Country Overview

Country Overview- Peru

Peru
by poppypurvis 0

Quick Summary 

  • High demand for tech startups in the country
  • 6th largest economy in Latin America and the Caribbean
  • One of the fastest-growing startup scenes in Latin America according to TechCrunch
  • Lots of opportunities to obtain seed-stage capital

Peru at a glance 

Population:  32.5 million
Languages: Spanish, Quechua, Aymara
Average cost of living:  US$2000 per month (depending on the city)

  • Rent: US$700
  • Living cost per month: US$1000

Pros

Cons

  • Relatively low cost of living 

  • Low rate of inflation

  • Fast growing economy

  • Various opportunities to tap into

  • Relatively low levels of innovation.

  • Lack of tax and visa incentives

  • Nascent startup scene with many programs led by universities 

Why Peru? 

Peru has one of the best performing economies in the region. According to LatamList, Peru received over US$11 million in startup investment in 2019. Between 2016 and 2020 over US$22.7 million in public funds was spent on startup related activity, according to TechCrunch. In addition, there is currently a high demand for tech startups- making it an ideal market to enter. Nonetheless the startup ecosystem is still rather nascent with various universities leading the push for innovation, specifically in the incubation and acceleration stages.

Venture capital in Peru in 2020 only comprised of 0.05% of the country’s GDP according to the OECD report.

Nonetheless the country boast one of the fastest growing startup scenes in Latin America and it could be a good time to get one’s way into the market before it blossoms further.

Government Programs

The government is actively involved in the startup community in Peru. Government support includes StartUp Perú a program run by the National Innovation Program for Competitiveness and Productivity. The program offers support, funding and competitions to startups with innovative, dynamic, and high impact ideas.

Over the past few years, more public funds have went into startup-related projects as well with the government-backed program Innóvate Perú actively involved in awarding grants to budding startup projects – take for instance the project of developing wheelchairs especially designed for kids. The country also have various funds available for startups to apply for which includes FIDECOM, MIPYME and more.

To date, the Innovate Peru had financed over 3,400 entrepreneurial projects.

In addition to the government programs, MIT‘s Regional Entrepreneurship Acceleration Program is also actively participating in the city of Lima by helping regions accelerate economic growth and promote social progress through innovation-driven entrepreneurship. Participants take part in a two-year learning engagement. The process involves 5–8 leaders from 5 key stakeholder groups (government, risk capital, universities, entrepreneurs and corporates).

Incubators and Accelerators

According to Crunchbase there are currently over 25 organizations investing in, accelerating, and incubating startups in Peru. The agtech, edtech and fintech markets have a particularly high growth potential for startups looking to operate in Peru. All universities in Peru legally have to offer a space for incubation which helps to grow and nurture the next generation of startup leaders.

In Peru, the area of fintech is an important area of focus. As such, it is not surprising that the country places high importance on fintech events such as The Lima Fintech Forum that allows participants to take part in talks, networking, and workshops about the fintech industry. It is one of the main fintech events in the region which helps to promote Peru’s fintech ecosystem as well while the Fintech Unconference Lima is an annual private event that gathers startups and scaleups. The event allows participants to engage in workshops and other activities.

Venture Capital  

According to TechCrunch Peruvian development bank COFIDE announced a fund investing in venture capital firms in 2019. Among the support offered by COFIDE, are the COFIGAS and BIONEGOCIOS programs, which aim to achieve important social and environmental impacts.  The programs are aimed at entrepreneurs with new projects and SMEs with initiatives related to energy efficiency (EE) and renewable energy (RE).

Once a year, PECAP, the Peruvian Association of Seed and Venture Capital, hosts the Peru Venture Capital Conference, bringing together entrepreneurs, investors, and businesses. Although VC funds pales in comparison to the other countries in Latin America, many international VC firms have started to take notice of Peru’s potential and within PECAP are also various international VC firms from the US and other parts of Latin America.

If you’re interested in more Peru-related information, please click here.

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