MEXICO - Finance
Founder & CEO, Softeq
Chris Howard is the founder & CEO of Softeq. He also serves as a General Partner in the Softeq Venture Fund. Howard started his career as a co-op student at IBM’s Federal Systems Division, which supported the space program at NASA. A lifelong entrepreneur, he is an active angel investor and advisor in several start-up technology ventures. He is a published magazine and book author, a podcaster, and an admitted gadget geek. He attended the University of Houston and studied electrical engineering on a full scholarship.
I operated an engineering services company for 25 years and started angel investing about 10 years ago. After investing in other people’s syndicates, I realized my team knew more about building new technologies than many of the people I was funding. Softeq has built products for big enterprises like Disney, Lenovo, Epson, and AMD, so I knew we had the engineering skill. In creating a venture fund and studio model, my goal was to de-risk tech start-ups for investors and founders. In 2021, we welcomed 22 new start-ups through the Softeq Venture Studio, our accelerator program, and we now have 49 start-ups in our investment portfolio. It is somewhat similar to an index fund made up of tech start-ups. This most recent cohort includes entrepreneurs from around the world, including Mexico, Peru, Uruguay, Egypt, Saudi Arabia, the UK, and Iceland.
We like to think about our unique model in the same way one might tackle a math equation: venture fund + venture studio + 500 engineers = future success. We have created a new model that de-risks investments while improving founders’ chances for success. Twice annually, we open the application process for funding. If we’re excited about an early-stage start-up, we’ll meet the founders to learn about them and their team, vision, growth strategy, and technology. If it goes well, we invest USD125,000 and spend three months with the founders either in the spring or fall. This is where the Softeq Venture Studio in Houston comes into play. Together, we develop a technology roadmap, identifying the most strategic areas we can help accelerate. Our companies also get access to our mentor network, free workspace at the studio, and a variety of free or highly discounted services including hosting, legal, banking, and more. It is about matching a particular company’s needs with experienced operators and executives who can help advance the vision and provide access to talent, customers, partners, and investors. Next, we unleash our talented team of engineers on a start-up’s idea in a manner that will lead to the next round of funding. Our engineers build for scale so that tech risk is reduced. As a consulting company to large enterprise tech firms, Softeq offers experienced hardware, firmware, and software developers along with certified cloud and infrastructure engineers to augment a start-up’s team. For us, it is a matter of reputation. Softeq engineers provide an individual approach and a variety of engagement models that can be adjusted to business needs and budget objectives. Taken together, these three areas make for a very powerful combination.
Most of our engineering staff were located in Eastern Europe, a region that has been destabilized over the past few years. We did our due diligence and learned that there is a tremendous amount of engineering talent in Mexico and throughout Latin America. We are excited because Mexico and Latam are growing in the tech sector, the market is huge, and it is still developing. There are some other key reasons as well. Our customers like that part of our team is located in the Central time zone. Also, Monterrey is only an hour by plane from our corporate headquarters in Houston, Texas. Mexico and Latam also offer very competitive rates for nearshore development talent.
We are extremely impressed with the quality and quantity of start-ups from the Latam region. We have invested in several companies, including Pagaloop, a financial technology company in Mexico City; HelloDoctor, a healthcare start-up in Mexico; Hapi, a stock trading platform based in Peru; Boxes, a retail tech company based in Uruguay, and Mesada, a digital remittance company in Mexico.
Softeq is planning to continue to expand the core development services business to 600 engineers, with at least 200 located in Mexico and Latam. We also want to invest in 40 additional early-stage start-ups to add to the 49 investments we have already made. We also plan to close out the USD50-million Venture Fund 1 that we launched in 2022 and raise a new USD250-million Venture Fund 2. It is also important for us to add at least two more Venture Studio locations and be able to put more money behind the winners in our portfolio. And as we have done for the past quarter century, we plan to be unstoppable in finding the best ways to turn start-ups’ bold visions into huge success stories that span borders and time zones.
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