Accelerating Latin America’s Tech Start-ups

Seed funds and accelerators are providing not only capital but also much-needed know-how across the region. © 500 Luchadores 

Santiago Zavala grew up observing first-hand the difficulties entrepreneurs face. As he watched his parents start a series of small businesses in Mexico City, he learned a critical lesson: having a partner who offers encouragement and advice is critical to the success of any enterprise.

Santiago Zavala, founder of
500 Luchadores.


When he joined the U.S.-based venture capital firm 500 Startups, he knew he could use that knowledge to guide technology start-ups in Latin America. “Here in Latin America, we don’t have a lot of role models for new tech companies,” says Zavala, who is 31.

So he launched 500 Luchadores, a fund to help the region’s tech entrepreneurs scale up. In addition to investing seed money, 500 Luchadores also serves as a start-up accelerator, formalizing and facilitating support for entrepreneurs to expand their operations and secure additional financing.

Initiatives like 500 Luchadores are essential for a vibrant start-up ecosystem in Latin America. These programs are cultivating a new generation of entrepreneurs who are growing the region’s digital economy, promoting inclusiveness, and providing access to better services.

This week, dozens of start-up entrepreneurs like Zavala are in Sao Paulo, Brazil, to participate in the World Economic Forum on Latin America. The conference program includes sessions with promising businesses and potential investors, partners, and policy makers.


Transforming Latin America’s Tech Landscape

500 Luchadores—“500 Fighters” in English—responds to the specific needs of start-ups. Twice a year, the fund identifies about 15 promising new ventures from the region. It invests in them and brings their founders to Mexico City for a four-month accelerator program that is part business boot camp, part masterclass in mentorship, and part family-style networking system.

Six years after it was founded, 500 Luchadores is now reaping rewards: It has helped connect 130 companies to their markets and created 1,500 direct jobs. In 2016, a second iteration of the fund—500 Luchadores II—was launched, with IFC as its first institutional investor. The new fund aims to support more than 70 seed-stage companies across Latin America.

IFC’s support to 500 Luchadores II was delivered through IFC Startup Catalyst, a $30 million facility that invests in commercially oriented incubators, accelerators, seed funds, and similar vehicles and structures across emerging markets. Investments average between $1 million to $2 million.

“One of the biggest challenges for start-ups from Latin America is to find capital for their growth,” says Marta Cruz, a cofounder of Argentina-based NXTP Labs, Latin America’s most active early-stage investor in tech companies. When investees are better funded and equipped with know-how, “these companies have more chances to achieve their goals.”

NXTP Labs was the first investee of IFC Startup Catalyst. Cruz says that IFC’s investment in NXTP Labs provides Latin American tech founders with capital, hands-on support, and access to an international community of like-minded entrepreneurs, investors, and mentors. Although the fund was founded just over five years ago, it has already invested in more than 170 companies.


Cultivating Innovators

So what does it take for a new tech venture to be chosen by an accelerator? At 500 Luchadores, Zavala and his colleagues look for good teams, interesting products, and strategies that change the way people and companies interact with service providers.

Besides providing funding and support services through the accelerator, 500 Luchadores remains committed to its portfolio companies long after an investment is made. “We have a deep connection after spending those initial four months together,” Zavala says. “So we continue to provide help with whatever they might need as they move forward. We help them recruit talent, find mentors, and work through any other challenges they have.”

Both Cruz and Zavala believe this is only the beginning of Latin America’s technology wave, and are already predicting investees’ impact across regional markets.

“IFC’s involvement as 500 Luchadores II’s first institutional investor was an inflection point,” Zavala says. “It’s given us credibility and has opened a lot of doors to people that we’ve been trying to reach for years. Now we have other institutional investors. Luchadores III and further generations will be even better.”

This story is available in Spanish and Portuguese.

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Published in March 2018.


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