Software Development in Mexico: Trends & Insights

Did you know that software development outsourcing in Mexico is on fire? With the country’s leading technologies such as cloud, AI, ML, Fintech, and cybersecurity, the nearshoring industry is set to grow by 25% annually, reaching an impressive market value of $30 billion by 2030. So, could it be the perfect moment to consider expanding your company into this thriving location?  

I’m David Gomez, the Lead IT Recruiter in LATAM at Alcor, a tech R&D accelerator that builds software development centers in Mexico and other Latin American and Eastern European countries for US tech product companies. For over 7 years of experience in IT recruitment in Mexico and across LATAM, I’ve gained valuable experience and insights into its tech and know how to help product tech companies set up their Silicon Valley-caliber software engineering teams from 0 to 100 employees within a year.

In this article, we’ll delve into the latest trends in the Mexican software development industry, overview of the local IT industry, tech news, average developer salaries, top tech hubs, and different collaboration models with the best software development talent in Mexico to take your product to the next level. And now, let’s start with the basics… 

Software Development in Mexico: 2018-2024 Overview 

According to the HackerRank Developer Skills 2023 Report, Mexican software engineers for hire are among the top talents in EMEA and LATAM. The local skilled workforce has caught the attention of Google, Microsoft, Intel, Oracle, IBM, Samsung, and other tech giants, all of whom have chosen to establish offices in the country rather than outsource software development to Mexico. 

Beyond that, the country’s unwavering commitment to innovation is paying off. In 2024, Mexico secured the region’s third most innovative tech economy with excellent ratings in creative outputs, knowledge and technology, market and business sophistication, human capital, and research. Thus, this impressive achievement has allowed Mexico to proudly ranks 2nd in the region for its thriving business environment.

Did you know that in 2024, the Mexico’s top three most–funded startups raised over $830 million? These include a transportation company, Justo, Fintech startup Klar, and unicorn Konifo. In addition to these rising stars, Mexico is also home to eight other unicorns, such as Bitso, Clara, Clip, Incode, Merama, Nowports, Stori, and the highly valued Kawak, which has raised over $1 billion in funding and boasts a $9 billion valuation. 

Furthermore, the local IT outsourcing sector, with an annual growth rate of 10-15%, positions Mexico as a strong player on the regional and global stage. Projections suggest that by 2029, the sector’s value will soar to a staggering $23.2 billion, underscoring the country’s growing prominence and competitiveness in the international tech landscape.

Latest News on Software Development in Mexico

Mexican startups keep securing millions in funding. For example, Stori, a Mexican Fintech unicorn focused on expanding financial inclusion in Latin America, secured $212 million in August 2024 to strengthen Stori’s digital credit services across the region. Another prominent case is Cargado, a new venture focused on optimizing US-Mexico cross-border logistics, which has raised nearly $10 million of investments since October 2023 up until September 2024.  

Mexican software development companies are also making waves in the funding arena. Case in point: the rebranded ALLVP, now Hi Ventures, announces its latest endeavor—a cutting-edge AI-focused fund—cementing its pivotal role in Mexico’s tech landscape. Renowned for its track record and global partnerships, Hi Ventures aims to fuel innovation and growth in the region by empowering companies with the power of AI.  

These developments highlight a growing trend: foreign investors are increasingly backing local tech companies, fueling the expansion of software engineering in Mexico. So, take note and don’t miss your wave of success! 

Main Trends of the IT Market in Mexico 

• Cloud

Mexico’s public cloud computing sector is poised for remarkable growth, projected to increase from $8,44 billion in 2024 to an estimated $18.98 billion by 2028, driven by an impressive CAGR of 17.6%. As companies prioritize technology investments in the coming year, cloud computing emerges as the top choice, with 42% of businesses planning to allocate their resources in this area. Mexico’s Ministry of Economy has collaborated with Amazon to launch the “Boosting Mexican talent to the cloud” initiative to train over 13,000 developers in cloud computing skills to further enhance the country’s technological landscape. 

• AI & ML   

Mexico boasts a mature AI ecosystem, ranking 5th globally for its impressive research output. In fact, Mexico and Brazil together hold nearly 95% of all AI patents filed in Latin America. Meanwhile, despite not traditionally being known for robotics, Mexico is defying expectations with its impressive adoption rate. It now ranks 3rd in growth and sits comfortably among the top 10 robotics users globally. Overall, the Artificial Intelligence market in Mexico is projected to reach $2.78 billion in 2024. 

• Fintech 

Mexico keeps leading the Fintech boom. In 2020, the country became the first in the region with dedicated Fintech laws and attracted 20% of all venture investments, according to TechCrunch. In addition, Mexico’s Fintech scene is nearing 1,000 companies — an 18.4% growth in just five years. 62% of these Fintechs raked in over $500,000 in revenue in 2023, and that number is projected to hit 80% in 2024! This impressive growth shows the power of innovation and the increasing demand for digital financial solutions in Mexico. 

• Cybersecurity 

To become a more robust and secure country, Mexico developed a national cybersecurity strategy, leveraging AI and cloud tech to shield its data. And it’s working! According to the Global Cybersecurity Index, Mexico currently holds the 52nd position among 182 countries regarding cybersecurity preparedness. Even though global cyber threats still exist, Mexico’s proactive approach makes it a resilient player in the tech game. 

• 5G Technology 

Mexico’s embracing supercharged 5G, promising blazing speeds and booming businesses. Here’s the exciting part: by 2035, 5G could inject a whopping $730 billion into Mexico’s economy, impacting everything from healthcare to manufacturing. While lagging behind some countries (15% 5G coverage compared to the US’s 61%), Mexico’s mobile market is catching up fast, with 25% of lines expected to be 5G-powered by 2023. The country is just a few steps away from attracting investments, fueling innovation, and creating new opportunities in this area. 

• Smart Cities 

Mexico’s cities are shaking off old habits and embracing the new ones with a tech-powered makeover! Forget traffic woes and unreliable Wi-Fi–Mexico’s National Digital Strategy is paving the way for smart cities like Monterrey, Guadalajara, and Mexico City to boast lightning-fast fiber networks, smart mobility systems, ubiquitous public Wi-Fi, innovative waste management, and energy-efficient tech. And it’s not just a big-city trend – even Querétaro, Tequila, and Puebla are joining the smart revolution. So, buckle up!

The Future of the Mexican Software Development Industry 

After exploring these delicious trends, it’s no wonder why this country is attracting tech companies searching for their ideal software developers in Mexico. But what awaits those who decide to enter this market in 2025? 

The software development market is projected to grow to $5.71 billion by 2029, reflecting the growing demand for this industry. In the next few years, the country will experience a surge in AI and machine learning engineering, with the market projected to reach a combined total of $20.2 billion by 2029, reflecting a substantial 64% CAGR. Meanwhile, the Internet of Things (IoT) sector is on track to reach $18.10 billion by 2029, fueled by an 11% CAGR. This expected growth signals fresh opportunities for businesses ready to capitalize on Mexico’s growing tech landscape. 

Another piece of good news—Mexico’s cybersecurity sector is booming, with projections to reach $4.34 billion by 2028. This growth is driven by the widespread digital transformation across industries, requiring enhanced data and system security. It creates abundant opportunities for startups and companies specializing in developing innovative cybersecurity solutions. 

Don’t miss out—consider offshore software outsourcing from Mexico as your next strategic move for your product development. And if you’ve already taken the plunge, below we’ve compiled a list of the country’s most innovative tech hubs driving the future of its tech industry! 

Mexican Developer Salaries 2024 Comparison 

Before we delve into comparing average developer salaries between Mexico and other nations, let’s examine the wages of Mexican developers by levels. Check out the table below!

Position	Junior	Middle	Senior
Full-Stack Software Developer	$12,000-$25,000	$40,000-$66,000	$50,000-$80,000
Front-End Software Developer	$10,000-$22,000	$25,000-$45,000	$40,000-$75,000
Back-End Software Developer	$12,000-$25,000	$30,000-$55,000	$50,000-$80,000
Android Developer	$10,000-$22,000	$26,000-$44,000	$45,000-$75,000
iOS Developer	$10,000-$22,000	$26,000-$44,000	$45,000-$75,000
Game Developer	$12,000-$25,000	$25,000-$45,000	$50,000-$80,000
Data Scientist	$13,000-$28,000	$28,000-$50,000	$60,000-$90,000
Cloud Engineer	$13,000-$28,000	$33,000-$55,000	$60,000-$85,000
DevOps Developer	$13,000-$28,000	$28,000-$53,000	$60,000-$85,000
Developer salaries were converted to US dollars at a relevant exchange rate for November 2024.

What do we see? Junior developers in Mexico typically fetch $10,000-$28,000 annually, while seniors can command salaries starting at $40,000 on average and reaching up to $90,000. But it’s worth noting that Mexico shines in data science and cloud computing, where IT professionals tend to earn a bit more. 

Now, let’s compare Mexican developer salaries with their counterparts in the USA, UK, and Germany.

Position	Mexico	USA	UK	Germany
Full-Stack Software Developer	$40,000-$66,000	$90,000-$105,000	$63,000-$75,000	$64,000-$87,000
Front-End Software Developer	$25,000-$45,000	$85,900-$140,000	$50,400-$81,900	$100,000-$152,472
Back-End Software Developer	$30,000-$55,000	$97,814-$156,000	$50,400-$78,733	$102,500-$171,350
Android Developer	$27,000-$50,000	$104,980-$160,000	$50,400-$94,500	$104,980-$160,000
iOS Developer	$27,000-$50,000	$86,000-$110,000	$73,000-$79,000	$69,000-$83,000
Game Developer	$25,000-$45,000	$87,501-$161,576	$53,331-$88,200	$87,501-$161,576
Data Scientist	$28,000-$50,000	$102,662-$171,334	$55,011-$100,800	$102,662-$171,334
Cloud Engineer	$38,000-$60,000	$122,000-$142,000	$69,000-$79,000	$76,000-$90,000
DevOps Developer	$33,000-$53,000	$102,526-$165,000	$53,750-$94,500	$102,526-$165,000
Developer salaries were converted to US dollars at a relevant exchange rate for November 2024.

The tables turn drastically when we look beyond Latin America. Even the lowest wage in the UK or Germany would set you back $10,000-$15,000 more than Mexico’s highest average salary. And the US? The cost-efficiency of hiring Mexican software development specialists instead of US developers is nearly 70%.

Reasons to Opt for Software Development in Mexico  

Skilled Coders 

The IT talent pool in Mexico is bursting with talent—there are over 700,000 developers! But they’re not just numbers; the quality counts, too! Coursera’s 2024 report ranks Mexican software developers #3 in Latin America and #4 globally for their tech skills, especially in data science (think AI and machine learning superpowers!). Local developers are pros at popular US tech stacks like JavaScript, Java, Python, SQL, and C++. TechCrunch even reports a surplus of highly trained tech pros in Mexico. And guess what? The numbers are only increasing, thanks to government initiatives for accessible and comprehensive higher education.

Educational Tech Ecosystem 

124,000 engineers–that’s the number of tech geniuses graduating in Mexico EVERY YEAR. Mexico has more than 1,000 tuition-free universities. They’re leading the pack regarding STEM graduates among all OECD countries in the American continent. We’re talking top 7! And thanks to the rise of bilingual Spanish and English campuses, most graduates will be ready to enter the English-speaking hiring market.  

Developed IT Infrastructure 

Innovations in the tech infrastructure have significantly contributed to the rise of software development in Mexico and keep doing so. There are 20+ nationwide tech parks: Creative Digital City, Guadalajara Software Center, Apodaca Technology Park, and Monterrey Technology Park. And that’s not all – the country goes above and beyond to support Mexican developers by launching government programs for entrepreneurs, such as 500 Startups LaTam and Fondo Nacional Emprendedor.

Shared work ethics 

Mexican software developers often exhibit a strong work ethic characterized by dedication, punctuality, and a willingness to go the extra mile to meet deadlines. They are resourceful problem-solvers and adopt a direct, assertive communication style. This alignment reduces unnecessary friction, which allows you to focus on other priorities. When you opt for Mexican software development, you can be sure your project goals become a shared priority.

Real-Time Synchronization 

Global collaboration without the timezone math? Yes, please! Mexico City’s just two hours behind New York and one ahead of California. Translation: seamless collaboration with minimal schedule adjustments for your team.  

Вut, where do you look for those promising developers? Well, they are usually located in 3 main hubs.

Top Software Development Hubs in Mexico  

Mexico City  

Mexico City isn’t just a megacity with 21 million residents–it’s a gateway to Latin America. As the heart of Mexico’s tech ecosystem, it’s home to more than half of the country’s tech workforce. Plus, this tech hub boasts top regional universities like the National Autonomous University of Mexico and the National Polytechnic Institute, attracting over half of software engineers from Mexico. No wonder it ranks among LATAM’s top 10 tech hubs, drawing tech giants like Google, Meta, Twitter, and Uber to set up their offices here. Finally, it’s mostly known for its well-developed startup network in Fintech, producing unicorns like Bitso, Clip, Kavak, and Stori. So, whether you‘re in search of highly qualified tech talent, aiming to hire nearshore or offshore developers, seeking a dynamic ecosystem, or scouting the next significant Fintech innovation, Mexico City is the place to go. 

Monterrey 

Monterrey, Mexico’s second-largest industrial hub, isn’t just about factories and Fortune 500s (Banorte, Cemex, Femsa, Coca-Cola, Soriana, anyone?). This buzzing metropolis, conveniently close to the US border, has morphed into an irresistible “investment magnet,” boasting over 100 innovation parks and a whopping 320 tech companies (as reported by Eleconomista). With over 100,000 tech professionals, Monterrey’s thriving IT sector is a testament to its dynamic workforce. But the real magic lies in the synergy between corporations and academia. Monterrey’s elite universities—Tec de Monterrey, University of Monterrey, and Autonomous University of Nuevo Leon—attract entrepreneurs and contribute to the city’s unique ecosystem. Thus, Monterrey is famous for EdTech startups and unicorns—ever heard of Nowports? 

Guadalajara  

Often called Mexican Silicon Valley, Guadalajara isn’t just claiming the title–it’s living it. This rapidly digitizing city (5th most in the region!) snagged investments from tech giants like Intel, IBM, and HP, rocketing into Latin America’s top 50 tech clusters. Guadalajara’s potential is sky-high, with over 600 tech companies like Kueski, Voxfeed, and WePow and a whopping 78,000 tech experts calling it home. The upcoming Digital Creative City project in its Metropolitan area further cements its status as a hub for digital media innovation. Buckle up; Guadalajara’s tech journey is just beginning! 

Tijuana 

32 km away from San Diego and a strong cultural affinity with the American work ethic are significant advantages of Tijuana as a tech hub for companies looking to hire software developers from Mexico for their research and development teams. Plus, a sizable talent pool of 100,000+ developers and the presence of well-developed business infrastructure and innovation centers, such as the newly established 2022 Tech Park, allow companies like Plantronics and Samsung to choose Tijuana as their treasure trove when looking for software engineers in Mexico. 

Merida 

Designated as a “smart city” in 2019, Merida continues to hold the bar as one of the country’s tech hubs and ideal environments for software development companies to nearshore skilled developers. Alongside other Mexican cities, it contributes to the growth of over 70,000 tech engineers. Additionally, known for the Innovation Hub and the Science and Technology Park of Yucatan, which offer resources and mentorship to tech startups, Mérida is not only drawing global attention but is also a birthplace for prominent local tech initiatives. As a result, the city is home to such successful tech companies as Kubo Financiero and Nuum, further strengthening its position as an emerging player in Latin America’s tech ecosystem. 

Simpler Than Outsourcing Software Development to Mexico  

While tech outsourcing and IT staff augmentation in Mexico are often suited for less strategic tasks in non-tech companies, developing a whole software product requires more fundamental effort. Ideally, it would help if you had a synergy of shared vision with your developers, direct communication, and complete control over the engineering process. But what are the best cooperation models to achieve this? 

Employer of Record 

Forget about just outsourcing payroll in Mexico—instead, consider an Employer of Record company as your legal intermediary. They officially employ developers on your behalf and handle HR tasks like payroll, taxes, employee benefits, and onboarding/offboarding. This frees you from administrative burdens and the need to set up a legal entity. But remember that recruitment is still on you—EOR providers typically don’t include tech headhunting and employer branding in their services list, even though they are vital for attracting senior and lead engineers. So, you must find and interview the right talent before opting for this model. 

Tech Recruitment 

A tech recruitment agency streamlines the entire process of attracting, interviewing, and hiring skilled developers with a tech stack. The partnership with such a vendor keeps you involved in the decision-making and ensures your voice is heard and your expectations are met. However, only some tech recruiting firms can perform essential operational functions like payroll, accounting, legal and compliance, employer branding, etc. Wouldn’t it be great if you had Employer of Record combined with professional tech recruitment, right? 

That’s what US scientific software company Dotmatics thought when it decided to expand. They needed 30+ top-notch tech talents on board fast. The company reached out to Alcor, and our team provided them with full-cycle IT recruitment and individual support on arising matters. Through rigorous selection and ongoing communication, we delivered only the best: 30 A-list hires within a year, including a Director of Engineering, Full-Stack, React, DevOps, Node.js, QA Engineers, and a Product Manager, the latter two positions — with the first candidate. Alcor also had the client’s back on payroll and equipment procurement and covered legal compliance, helping Dotmatics run a 100% transparent business in both locations.  

R&D Center  

Establishing your own software development center in Mexico is the most fully-fledged model for expanding your company into new markets. Add EOR to tech recruitment in Mexico and mix them with powerful employer branding, office lease, legal support, hardware procurement, and other operational functions. You’ll get a perfect solution that lets you focus on software development and forget about back-office stuff. In the long run, this is the best model to reap all the benefits of tech talent potential in foreign locations.  

With us, you can expect 20 senior/lead developers on board in 3 months, 15% of whom are hired from the very first CVs. 80% of the developers we represent secure interviews, and we successfully fill roles within just 2-6 weeks. 

It has proven effective for many well-known tech companies, including a US-based technology company,  People.ai. Their company develops a platform with the help of machine learning and AI that streamlines team management, marketing processes, and sales. To avoid all the typical struggles when offshoring to Eastern Europe, People.ai partnered with Alcor and got a complete cycle of support in real estate, legal, and finance issues. Alcor took care of every minor step in setting up the R&D office—from tech infrastructure deployment to office preparation and redecoration. As a result, People.ai got a thriving R&D center within just 4 weeks. Eventually, it was staffed with 25 skilled developers. People.ai received complete control over its R&D center and all intellectual property rights.  

References on Software Development in Mexico 

1. Mexico Business News
2. HackerRank
3. WIPO
4. StartupBlink
5. Statista
6. FinTech Global
7. Transport Topics
8. Contxto
9. Frost & Sullivan
10. Vallarta Daily News
11. Inside LatAm
12. Medium
13. TechCrunch
14. Fintech Nexus News
15. IYUPublications
16. Oradel
17. Reuters
18. The GIP Digital Watch
19. Mordor Intelligence
20. Nearshore Americas
21. Coursera
22. Cobierno de Mexico
23. Tekuma Frenchman
24. PRWeb
25. The Yucatan Times