Our thoughts on the shift from scattered talent to strategic capability, and how firms are executing it.
The Problem Has Changed
Private equity portfolio companies don’t need more engineers. They need the right ones, in the right place, at the right cost. Today’s landscape is shaped by two structural forces:
- AI is reshaping engineering demand: Foundational coding is increasingly automated. The need for junior “code factories” is shrinking. What PE-backed firms now need is senior, product-adjacent talent, people who can collaborate directly with business teams and iterate fast.
- M&A growth leads to organizational sprawl: Many portfolio companies scale quickly through acquisition but are left with fragmented, inefficient tech teams, spread across geographies, tools, and cultures. Delivery slows. Costs rise. Central control is lost.
The Strategic Question… How do you centralize talent, speed up delivery, and cut cost, without losing control or IP?
Our answer and now a reality… Mexico
Operating partners and CTOs are converging on the same strategy: Build nearshore tech hubs in Mexico, not as a vendor solution, but as a core capability.
Why Mexico? This is no longer just a cost-saving move. It’s a competitive one.
- 60% cost savings vs. U.S. hiring
- 300K+ bilingual engineers, trained for cross-functional, product-aligned roles
- Same time zones as U.S. HQs (Central & Pacific)
- 700+ daily flights between U.S. and Mexico, <3h from most cities
- IP security under USMCA + strong compliance infrastructure
- GCCs projected to grow 160% globally in next 5 years (Everest Group)
Mexico’s GCC Landscape
Mexico now hosts 250+ Global Capability Centers (GCCs), concentrated in:
- Mexico City: product, engineering, and back-office
- Guadalajara: cloud, embedded systems, and digital
- Monterrey: data, analytics, DevOps, and finance
Companies already operating here:
Walmart, Capital One, The Home Depot, McDonald’s, Pinterest, Etsy, Zillow, Uber, and more. These aren’t call centers. They’re core tech and product hubs, with real ownership and measurable output.
What We’ve Seen Work (Codifin’s POV)
At Codifin, we help PE-backed companies build tech teams in Mexico, fast, securely, and strategically.
Here’s what we’ve delivered:
- 58% reduction in tech spend
- Centralized fragmented tech orgs post-M&A
- 4x faster hiring speed, time-to-fill down from 14 days to 3 business days
- Hiring ratio improvement, from 10:1 to 3:1
- Higher engineer promotion rates, 4x vs. other markets (E.g. India Hubs)
- All talent pre-vetted and managed by Codifin, no third-party vendors
This is full-stack execution: sourcing, onboarding, legal, retention, payroll, and compliance; All under one roof.
Delivery Models That Win
Top-performing portfolio companies are choosing ownership over outsourcing.
Two delivery models stand out:
- Build-Operate-Transfer (BOT): A trusted partner launches and operates a nearshore tech hub — handling HR, compliance, equipment, and delivery. After 12–24 months, ownership transfers to the client.
- Best for: Mid-size portfolio companies wanting speed now + internal control later.
- Benefits: Fast time-to-launch, lower upfront risk, full IP & team transfer on exit
- Ideal for 20–50 headcount scaling plans
- Global Capability Center (GCC): The company builds and runs its own fully owned legal entity from day one, a strategic extension of HQ.
- Best for: Larger orgs planning 50–200+ headcount in Mexico.
- Benefits: Full ownership and retention from day one, long-term integration and post-M&A consolidation, stronger valuation through operational leverage
Both models outperform traditional staff augmentation and outsourcing on cost, control, and capability.
Why This Isn’t Just a Talent Play
Mexico’s rise as a tech hub is being validated by the world’s largest investors:
- AWS: $5B data center cluster in Querétaro, cloud, and AI.
- Salesforce: $1B investment to scale AI adoption nationwide
- Mercado Libre: $3.4B planned for 2025, product and fintech
- Ben Horowitz × President Sheinbaum: Signals Mexico’s bet on advanced tech and U.S. VC relationships
Market Growth
Mexico’s IT/software market grew from $11.6B in 2020 to $17.3B in 2023, a 49% jump.
Why It Matters to PE Firms:
- Global players are showing long-term conviction in Mexico’s tech sector
- Infrastructure (cloud, data, AI) is expanding fast
- High-skill demand is surging, and supply is here
- Investing in Mexico now aligns your portfolio with future-ready ecosystems
Macro Trends Accelerating This Shift
- 60% of orgs expect to increase direct sourcing (SIA)
- GCC adoption up 60% over next 5 years (Everest Group)
- Internal mobility rising, LinkedIn reports +6% YoY
- AI shifts hiring focus to senior, agile, integrated talent, not junior offshoring
The Opportunity for Operating Partners
- Building tech teams in Mexico is no longer just a “cost lever.” It’s a path to:
- Centralized, scalable talent
- Faster product cycles
- Lower G&A
- Higher retention
- Cleaner org structures for exit
If You’re Planning for 2025
Whether you're launching a 5-engineer test team or scaling a 100+ person capability center, the infrastructure, talent, and models exist.
Codifin can help you:
- Design the right strategy
- Execute fast and compliantly
- Own the team, the IP, and the upside
