In this series we want to highlight some of our scouting partners who have been of great value in finding the brightest start-up talents from all around the globe. Leading start-up hubs, accelerator programs and entrepreneurship competitions shared their enormous worldwide networks with us. In this episode: GreenMomentum, a market intelligence firm focused on the Latin American cleantech industries. We talked to Rafael Carmona, founding partner, about how entrepreneurship and innovation can accelerate economic development opportunities.

 "“It is encouraging to see this green tech movement growing around the world" 

Can you tell us something about your company GreenMomentum?
“GreenMomentum is a market intelligence and innovation company in the cleantech industry in Mexico and Latin America. We have three main areas of activities: our initiatives for entrepreneurs, which includes a business plan competition called Cleantech Challenge Mexico, together with other incubation and acceleration programs. We organise those together with governments, the private sector, and academies. Secondly, we have the Intelligence and Innovation (IN2) area where we focus on the definition and implementation of public policy, fostering the supply and demand of clean technology in Mexico and Latin America.

Thirdly, we recently opened P39 Cleantech Center, a cluster which further pushes the boundaries of technology development and implementation in Mexico. We believe there’re significant opportunities to develop local solutions for, for example, smart metering and smart vehicle chargers, integrated to clean distributed generation networks. We work with all kinds of actors from private companies, R&D centres, federal and local governments, as well as international agencies.

How urgent is the shift towards a clean tech transition in Mexico?
“Mexico’s economy relied on the petroleum industry for many, many years. Now, we are starting to see a global transition to a lower carbon economy, which in Mexico is supported by the Energy Reform that’s been implemented in recent years. There is a very interesting window of opportunity for implementing cleaner energy sources, such as solar, both at utility scale and distributed generation. That has opened the doors for clean technologies to be implemented on a large scale. As you can imagine, we have huge amounts of sun in Mexico, a subsidy that Mother Nature gives us for free. It is a pity that we haven’t been more proactive in using this specific technology.

But things are evolving very fast now. Mexico is taking advantage of the low technology costs right now and the local experience learned from all these previous global efforts. That has made the energy reform in Mexico more agile and effective, I would say. It can also be a good thing, not to be an early adopter.”

Can you name a few examples of start-ups that you are particularly excited about?
“The technologies that we embrace are not only about clean energy, but also about green chemistry, water treatment, and we support a lot of recycling projects as well. Two projects that came out of the Cleantech Challenge Mexico are EcoBiosis and Xilinat. EcoBiosis recycles the vinasses produced by the sugar, alcohol, and yeast industries, instead of letting them enter the water systems. The company transforms the vinasses into a natural dispersing and plasticising agent. The main by-product is clean water, which is reintegrated in the alcohol production process. The second start-up, Xilinat, produces xylitol out of organic residues from corn crops and yeast. Their product is used to avoid diabetes and caries on teeth, especially with kids.”

What are challenges or opportunities for the green tech ecosystem in Mexico at the moment?
“A clear challenge in Mexico is the lack of financial resources. Banks are barely involved in early staged projects. The venture capital industry is very risk averse and is not specialized in cleantech. So cleantech companies still have a hard time to get funded by different sources. But is has been changing. Our last government administration made an interesting effort to support innovation in the cleantech industry through the Sustainability Energy Fund. It is a public fund that uses money from the petroleum industry to support research programs on solar, wind, ocean energy, bioenergy, smart grid and carbon capturing. Resources are limited, but the commitment is to increase funding in these areas. These subtle political changes are pushing forward a lower carbon economy in Mexico.

It has also been interesting to see how the door has been opened for renewables in Mexico. The petroleum industry has been a public, vertically integrated monopoly for many years, with giant Pemex as one of the most important companies. Through inefficient operation it couldn’t stay competitive and the government decided to open the door for foreign companies to get into the market sharing risks, investment, and benefits. The same happened in the electricity sector, where the Federal Electric Commission (CFE), which was also a nationwide monopoly for electricity generation, transmission, distribution, and sales, was divided into several smaller companies, allowing private companies to compete. The process that the government implemented to guarantee the expansion of the electric sector in Mexico is based on long term auctions, in which the main winners have been wind and solar projects, offering historical low prices of electricity.”

What is your view on social and green entrepreneurship?
“We believe that the main point is that we have to create a space for new business models to be able to develop and implement innovative technologies. Green business model competitions, such as yours and ours, help in achieving this goal. They enable start-ups to push their development forward towards large scalability. It is encouraging to see this movement growing around the world.”

Green Momentum Clean Tech Challenge smallerDuring GreenMomentums business plan competition, "Cleantech Challenge Mexico"