Country Guide

Panama

Panama
Orlando Reyes

Guest Editor

Orlando Reyes

Co-founder at Wisy

Orlando Reyes has been an entrepreneur since the age of 12, participating in TV commercials as a child star in his hometown Costa Rica and developing several businesses from selling bottles to founding a school for leaders with his family and expanding an AI startup to Silicon Valley. At age 40, after 16 years at large corporations in Panama, he co-founded Wisy, a leading startup in Panama that raised US$1.2 million dollars in angel investment and expanded to Silicon Valley. Orlando is also Director of the Panamanian Association of Business Executives, a board member of the National Entrepreneurship Council and member of Venture Club, the first angel investor club in Panama.


Guest editors are local ecosystem leaders: successful founders, investors, or thought leaders. Have someone in mind? Nominate a country guest editor.

Disclaimer: all content within the Startup Ecosystem Summary and Editor’s Guide sections is written by and reflects the personal perspective of the guest editor. The guest editor is not responsible for content within the Country Snapshot and Community sections, as much of this content is compiled from external sources and does not necessarily reflect the guest editor’s view.

Startup ecosystem summary

Key Startup Cities

Panama, Bocas del Toro, Pedasi

Connected Country Ecosystems

USA, Israel, Central America

Differentiators

  • Hub of the Americas due to its close proximity to the the US (less than 3 hours from Miami) and the Panama Canal
  • China is building the new silk route using Panama as the entry point to Central America with a population of 50 million
  • The average age in Panama is 28 years
  • Panama has one the highest GDP per capita of the region at over $15,000
  • Affordable technical talent: you can hire technical experts at one third of the cost in the US

Challenges

  • Lack of entrepreneurial spirit to build global tech startups
  • Lack of angel investors
  • Lack of successful exits
  • Poor investment in R&D (less than 1% of annual state budget)
  • Outdated educational system

Editor's Guide

Introduction

In the last decade, Panama has experienced one the biggest growths in the region not only because of the expansion of the Panama Canal but also by building infrastructure to connect the Americas. Thousands of immigrants have come to Panama to establish their businesses and take advantage of our weather, infrastructure, connectivity and skilled labor.

In the last 3 years, a group of nearly 30 founders, some of them immigrants, has been able to build startups in Panama together with local entrepreneurs that have high international potential. Most of them have been incorporated in the US using SAFE notes with the idea of giving investors more security, attracting new investors and growing in one of the biggest markets in the world.

This group has been able to attract more than $100 million in angel investment and venture capital from Panama and abroad. Some of them have participated in the well-known Y Combinator accelerator program, and others have been accelerated by Google, Nasdaq and SAP. Startups such as Selina, Encuentra24, Wisy, Cuanto, Criptext, Boxit, Merkadoo, Appetito24 and Degusta are leading the way to set up Panama as a digital hub for the Americas.

Outlook

The ecosystem has the potential to have several unicorns and at least 2 or 3 major exits either being acquired or making an IPO.

For this to happen, we need 3 things to happen: first, the private sector is more aggressive on innovation and works together with startups to solve their biggest challenges. Second, the educational system needs to accelerate the development of talent needed for these startups not only in the technical aspect but also including entrepreneurship, startup lessons and promoting hackathons and grants. Finally, the flow of talent also will be crucial, with startups using Panama as a pilot market and establishing Latin American headquarters there.

Featured Tech Startups

Editor’s choice of the country’s top 10 emerging tech startups.

Startup Showcase

Editor’s pick of which ‘Featured Startup’ is especially worth following and why.

Encuentra24 is a marketplace born in Panama that has expanded to 9 countries. The last expansion came from the acquisition of OLX. It is one of the most visited sites in Panama and the region, serving more than 5 million customers in a market of 100 million people. The site is easy to use and allows a faster connection between sellers and buyers in emerging markets such as Panama, Costa Rica, Dominican Republic and Colombia to mention a few countries. The potential to grow is huge in these countries, which have been undervalued and underserved by other platforms. The need for E-commerce platforms is growing in Latin America, especially because of COVID-19, and Encuentra24 knows it. They recently launched Shoperia, which is like a local Amazon allowing small and medium merchants to sell their products and services in a fast and convenience way.

Focus Industries

Editor’s choice of the industries with the most potential for technology disruption and growth.

AgtechThe global population is rapidly growing. By 2050 there will be 10 billion people. It is well known that traditional agriculture contaminates rivers and also is the reason for 80% of deforestation. Integrating technology into the growing process of food and agriculture is key for a sustainable way of life and reducing the waste of food that is around 25% globally. Panama has a great opportunity with land and water to attract investment and develop technology in this area.
FintechPanamanian banking is very well known around the world since the 1980s. The world has changed a lot since then, and Panama is building a new platform to attract fintech investors and startups to become the fintech hub of Central America.
Shipping/LogisticsThe retail industry is over a 100 year old and most of its processes are changing rapidly. Adding technology, data and artificial intelligence is key for competition. Panama has played a role in the global economy not only with the Panama Canal, but also with the most tonnage and number of vessels registered with its flag. We move the commerce of the world and have the opportunity to translate this advantage into new tech services for the retail industry so that every good that's imported not only arrives on time but is available for consumers.

Talent

Editor’s perspective of the maturity level of talent in the ecosystem.

  • Technical TalentAdvanced
  • Marketing TalentAdvanced
  • Experienced TalentAdvanced
  • International TalentAdvanced

Culture and History

Editor’s commentary on how the country’s culture and history have impacted the ecosystem.

Panama has a long story of commerce. It has been the path between the oceans for more than 500 years with the Camino de Cruces. Tons of gold and stories of pirates are shared from generation to generation. The land of opportunity came then with the construction of the Panama Canal where thousands of immigrants and Panamanians built the canal and created new communities around this marble. That’s why Panama is so diverse and brings together different cultures from Europe, Asia, Africa and every corner in America.

Panama has consistently grown since the US invasion in 1989, which returned democracy to this country and opened new markets and opportunities with free trade agreements around the world. In recent years, the political situation in different countries in the world has made Panama a magnet for new nomads following this dollarized economy and commerce hub.

Interested in becoming more involved in this ecosystem and connecting with local ecosystem leaders? Let us know.

Country Snapshot

Economy

Startup funding
Startup funding
US$10 million (2019)
Standard of living
Standard of living
Global rank: 45
Innovation
Innovation
Global rank: 73 (2020)
Entrepreneurship
Entrepreneurship
Global rank: 70 (2018)
Annual GDP growth
Annual GDP growth
3.0% (2019)
(Global avg. 3.0%)
Ease of doing business
Ease of doing business
Global rank: 86 (2019)
Ease of starting a business
Ease of starting a business
Global rank: 51
Research and development
Research and development
0.1% of GDP
(Global avg. 2.3%)
Contract enforcement
Contract enforcement
Global rank: 141

Sources

Startup Funding: Guest Editor
STANDARD OF LIVING: International Monetary Fund - GDP per capita (PPP)
INNOVATION: Global Innovation Index
ENTREPRENEURSHIP: Global Entrepreneurship Index
ANNUAL GDP GROWTH: World Bank
EASE OF DOING BUSINESS: World Bank
EASE OF STARTING A BUSINESS: World Bank
RESEARCH AND DEVELOPMENT: World Bank
CONTRACT ENFORCEMENT: World Bank

*Updated with latest available data based on listed source.

Society

Population
Population
4.3 million (2020)
Government
Government
Presidential Republic
Stability
Stability
Global rank: 67 (2020)
Internet usage
Internet usage
63.6% (2019)
Smartphone usage
Smartphone usage
N/A
Literacy
Literacy
95% (2018)
Population under 15
Population under 15
26% (2019)
Median age
Median age
29.2 (2018)

Sources

POPULATION: Worldometer
GOVERNMENT: The World Factbook
STABILITY: Global Innovation Index
INTERNET USAGE: International Telecommunications Union
SMARTPHONE USAGE: Newzoo
LITERACY: World Bank
POPULATION UNDER 15: World Bank
MEDIAN AGE: The World Factbook

*Updated with latest available data based on listed source.

Community

Active Investors

Ciudad del Saber (Panama City): Invests in and accelerates early stage startups.

Venture Club Panama (Panama City): Invests in early stage startups and organizes events to connect angel investors with startups.

incubators

Escala LATAM (Panama City)

accelerators

Ciudad del Saber (Panama City)

Startups Raising Capital
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Startups Hiring
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Coworking Spaces/Hubs

EWOffice (Panama City)

My Office Panama (Panama City)

Regus Panama (Panama City)

Selina Panama (Country-wide)

Spaces Panama (Panama City)

Non-Government Organizations

AJOEM: The Association of Young Entrepreneurs AJOEM is a non-profit civil association dedicated to promoting Education and Entrepreneurship in the youth of Panama. The association was born in 2014 under the slogan "Educate yourself to undertake," highlighting the importance of education as a mechanism to empower entrepreneurs and generate sustainable growth.

APIFED: The Panamanian Association of Innovation, Fintech and Digital Economy.

Canal de Empresarias: Canal de Empresarias' mission is to impact the development and growth of businesses led and managed by women, thus reducing inequality between women and men at the business level, improving the performance of these companies, their access to financing and new markets and income.

CAPATEC: In August 2004 , CAPATEC was born, as a result of the initiative of companies in the sector to group and integrate the main actors into a single union with the main objective of promoting and promoting the development of the ICT Industry in the country.

CNC Panama: The National Competitiveness Center (CNC) is a non-profit organization, where in a public-private convergence, the presidents of organizations of the business sector, representatives of the labor sector, businessmen of recognized trajectory and officials of the highest level of the sector participate. Together, in order to make Panama a more competitive country, they promote actions that lead companies to produce more and better, within an appropriate climate for local and foreign investments, thus promoting the well-being of the population.

Universities

ADEN Panama (Panama City)

Fab Lab EcoStudio (Panama City): Fab Lab EcoStudio is an educational space based on technology, design thinking and science, which aims to stimulate creative culture through access to digital and manual manufacturing tools in Panama.

QLU Emprende (Panama City): QLUEmprende is an initiative led by Quality Leadership University to support students and graduates of the university to promote their ventures, and thus contribute to the socio-economic development of the region.

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