From Idea to $50 Million Fund: How 6 Entrepreneurs are Building Latin America’s Top Early-Stage VC Firm

For a startup, securing early-stage financing can be the difference between getting off the ground or remaining nothing more than a PowerPoint deck.

Founders often carry this weight on their shoulders. Scoring VC dollars (and using them pragmatically) is as important as building a minimum viable product and gaining market traction.

The odds are against them, with around 90% of startups completely failing. The challenges are often most acute in the early stage. Nearly 80% of startups fail to raise a round following the seed investment – higher than any other stage, earning it the “valley of death” nickname.

That's the main reason why Mariano Mayer and his five partners decided in 2021 to create Newtopia VC, a $50 million Argentinian venture capital firm that aims to help “idea” to “pre-seed” stage startups thrive and “unleash a new wave of Latin American tech companies.”

The Org spoke with Mayer, Newtopia VC’s Managing Partner and co-founder, to understand how the idea of this “very early” stage firm was conceived and built.

Everything begins at home

Mayer grew up alongside 11 siblings in Argentina's capital Buenos Aires – and he said his mother became his first and biggest entrepreneurial role model, instilling in them a mindset of dreaming big, helping others and never accepting “no” as an answer.

“When my mother was young, the doctor told her that she couldn't have kids. Imagine what would have happened if he had told her she could,” said Mayer in a humorous tone.

Many of his siblings ended up as successful entrepreneurs. In part because of the creative environment the Mayer family lived in; in part because they had to quickly learn management and collaborative economics in order to make things work at home.

“Our home was more like a small business than a house,” recalls Mayer.

Mayer studied law in Buenos Aires, and despite not wanting to dedicate himself to corporate law, he opened a law firm right after graduating in 2000 to support entrepreneurs and venture capital funds.

“I thought about changing to a social worker career until a friend and I began to see that there were many colleagues undertaking ventures, and I was excited to participate in the entrepreneurial movement,” he said.

Politics, why not?

Mayer grew the law firm and sold it in 2011. He remained a partner until 2013, when he was invited to become the General Director of Entrepreneurship for the city of Buenos Aires, an opportunity he didn’t hesitate to accept.

“I felt that I was someone from the ecosystem who was given the possibility from within to try to promote things that we had always talked about from the outside,” Mayer said.

Inspired by Israel’s “Startup Nation,” Mayer helped transform the entrepreneurship and startup scenario in Buenos Aires, setting the foundation for the city to become one of Latin America’s most important startup ecosystems. In 2015, he was appointed to be National Secretary of Entrepreneurs and SMEs for Argentina, a position that he held for four years.

Time to build

“In all the years in which I was involved in entrepreneurship, we always discussed the possibilities that the region had and how entrepreneurs could change Latin America,” Mayer said. “But it was more a wish than a real possibility.”

After his time in government, and before Covid-19 hit in 2020, Mayer co-founded Marea Venture Partners, a consulting firm that helps organizations and startups work together, and helps governments build better entrepreneurship policies.

But the pandemic brought another opportunity that Mayer had been quietly chasing for years: to directly support Latin America’s entrepreneurial talent.

“Covid-19 perceptually shrank the region thanks to the ‘forced’ digital acceleration that organizations and people had to go through,” he said. “This acceleration allowed us, and more importantly the world, to start looking at Latin America as one big region full of opportunities and possibilities.”

During this time, international VC firms like SoftBank began to set their eyes on Latin America and venture capital started to break records quarter after quarter.

Mayer began having conversations with friends and colleagues about the opportunity in front of them. They came to the realization that a venture capital firm focused on the earliest stage startups – those in the “idea” to “pre-seed” stages – was needed to leverage the biggest future opportunities.

“Many VCs, small and big, were investing in Series A and beyond, but the need for the early stage was left loose,” said Mayer. Thus, the idea for Newtopia was born.

Sourcing a dream team

Mayer found its first cofounder in Sacha Spitz, who ran a VC fund called Yavu that had more than 20 portfolio companies.

“During the first meetings, we talked about how to collaborate between the funds, but the conclusion was that we needed to join forces,” said Mayer.

With Spitz on the team, they went to see Patricio Jutard, co-founder of the unicorn Mural, a San Francisco-based collaborative software company that has raised over $190 million.

“We wanted [Jutard] as an investor, and to our surprise, he didn’t just love the idea, he wanted to be part of it,” said Mayer. The same happened with Juan Pablo Lafosse, founder and CEO of TravelX, a startup building a blockchain-based distribution and retailing infrastructure for the travel industry. To complete the team, Mayer tapped his former government colleague Jorge Aguado and serial entrepreneur Diego Noriega.

With a clear vision and dream team ready, the fundraising came quickly.

“We are really grateful for the warm welcome Newtopia has received from the investment ecosystem. Despite that we were all first-time fund managers, except for Spitz, we ran with luck that great entrepreneurs, like [Mercadolibre co-founder] Marcos Galperin and [Globant co-founder] Martin Migoya, along with several family offices from across the region, decided to bet on us,” said Mayer. “They saw in Newtopia a vehicle to make a change in Latin America for the future generations.”

Famous former sports players like NBA hall of famer Manu Ginóbili, former professional tennis champion David Nalbadian and rugby star Joaquin Tuculet also got hooked on Newtopia’s mission, joining as limited partners.

A cohort of Newtopia-backed founders. (Image courtesy of Newtopia.)

Measuring Newtopia’s impact

Newtopia offers an investment and mentoring model to guide startups through the early stages, so they can then grow regionally or globally. Newtopia's 10-week program helps founders find the right product for the market, achieve initial goals and lay the groundwork for further growth.

“We provide our startups with intensive support from our investment until the Series A,” said Mayer.

Since Newtopia opened its doors in August 2021, it has welcomed three startup cohorts and invested $10 million among 52 earl-stage startups from 12 different countries and industries spanning agtech, blockchain, biotech, crypto, ecommerce, fintech, foodtech, healthtech, HR tech, proptech and web3.

Newtopia’s thesis hinges upon the idea that founders (and their teams) must be solving a big problem, and they must be fully committed to doing it. For any founder wondering how a venture capitalist will evaluate them, Mayer highly recommends the article How FJ Labs Evaluate Startups.

A year in, Newtopia has formed a community of more than 300 people across Latin America, the U.S. and Europe, with vast experiences in culture, high performing, technology, different industries, fundraising and entrepreneurship.

“Our community is part of the day-to-day support for startups to help them achieve their best version,” said Mayer.

Its portfolio companies agree that Newtopia is doing something right. Daniel Moreno, the co-founder of a startup called Alfred that connects users to vehicle maintenance and repair shops, said that Newtopia has been a daily guiding presence as he scales his company.

"The community they have built is amazing, first because of the type of people we now have access to, but most importantly, because they are really willing to help,” said Moreno.

Newtopia’s vision for 2030? To invest in 1,000 startups from all over Latin America.

“The region needs more [early stage VCs like] Newtopia, Platanus, 500 … to really transform our reality and take full advantage of the talent and opportunities the digital era presents. Newtopia is our grain of salt.” concluded Mayer.