interactive, which was recently acquired by Google, 500 Startups has invested in the likes of Twilio, SendGrid, TaskRabbit and Zencoder.
It has also been an active investor in the Latin American market, with investments in Mexican companies Wowzer, Yogome and Fontacto.
Company spokesperson Christine Tsai said 500 Startups is “thrilled” to announce the acquisition of start-up accelerator Mexican.VC, which will help 500 Startups fund and launch more start-ups in Latin America.
According to Tsai, the founding partners of Mexican.VC – César Salazar and Santiago Zavala – will be joining 500 Startups as venture partners in Mexico.
“The most exciting growth opportunities are coming from web, mobile and internet start-ups in emerging markets,” Tsai said in a company blog post.
“In particular, we are enthusiastic about the state of Mexican entrepreneurship and the country’s growing trillion dollar economy.”
“Mexico is the 12th largest economy in the world. At 3.9%, it’s growing faster than Brazil and, unlike the US, has had a manageable debt for more than a decade.”
“In terms of online penetration, Mexico has the fifth largest Facebook user base and the seventh largest Twitter user base in the world.”
Tsai said while the investment criteria for Mexican.VC will remain the same, Salazar and Zavala will be able to “fully leverage the entire 500 Startups network and knowledge base”.
Mick Liubinskas, co-founder of Australian start-up incubator Pollenizer, says the acquisition is “really interesting to see”.
“Over the last two years, there has been massive growth in accelerators and incubators – companies that make companies,” he says.
“It’s interesting to see [an accelerator acquisition] happen so fast, but Dave McClure is a really smart guy.”
Pollenizer says the acquisition suggests 500 Startups could expand on a global scale, which is good news for Australian start-ups.
“Everyone in the US knows Australian start-ups are massively undervalued,” he says.
“500 Startups appears to be expanding internationally as the world gets flatter, which is very exciting to see.”
But Liubinskas says it remains to be seen whether an Australian accelerator would consider acquiring another local accelerator.
“In Australia, it would seem really early because we’re just building the momentum now. But we all get along really well and it may well happen,” he says.