Mexico’s Silicon Valley defies the shadow of organized crime

Just two hours from where security forces clashed with gunmen from the feared Jalisco New Generation Cartel (CJNG) in an operation that culminated in the death of the last major Mexican drug lord, a thriving technology ecosystem is flourishing, fueled by software and electronics manufacturing startups with a high export volume. It reflects the contrasts that characterize Latin America’s second-largest economy, with great growth potential but shaken by the reality of crime.

Guadalajara is nicknamed the “Mexican Silicon Valley” due to the high concentration of electronics and IT companies based in the city, including multinationals like Intel, IBM, and Hewlett-Packard, which has given rise to a robust industrial and supply cluster. This is further enhanced by the large number of engineers graduating from its universities, the growth of startups in semiconductors and artificial intelligence (AI), as well as research centers and state policies aimed at attracting investment. These factors have transformed the capital of Jalisco into an innovation hub comparable — more symbolically than literally — to the Californian ecosystem.

The industry was not immune to the shockwaves made by the death of Nemesio Oseguera Cervantes, “El Mencho," on February 22, nor to the reaction of the CJNG cartel. Roadblocks, attacks on civilians and the closure of businesses, schools and tourist activities shook the country and paralyzed parts of western Mexico, especially Jalisco, the epicenter of the criminal group’s operations. However, investors and entrepreneurs in the tech sector say they are not intimidated.

“We are Latin Americans and we are used to living with a certain degree of misfortune. We are always prepared and vigilant,” says Luis Rubén Chávez, CEO of Yotepresto, a crowdfunding fintech company that has channeled some $330 million in loans in a decade of operation, speaking from Guadalajara. Although he describes the weekend’s events as a “major disruption,” given the high profile of the deceased, he notes that they were back in the office on Tuesday, once the local government lifted the alert. “Crime is just another variable in the scenarios, like being short-staffed in the office or having your car stolen. It’s part of the risks of doing business,” he summarizes.

Some 800 fintech companies operate in Mexico, a figure that has doubled in just three years, according to the annual survey by venture capital firm Finnovista. Most are based in Mexico City, followed by Guadalajara, a city an hour’s flight from the capital and just over two hours from San Francisco, CA, with good infrastructure and connectivity. There, investments seem to be bucking the national trend. While Mexico used foreign direct investment (FDI) in 2025 as a lifeline against global uncertainty, a disinvestment of $5 billion was recorded by the end of the year. Overall, the balance was positive, and the country attracted $40.8 billion in foreign capital last year, an increase of 10.8%. However, the performance in the fourth quarter raised concerns.

“We are actively seeking companies to invest in and have evaluated some in Guadalajara,” says Felipe Uribe of Corteza Capital, a family office that invests in Latin American startups in AI, finance, and cybersecurity, with Mexican companies in its portfolio. Their follow-on funding rounds typically start at $2 million. “Mexico is going through a complex process, although it’s not recent. During the previous administration, there were unfortunate moments of capitulation to criminal groups,” he adds.

The Colombian investor recalls that in his own country, drug trafficking and guerrilla warfare brought the state to its knees in the 1990s. Three decades later, Colombia boasts economic results that were unimaginable back then. “I’m very optimistic about Mexico in the long term: it’s a huge market, with enormous opportunities,” he says in a video call overlooking a South Florida beach.

It’s clear that organized crime costs the country investment opportunities. Extortion drives up the price of goods, and many business decisions are shelved due to the territorial control exerted by cartels like the CJNG, the Gulf Cartel, the Sinaloa Cartel, and the Northeast Cartel over agricultural, mining, and manufacturing areas. However, Guadalajara’s tech ecosystem partially defies this pattern. One voice in the sector privately sums it up: “It’s like a cancer that Mexico has suffered from for years. This was another outbreak. But it’s not going to kill it.”

Investors also argue that, in the current highly volatile environment marked by escalating trade wars and armed conflicts, fixed-income and equity investments have become comparable in opportunity cost to venture capital, traditionally considered riskier. “We are always looking for investment opportunities and are particularly focused on Mexico,” emphasizes Oriol Ros i Mas, partner at the Spanish venture capital fund Kalonia Venture Partners, which has Mexican startups in its portfolio. “It is one of the world’s greatest opportunities for financial inclusion through technology. That’s why we are unaffected by what happened over the weekend or any other unforeseen events,” he stresses.

Sign up for our weekly newsletter to get more English-language news coverage from EL PAÍS USA Edition