Editors’ Picks: Top Five Emerging Software Firms of Nuevo Leon, Mexico

Directly bordering the United States, the northern Mexican state of Nuevo Leon is home to scores of successful software startups that offer solutions to clients in the US, Latin America and beyond. With a strong American working culture, a high proportion of bilingual workers and strong government support for the sector, the state is a prime nearshore destination.

Most local startups and many leading Latin American IT companies are headquartered in the state capital Monterrey. Mexico’s business capital, the city is home to over 400 IT companies that employ more than 11,000 professionals. It is also blessed with a steady stream of talent, with over 1,500 new IT students graduating every year from first-rate universities such as the prestigious Tec de Monterrey.

As Monterrey continues toward a brighter future, Nearshore Americas spoke to five of the most successful and most promising software startups in Nuevo Leon about their offerings, clients, plans for growth and what differentiates them from the competition.

Inflection Point Systems

Founded in 2003, Inflection Point Systems is a software con
sulting and product development firm with a range of high-profile US clients across different sectors such as finance, technology and the hotel industry. It specializes in digital marketing solutions, mobile applications, security solutions and application development.

“We offer tailored software development services and specialize in three areas: online and digital marketing; mobile solutions for iPhone, iPad, Android etc; and finally in physical security for office buildings and metropolitan areas,” Inflection Point CEO Carlos Montemayor told Nearshore Americas.

“The vast majority of our clients are in the US. We have a few in Mexico, but 90 to 95 percent are in the US,” Montemayor said. Some of the firm’s biggest clients include Cisco; MFS Investment Management; VidSys, a physical security firm; and Intelity, which provides mobile solutions for hotels.

Inflection Point has 83 employees and last year made around US$5 million in sales. “Our aims for this year are growth of 30 to 50 percent in terms of personnel and sales. We want to expand in a sustainable manner; we don’t want to grow too quickly or affect the level of quality we offer,” Montemayor said.

Inflection Point’s corporate culture is what most differentiates it from other software startups in the Monterrey area, Montemayor added. “I come from an engineering background and I worked for many years in Silicon Valley, so I brought a bit of the culture from Silicon Valley to Monterrey. It’s a very relaxed but respectful atmosphere. People are very happy working for us because we’re not a hierarchical company,” he explained. “We’ve been ranked in the top ten in Mexico by the Great Place to Work Institute for three years now and we hope that 2014 is not an exception.”

Naranya

Naranya is a new media company focused on the Latin American market for mobile entertainment, advertising, commerce and publishing.

“We offer a product development service for mobile platforms … we also have a store for apps for mobile devices … and aside from this, we offer a Paypal-style payment platform so that people can pay for apps through the account they have with their mobile phone operator,” Naranya founder and CEO Arturo Galvan told Nearshore Americas.

“In Mexico, and in Latin America in general, only a minority of people own credit cards. If they want to buy something in Google Play or Apple Store they can’t because they don’t have a credit card. So we developed a payment platform so that people can buy things in these stores,” he explained.

Founded in Monterrey in 2002, Naranya now has 300 employees. Sales total “several dozens of million dollars,” Galvan says, and the aim is “to maintain our 40% growth rate.” Naranya’s partners include telephone carriers such as America Movil, Movistar Isuacell and Tigo, while its clients are the final consumers, the smartphone users themselves. The company has no presence in the United States because it is focused on creating a mobile ecosystem in Latin America, where it operates in nine countries, including Mexico, Brazil, Argentina, Colombia, Chile, Ecuador and Peru.

“Apple and Google are very successful ecosystems but they’re very much designed for developed markets and not so much for emerging markets,” Galvan explained. “So to create this ecosystem we’re developing platforms for payment and sales, but we also have a side-project called Naranya Ventures, which includes a startup accelerator called Naranya Labs, a seed capital investment fund called Naranya Innovation Fund, and a unit called Naranya Knowledge which organizes conferences, seminars, diplomas and masters programs in diverse institutions in order to develop the understanding of the digital ecosystem among both entrepreneurs and investors in Latin America.

“What makes Naranya different from other tech companies here in Monterrey is that we create products and platforms. That’s the difference between us and companies like Sofftek or Neoris, which are services providers,” Galvan said. “Our products enable the development of new products around our platforms. Many startups don’t get off the ground because they lack the capacity to distribute their apps. So we want our platforms to generate more and more startups.

“Naranya’s focus makes us very different in the market because Monterrey has concentrated very much on the development of software as a service, but not so much on products, and I think there’s now a growing tendency to concentrate on the latter.”

Diverza

Formally founded in 2003, Diverza is a Monterrey-based firm dedicated to electronic factoring (e-factoring) solutions. “We have 110 direct employees and 60 to 70 indirect staff,” Jose Luis Ayala, Diverza’s founder and director general, told Nearshore Americas. The indirect staff work at 22 offices across Mexico that operate as franchises that replicate the Diverza model, Ayala explained. Diverza’s focus is on “developing solutions for business performance using e-signature technology” in order to “make the sales process more efficient,” he added.

“We’re the biggest participant in the national e-factoring market … Today we have close to 160,000 users of all four of the solutions we’ve developed,” Ayala said. Diverza’s biggest clients include Cemex, the world’s largest building materials suppliers and cement producers; Mexican media outlets Milenio and Grupo Reforma; Mexico’s ubiquitous Oxxo convenience stores; Mexico’s Liverpool department stores; and the Mexican subsidiaries of major US corporations such as Best Buy and Apple Mexico.

With annual sales of around US$10 million, Diverza is still a small business by Mexican classification standards, Ayala said, but the aim for 2014 is to achieve market penetration of 250,000 users and establish a physical presence in 48 cities across Mexico.

“At the moment we’re focused exclusively on Mexico but we do have plans to expand because the technological model for e-signatures in Mexico is beginning to be considered an example that other countries in Latin America will follow,” Ayala added. Diverza is exploring options in Costa Rica, Colombia and Chile, from which it could respectively serve Central America, the northern part of South America, and the southern cone, he explained.

While Diverza’s business model differs little from the 77 other companies authorized to provide e-factoring solutions in Mexico, Ayala said that Diverza’s “humanist” working culture differentiates it from the competition: “We have a similar kind of cultural to Google or Facebook, etc. We have open spaces, flexible work options, we provide meals here for our personnel and we organize physical activities.”

Proceti IT Services

Founded in 2007, Proceti IT Services  provides tailored software development for many large and high-profile US and Mexican clients, Account Manager Mario Espinoza Rivera told Nearshore Americas. Proceti has approximately 50 employees and created web, mobile and desktop applications. “In mobile development we work in both Android and iOS,” Espinoza said. “Our clients generally have very specific needs for their businesses,” he added, although “hardly anyone asks for desktops apps anymore.” Aside from producing apps, Proceti will also spend a certain number of hours per month on application maintenance and support to meet its clients’ changing requirements.

Proceti’s clients are “50 percent in Mexico and 50 percent in the US,” and “we often provide services for our American clients through their Mexican subsidiaries,” Espinoza explained. The company’s biggest clients include General Electric, Nidec Motor Corporation, Kansas City Southern, Cemex and Mexican banks Banorte, BanRegio and Banco Famsa. Proceti is currently developing a strategy to target the US and specifically the Texas market due to its geographic proximity to Nuevo Leon, Espinoza added.

Asked what differentiates Proceti from the competition, Espinoza cited the company’s methodology. “One characteristic of our methodology is that everything is formalized,” he said. “All our agreements are very formal – everything we do with our clients is documented. This gives our clients greater security. They have everything on paper – none of our commitments are up in the air. This differentiates us from many other businesses that do not always fulfill their promises.”

Captiva Tecnologia Digital

Formally founded in Monterrey in 2009, Captiva Tecnologia Digital is an up-and-coming software developer focused on three main areas: web development, its strongest offering; mobile development; and Software as a Service, its newest offering. The firm is comprised of just 12 people, Captiva co-founder and CEO Andres Amaya Diaz told Nearshore Americas.

Captiva creates games, websites and apps for numerous Mexican businesses, and provides administrative and logistics systems for one of its biggest clients, transport firm Auto Lineas Regiomontanas, which operates in Mexico and on the US side of the border. It also provides software solutions for e-factoring firm FacturaSoft and has worked with a videogame developer in Austin, Texas. “We also have agreements with businesses in Europe, such as Aner in Spain. We commercialize their products here in Mexico and sometimes we share development,” Amaya said. In order to expand more in Mexico and abroad, “We plan to really focus in Software as a Service and mobile development. These are the two areas where we want to be strongest,” Amaya added.