Country Guide

Peru

Peru
Gonzalo Villaran

Guest Editor

Gonzalo Villaran

Resident Advisor at Able

Gonzalo Villaran is a pioneer of the startup ecosystem in Lima, Peru. He led the creation of the first business angel network in Peru (Peru Capital Network), managed the first accelerator (Wayra Peru), and has been instrumental in the advancement of public policy at a national level. Gonzalo continues to help grow the Peruvian tech community, leading research and programs around the development of an ever evolving and inclusive ecosystem.


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

Lima

Connected Country Ecosystems

Chile, Mexico, Colombia, U.S.

Differentiators

  • A connected city of 10 million people–Lima
  • Growing middle class
  • Young population
  • A great market to test ideas for Latin America

Challenges

  • Lack of experienced founders
  • Lack of foreign investment

Editor's Guide

Introduction

The economic success of Peru in recent years (25 years of continuous growth at an average rate of 4% per year) has been fundamentally supported by its main extractive industries (mining, energy, fishing) and lately by the growth of agro-industry. This has led the country in a virtuous cycle where service and commerce industries have seen a growing internal demand. This internal demand is today encouraging the creation and growth of startups that provide services to industrial sectors and products to the consolidating middle class in Lima, a coastal city by the Pacific Ocean made up of 10 million people. Lima is a strong testing ground and has the potential to be a great startup hub.

Although Peru came in late to the startup game, public policy agencies have been able to learn from neighboring countries, especially in the Alianza del Pacifico, and applied the ones that made sense for the local ecosystem. Therefore, the startup ecosystem in Peru has grown fast and in the right direction. In that sense, Startup Peru (SUP), a government program that provides seed funding for startups and funding for other stakeholders of the local ecosystem, has been a key actor for investment in the ecosystem. For every dollar invested through SUP, 3 dollars are invested from private stakeholders (accelerators, angels, VCs, Corporate VCs). 

The appetite for startup investment is growing in Peru, with an increasing number of investments in startups happening every quarter. In 2018 and 2019, SUP provided funding to 109 and 84 local startups respectively, while in 2018 there were 24 private investment deals adding US$9.1 million dollars; in Q1 2019 there have already been 12 deals adding US$6.6 million dollars with more than 60% of those funds coming from international investors. Peru is also in a good position to receive international entrepreneurs through the Startup Peru Plug program, where they can receive public funding (no equity) and access to the local ecosystem through the network of accelerators that are part of SUP. Most of the startup activity happens in Lima, although cities like Arequipa, Trujillo and Piura have proven to foster very good talent.

Outlook

Lima’s startup ecosystem is in an initial growth stage, with regular ecosystem events happening every weekend led by the ever expanding group of founders and ecosystem leaders. Support comes in diverse ways with initial funding from government and incubators or accelerators that are present (by law) in every university. The startup community is also supported by entrepreneurial groups that are keen to communicate activities happening in the ecosystem (i.e. Peru Emprende, a network of actors of the ecosystem that hold biweekly meetings). Events like the Peru Venture Capital Conference (held every last quarter of the year) gathers between 700 and 900 entrepreneurs, investors and corporations that gather to meet and listen to international speakers/founders share some of their wisdom.

The sum of these and other initiatives has set the stage for an ever growing number of young entrepreneurs applying their ideas in the market and forming new startups constantly. As an example, more than 1 000 teams applied for government funding in 2019, and only around 80 will receive it. 

A key opportunity for the ecosystem is to focus on some of the comparative advantages that Peru has, for example around biodiversity. The growing number of agritech companies working with agroindustrial corporations is a good sign of the collaborative culture that the local ecosystem is showing. Examples are also found in the fintech and edtech sectors.

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.

Space AG is a data driven startup that is rocking the local ecosystem. The company provides an integrated platform for the agricultural sector, combining data from infrared and thermal images captured by drones and satellites, ground sensors data, and other farmers’ information. Their focus has been on intensive agriculture (i.e. high-value, high-nutritional crops that are staples of the Peruvian export agro-industry including blueberries, grapes, avocados). In the last 2 years, Space AG has developed Artificial Intelligence models that are helping their clients make better decisions in maximizing their yields and optimizing resources like water, fertilizers and pesticides. Space AG is led by a fantastic team of business and technical founders, and has recently raised funding from an international venture capital firm specializing in agtech and from a group of strategic agriculture companies with global operations.

Focus Industries

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

AgtechWith agricultural products representing about 20% of Peruvian exports (almost US$10 billion) and a growth rate above 4% every year, the big agro-industrial companies are looking at more opportunities to invest in technology that would help their operations become more efficient. Agtech is therefore destined to grow in the local market.
EdtechThe educational system is due for a change globally and especially in a country like Peru, where only 4 in 10 people have access to universities. Of those, only 7 in 10 graduate. Added to this, the quality of education that they receive is quite low, reducing their probabilities of finding suitable jobs. Edtech and the many types of education solutions that it offers might be a solution for many of these students.
FintechLatin America in general is a great market for fintechs as a big portion of small businesses and people have not had access to traditional financial institutions. In this sense, local fintechs and banks have been engaging in diverse partnerships, including a couple of investments.

Talent

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

  • Technical TalentModerate
  • Marketing TalentModerate
  • Experienced TalentUndeveloped
  • International TalentModerate

Culture and History

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

The roots of entrepreneurship in Peru can be in part attributed to events that changed the country in the early 1980s. Terrorism from extreme leftists movements against Peruvians in the Andes led to a massive migration to the capital, Lima. Available jobs were not sufficient as the Peruvian economy was in deep trouble with hyperinflation from bad economic policies, so a perfect storm was set for entrepreneurship as a livelihood.

Today things have changed in the country. The economy is booming and security concerns are not related to terrorism anymore. In fact, entrepreneurship is rising and some of our foremost artists (chefs–Lima is known for its amazing food) have become some of the best entrepreneurs in the country, leading to the creation of Peruvian multinational corporations that are top rated in the world. The challenge becomes translating the Peruvian entrepreneurial spirit to technology advancement.

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

Community

Active Investors

Angel Ventures (Lima): An industry agnostic firm investing in seed stage and Series A stage companies. (Source: Angel Ventures)

Ataria Ventures (Lima): An early-stage investment firm. (Source: Ataria Ventures)

BBCS Capital (Lima): An angel investment network.

Capia Ventures (Lima): An industry agnostic investor funding Series A stage companies. (Source: Capia Ventures)

Endeavor Catalyst Peru (Lima): Catalyst is Endeavor's investment fund designed to support Entrepreneurs during their financing rounds, contributing to the long-term sustainability of the organization. In addition, it invests jointly with venture capital funds and individual investors in the capital raising rounds of Endeavor Entrepreneurs. (Source: Endeavor Catalyst)

INCA Ventures (Lima): A Peru based Venture Capital fund affiliated with Inca Investments. (Source: INCA Investments)

Outbound Ventures (U.S.): A seed fund focused on consumer startups and companies in the Edtech sector. (Source: Outbound Ventures)

PAD - Red de Inversionistas Ángeles (Piura): An angel investor network associated with the Universidad de Piura. (Source: PAD - Red de Inversionistas Ángeles)

Salkantay Partners (Lima): An investor focused on education, technology and other high impact sectors. (Source: Salkantay Partners)

The Board Peru (Lima): An industry agnostic venture capital firm. (Source: The Board Peru)

Winnipeg Capital (Lima): An institution led by Milko Ibanez with business units in the areas of Corporate Finance, Asset Management, Capital Markets and Multi-Family Office. It focuses on Edtech companies and typically invests at the Seed stage. (Source: Winnipeg Capital)

incubators

1551 (Lima): The incubator of the Universidad Nacional Mayor de San Marcos. (Source: 1551)

BioIncuba (Lima): The incubator of the Peruvian University Cayetano Heredia. (Source: BioIncuba)

EmprendeUP (Lima): An incubator associated with the Universidad del Pacifico. (Source: EmprendeUP)

Endeavor Scale-Up Peru (Lima): The Scale-Up Program seeks to select, support and accelerate technological enterprises at an early stage through training entrepreneurs and bringing them closer to mentors of the Endeavor network, as well as sources of capital. (Source: Endeavor Scale-Up)

HUB UDEP (Piura): The business incubator of the University of Piura. (Source: HUB UDEP)

Incubadora PQS (Lima): The incubator of the Romero Foundation. It offers co-financing, with Non-Refundable Resources (RNR) of up to PEN50,000, to validate innovative business models. (Source: Incubadora PQS)

Incubagraria (Lima): The incubator of the National Agrarian University La Molina. (Source: Incubagraria)

KAMAN (Arequipa): The incubator of the Universidad Católica San Pablo de Arequipa. (Source: KAMAN)

StartUPC (Lima): The Business incubator of the Peruvian University of Applied Sciences. It offers specialized services for each startup through its Ideas Validation, Incubation and Softlanding programs. (Source: StartUPC)

StartupUNI (Lima): STARTUP UNI is the technology-based business incubator of the National University of Engineering. (Source: StartupUNI)

Zegelab (Lima): Zegelab is the business incubator of Zegel Ipae that started to promote and develop innovative ideas of its students and alumni to turn them into thriving businesses based on product, process, service or marketing innovations. (Source: Zegelab)

accelerators

LIQUID Venture Studio (Lima): A 24-week accelerator program.

Seedstars Lima (Lima): Offers co-working space at Seedspace Lima and discounted access to some of its tested SAAS tools (together valued at $20,000), and US$15,000 cash investment. (Source: Seedstars Lima)

Startups Raising Capital
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conferences

GAN Momentum Tour: Lima (Lima): The GAN Momentum Tour is a five-stop global tour that will focus on creating opportunities for startups to succeed and gain traction, wherever they are. (Source: GAN)

Peru Venture Capital Conference (Lima): Peru VCC connects Peruvian innovators and entrepreneurs with local and international investors. More than 900 attendees, 300 startups and 250 investors and corporations. (Source: LAVCA)

meetups
Government Programs

Fondecyt: FONDECYT stands for the National Fund for Scientific, Technological and Technological Innovation Development, an initiative of the National Council of Science, Technology and Technological Innovation (CONCYTEC) responsible for capturing, managing and channeling resources in co-financing to natural and legal persons who they conform the National System of Science, Technology and Technological Innovation (SINACYT), destined to the formation of highly specialized human resources and to the development of scientific research, the technological application of knowledge and its introduction to the market, and to the attention of social needs. (Source: Fondecyt)

Start Up Perú: StartUp Peru is an initiative of the National Innovation Program for Competitiveness and Productivity - INNÓVATE PERÚ, of the Ministry of Production, which includes seed capital and scaling contests for innovative, dynamic and high-impact ventures. Startup Peru is a tool, and at the same time an opportunity for innovative entrepreneurs to have a way and a means to carry out their business ideas of high added value that contribute to the development of the country. (Source: Start Up Perú)

Non-Government Organizations

PECAP: Provides data on capital investment in Peruvian startups and promotes ecosystem growth. (Source: PECAP)

Tech Publications

Contxto Peru: Latin America's go-to site for tech and startup news. (Source: Contxto)

Country Snapshot

Economy

Startup funding
Startup funding
US$3 million (2018)
Standard of living
Standard of living
Global rank: 103
Innovation
Innovation
Global rank: 76 (2020)
Entrepreneurship
Entrepreneurship
Global rank: 67 (2018)
Annual GDP growth
Annual GDP growth
2.2% (2019)
(Global avg. 3.0%)
Ease of doing business
Ease of doing business
Global rank: 76 (2019)
Ease of starting a business
Ease of starting a business
Global rank: 133
Research and development
Research and development
0.1% of GDP
(Global avg. 2.3%)
Contract enforcement
Contract enforcement
Global rank: 83

Sources

Startup Funding: LAVCA
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
33.0 million (2020)
Government
Government
Presidential Republic
Stability
Stability
Global rank: 87 (2020)
Internet usage
Internet usage
60.0% (2019)
Smartphone usage
Smartphone usage
32.1% (2018)
Literacy
Literacy
94% (2018)
Population under 15
Population under 15
25% (2019)
Median age
Median age
28.0 (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.

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