Technology Sector in Mexico in 2025

The technology development of Mexico has been nothing short of stunning–its IT market value grew from $11.6 billion in 2020 to $17.3 billion in 2023. In 2024, the capital, Mexico City, became the #1 market for digital talent in LATAM. With 90% of tech leaders struggling while recruiting and retaining talent, such rapid development of technology from Mexico is a silver lining. 

I’m David Gomez, Alcor’s Lead IT Recruiter in Latin America. We provide software engineering staffing in Mexico under our software R&D accelerator solution for US and European tech companies, helping them scale abroad from 0 to 100 Silicon Valley-caliber engineers in a year.

In this article, I will take you on a deep dive into the technology industry in Mexico, starting with its market overview, tech trends, and IT sectors and following up with major tech hubs of Mexico and notable companies. And the best part? You’ll uncover how to make the most of this thriving nearshoring destination. Let’s jump right in!

Mexican IT Industry Overview

The race for digital transformation has propelled the IT industry in Mexico to remarkable heights, making it the second-largest technology market in the Latin American region. The IT sector in Mexico is on the fast track to success, driven by a shift towards service-centric offerings. By 2028, it’s projected to hit a staggering $18 billion in market value, and a significant portion of that pie belongs to IT outsourcing. It’s been growing at an average of 10% annually, contributing to the number of Mexican IT companies, which now amounts to 12,900 tech companies.  Thus, the tech market in Mexico is already contributing to the country’s economic development and GDP.

Mexico’s robust and innovative tech ecosystem, which encompasses government initiatives, tech parks, and startup investment, is mainly behind Mexico’s tech development. For now, it numbers at:

• 38 IT clusters, 12,900 Mexican tech companies, and 1153 startups. 
• Three prominent tech hubs in Mexico: Mexico City, Guadalajara, and Monterrey.
• 388,000 of the active tech workforce in 2024, on top of its large talent pool. 

IT Services Market in Mexico

In 2029, the IT services market is forecasted to grow by over 30 percent, resulting in $23.2 billion. One-fourth of the market is dominated by IT outsourcing, accounting for up to $6.2 billion.  The largest revenue share in the Mexican technology industry comes from enterprise software, with $1.8 million in 2024 and a forecast to exceed $2 million by 2027. SaaS is expected to become Mexico’s top IT product and service segment over the next five years.

The main growth driver of the  Mexican IT sector is nearshore software development in Mexico. Here are a few reasons why North American IT companies opt for it:

• 700,000 software developers who rank 2nd in LATAM and 4th in the world for technology skills;
• Moderate labor costs, which are about 40-60% lower than in the USA;
• Geographic proximity and overlapping time zones which make the cooperation efficient and fruitful;
• Favorable business condition, ranking 10th in Kearney’s Global Services Location Index for financial attractiveness, people skills, and a business-friendly environment;
• Availability of USMCA, which establishes free trade relations, facilitates foreign investment and enhances protection of intellectual property rights.

Technology Trends in Mexico for 2024-2030

Cybersecurity. The fast proliferation of informational technology in Mexico and a surge in data processing made the country increasingly susceptible to cyberattacks. This vulnerability became evident during the pandemic, with a staggering 66% of all cyberattacks in Latin America targeting the Mexican IT industry. According to the Global Cybersecurity Index 2024, Mexico is in the 2nd advancing tier, sharing the category with Austria, Poland, Slovakia, Ireland, and other European countries.

To fortify Mexico’s cybersecurity defense and attract more international companies to the market, the Mexican government introduced a comprehensive national cybersecurity strategy, where both AI and cloud technologies are recognized as potent tools to combat and mitigate cyber threats. These proactive steps have already set Mexico’s cybersecurity market in motion, projected to expand substantially and reach an estimated value of $3.89 billion by 2028.

Learn more about IT outsourcing in Latin America and software development outsourcing in Mexico!

5G Technology. A notable trend within the Mexican technology industry is the deployment of 5G infrastructure. This advancement promises not only faster and more reliable internet connectivity but also contributes to digitization, bolsters the growth of domestic enterprises, and attracts foreign investments, paving the way for new applications and services. On a longer-term horizon, by the year 2030, the integration of 5G technology into Mexico’s digital landscape is forecasted to yield a substantial economic and social impact, amounting to an impressive $13 billion across various sectors. 

Smart Cities. Mexico’s National Digital Strategy is a blueprint for the nation’s dedication to ushering in the era of smart cities. Underpinned by digital technologies and data-driven solutions, Monterrey, Guadalajara, Mexico City, Querétaro, Tequila, and Puebla have already embarked on the journey. Their shared focus is developing robust digital infrastructure featuring fiber-optic networks, smart mobility systems, public Wi-Fi networks, innovative waste management solutions, and energy-efficient technologies.

Bridging Tech Gaps. The Mexican government aims to provide all states with equal opportunities for technical development. In terms of technological advances, Oaxaca is a case in point. It used to be an economically underdeveloped state due to its rugged terrain while the population struggled with unemployment. Thanks to the investment in its manufacturing facilities, Oaxaca is now a beacon of international trade: in 2023, its international sales hit $18.7 million. Naturally, this brings in foreign direct investment (FDI). In the first half of 2024, it reached $63.5 million, putting Oaxaca in the position for further tech growth.

State of Different IT sectors in Mexico

Hi-tech

The high-technology sector sets the scene for developing the most cutting-edge tech, including AI-based products and hardware, such as computers, electrical machinery, and scientific instruments. In 2022, high-technology exports in Mexico amounted to $82.3 billion. According to UNESCO, these represent 14.2% of total national exports, taking Mexico to the global top 10. As testified in the sectors below, such well-established trade sets the scene for further innovation. 

Artificial Intelligence

Since 2018, Mexico has embraced the development of artificial intelligence (AI), unveiling its National AI Strategy. In doing so, it became the 10th country in the world and the first in Latin America to regulate the use of AI in the public sector. 

According to the Latin American Artificial Intelligence Index, Mexico’s AI landscape ranks 5th globally in registering AI-related patents. The comparative findings show that the country also performs well in research, development, and adoption.  

This rapid AI advancement is accelerated by the exceptional skills of Mexican software engineers, the regionʼs experts in data analytics, management, and visualization. They have exciting opportunities to work at groundbreaking Mexican AI startups, such as Yaydoo, VR3io, FoodBot AI, and Omica.bio.

Mexico’s potential in AI technologies has not gone unnoticed by foreign IT companies. For example, US-based software engineering company Ascendion is set to establish a center for Generative AI skills in Monterrey. This initiative is expected to inject at least $100 million into the country’s economy, underlining the immense promise of AI for the future of  Mexican IT. Microsoft is not missing out: the tech giant plans to invest $1.3 billion to ramp up its Mexican AI and cloud computing infrastructure over the next three years.

Fintech 

The tech industry in Mexico boasts the second-largest fintech ecosystem in Latin America, hosting over 20% of all fintech companies in the region. At the same time, it leads in venture capital reports, accounting for 60% of the country’s VC funding between 2022 and 2024. The number of fintech startups in Mexico increased to a remarkable 650 in 2023–up from about 500 just the year before. Among them are such stars as Bitso, Clip, Konfio, Kueski, Stori, and Clara. These companies specialize in payments and remittances, personal financial management, crowdfunding, and lending. 

Due to the rapid evolution of the fintech industry in Mexico, the government introduced the Fintech Law, positioning Mexico at the forefront of regulatory issues. The law is all about providing a framework to make finance more inclusive, offering greater clarity for users of fintech services, and igniting a vibrant spirit of competition within the market.

Insurtech 

Together with Brazil, Mexico boasts the largest number of insurtech companies. Now reaching 118, it has increased more than fivefold from 2018, which showcased only 19 registered insurtech firms. The reason for such rapid growth? Mexico’s insurtech venture ecosystem. Not only does it command a 21% regional funding share as of 2023, but it also has a 26% attraction rate, becoming a magnet for global VC players. MAPFRE  reports that Mexico draws in 31% of foreign investors. Given that 21% of insurtech startups embrace novel business models, there’s yet more to witness in this sector.

Healthtech

For quite a long time, Latin American countries, including Mexico, have been struggling with a lagging medical system. Limited access to quality medical services and resources, plus the need to modernize administrative processes, served as driving forces for change. 

The HolonIQ LATAM Health Tech 50 report analyzed South American countries in the healthtech sector, where Mexico accounts for 38% of the total startup share. One exciting development is the Mexican startup Prosit, which recently secured a significant $100,000 in funding from Google. This investment will supercharge Prosit’s focus on health innovation, harnessing the power of AI and LLM technologies.

In the bigger picture, the digital health market in Mexico has seen explosive growth, nearly doubling in size since 2018, now estimated at a staggering $2.4 billion. This rapid expansion has been most evident in mental health, telemedicine, health insurance, and dental solutions.

Learn how to perform company incorporation in Mexico and explore how the EoR solution can free you up of its burdens! 

Telecommunication

Recognizing the pivotal role of the telecommunications sector in driving digital transformation, Mexico initiated a bold telecommunications reform. By amending the Mexican Constitution, the country’s government imposed tariffs on the companies threatening to monopolize the market. Also, it created the Federal Telecommunications Institute to oversee the competition in telecommunications and broadcasting.

Since 2013, it has yielded remarkable results, such as: 

• 42% reduction in the costs of mobile services; 
• 81% increase in mobile customers across the region.
• Mexico’s 2nd regional position in the telecom market, trailing only behind Brazil. 
• $34 billion in revenue in 2023;
• The number of 5G mobile connections about to grow by 400%, reaching 87 million by 2030.

Cryptocurrency & Blockchain

Although the crypto economy is smaller in Latin America than in other regions, it’s thriving due to solid grassroots adoption. Notably, three countries have made their mark in the top 20 of the Global Crypto Adoption Index: Brazil (ranked 9), Mexico (ranked 16), and Argentina (ranked 15).

Mexico’s crypto segment is on a remarkable trajectory, expected to reach $1.4 billion in revenue by the end of 2024, with a robust compound annual growth rate (CAGR) of 8.5%. A pivotal moment occurred in June 2022 when Bitso, a leading Mexican cryptocurrency exchange, successfully processed $1 billion in crypto remittances between the US and Mexico. This milestone garnered global attention, spotlighting Mexico’s rapid progress in the world of cryptocurrency.

In the realm of blockchain technology, Mexico’s blockchain market is forecast to grow at an 88.8% CAGR between 2023 and 2030, ultimately hitting $36.5 million. Moreover, 3.1 million Mexicans are investing in cryptocurrency, resulting in one of LATAM’s highest cryptocurrency adoption rates.

Curious about other LATAM markets? Unlock the trends and nearshoring benefits of the IT market in Chile and the IT sector in Colombia! 

IT in Mexico vs USA

Like IT in Mexico, the US tech industry is a superpower actively embracing AI, ML, robotic automation, and 5G technologies. As recognized by Statista, the US is #1 in AI startup funding. The IT services market collectively adds a substantial $522 billion in revenue to the national economy.

However, the growing number of tech product companies competing for qualified developers has created a burning issue: a talent shortage in the USA. According to the US Bureau of Labor Statistics, the demand for software engineers is projected to surge by a significant 17% between 2022 and 2030. Consequently, the competition for IT experts in the US drives up annual salaries, which currently reach $105K on average,  more than double the median wage of all other occupations in the U.S. labor market.

In stark contrast, the technology sector in Mexico offers a wealth of skilled IT talent with annual compensations ranging from $35,000 to $53,500, depending on the level of expertise. As a result, nearshoring technology in Mexico has emerged as an optimal solution for US tech businesses seeking to bridge the talent gap while maintaining cost-effectiveness.

Major Tech Hubs of Mexico

Mexico City

The leader among Mexican tech hubs, Mexico City, hosts 571 startups and accounts for 49% of the country’s startups. Here’s more:

• From 2021 to 2023, it attracted $4.24B in VC funding. 
• Notable industries include e-commerce, automotive, retail, and fintech. 
• It’s home to the National Autonomous University of Mexico and the National Polytechnic Institute, which ensure a stable influx of graduates. 

Monterrey 

Monterrey is the 2nd Mexican tech hub by the number of startups, which has reached 128. Moreover, the city boasts:

• 100+ innovation parks and 320 digital tech companies. 
• Well-established startups in EdTech and transportation, such as Nowports, Vinco, Robin Academy, and others. 
• Innovative education, such as an AI-powered learning ecosystem, recently pioneered by the Tecnológico de Monterrey.

Curious about nearshoring to Monterrey? Discover everything you need to know in our latest article!

Guadalajara

Although ranked as a 3rd tech hub in Mexico, Guadalajara has the local Silicon Valley title. Indeed, it’s a gem among tech cities in Mexico, and here’s why:

• In 2024, it climbed three spots higher in the Startup Ecosystem Index. 
• With 120+ startups, Guadalajara leads the scene in fintech, social Leisure, and foodtech.
• It makes waves in AI, developing the first GenAI lab with Wizeline.

Tijuana

Tijuana is an understated Mexican tech city, but it is well poised to become a burgeoning tech hub. Take the stats:

• Crunchbase reports $2.4M of VC funding in Tijuana, supporting 60 founders on pre-seed and seed rounds. 
• According to StartupBlink, successful startups abound in software & data, transportation, and fintech.

Mexican Tech Companies to Watch in 2025

Kavak, Mexico City. An online platform for buying and selling used cars, Kavak became Mexico’s 1st unicorn in 2023. Now the most valuable LATAM startup, it continues to enter other regional markets, standing out as an icon in the automotive industry. 

Clip, Mexico City. This digital payment platform was at the root of Mexico’s fintech performance. As of now, it has reached a valuation of $2 billion and keeps securing investment. In June 2024, another $100 million fueled its future advancements. 

Nowports, Monterrey. Positioning itself as an all-in-one logistics platform, this Mexican unicorn aims to optimize supply chain operations.  Now at a $1.1B valuation, it hit $133 million in revenue and 40 logistics customers in 2024. More to go in 2025!

Kueski, Guadalajara. Mexico’s leading BNPL provider enables unbanked Mexicans to purchase in-store and offers personal loans. In 2024, the platform reached 20 billion disbursed loans and was recognized as part of the Mexican top 5 ethical companies. 

Alibre.io, Tijuana. This company is a testament to Tijuana’s potential. Aiming to build a Social Savings Network, the startup has already been funded by Plug and Play and may show itself soon.

Expand Your Tech Business to Mexico Hasslefree

If your US-based IT company is struggling to find the right local tech professionals and is unwilling to outsource, expanding abroad could be the solution you’re looking for. Dotmatics, for example, once were in the same situation. They had a vision to develop scientific software for biologists but needed help hiring experts. That’s where Alcor came in as their trusted partner. With our comprehensive assistance, Dotmatics successfully ventured into a new IT market and got a dedicated team of over 30 software engineers within a year.

You can also achieve the same results with Alcor! We offer an all-in-one tech R&D accelerator solution in Mexico, Argentina, Colombia, and Eastern Europe. 

It includes:

• Employer of Record services—your way to delegate legal, payroll, accounting, and remuneration to Alcor and employ a team without establishing a legal entity overseas. Bonus: we also do onboarding & offboarding and manage benefits upon request, just like we assisted with stock options for ThredUP & Sift. 
• Full-cycle tech recruitment with an 80% CV pass rate, 2-6 weeks to fill a position, and 2.5 years of average hire tenure. Our secret? 40 local recruiters and a database of 253,000+ verified candidates.
• Operational support covering an office lease, equipment procurement, IT support, employer branding, HR services, and more.

You can rely on the efficiency and quality of our services, as we’re committed to building you a remote team of Silicon Valley-caliber programmers in a chosen location.  Imagine getting a team of 20 developers, fully compliant with local labor laws, within just three months. Moreover, 98% of our candidates successfully pass their probation period.

Sounds interesting? Get in touch with us to embark on your exciting R&D journey!