NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Tuesday, August 16, 2016

Alejandro Avila, the 30-year-old Mexican cofounder of Espiral, a mobile wallet service that he describes as “Square meets Stripe,” is on the edge of something big. Mexicans carry more than 100 million mobile phones and only 15 percent use credit cards, making financial tech a lucrative nascent market.

Yet Avila—whose family left Mexico in the 1990s only to return a decade later—faces a dangerous caveat to success.

Espiral is based in Guadalajara, a place locals call the Silicon Valley of Mexico. With startups galore, and deep-pocketed multinationals like Intel, HP, and Oracle all tapping the relatively affordable engineers, this city is home to tech innovation.

But what the guidebooks don’t tell you is that this place is also home to very real terror. Three police officers were killed in a rich suburb here in February—in broad daylight—days before I met Avila. Last year, buses were set on fire in downtown Guadalajara, blocking traffic and allowing cartel leaders to escape police. Last May, members of that same cartel used a rocket-propelled grenade to shoot a military helicopter out of the sky.