The funding of Latin American startups has seen a remarkable surge over the past two years, with capital investments doubling each year. While most of this capital has been directed towards Brazil and Mexico, the ripple effect is starting to be felt in smaller markets across the region.
Peru: A Hotbed for Startups
One country that stands out as having one of the best-performing economies and fastest-growing startup scenes is Peru. In 2019, a new record was set for capital invested into Peruvian startups, with over $11 million raised, representing a 24% increase compared to the previous year. The majority of this funding went towards fintech (47%) and edtech (37%) startups.
Government Support for Startups
The government-backed program Innóvate Perú has played a significant role in supporting Peruvian startups. To date, the program has financed over 3,400 entrepreneurial projects, with more than 25 private institutions accelerating, incubating, and investing in Peruvian startups. This level of support has contributed to the highest rate of startup creation ever seen in Peru.
Impact Investing on the Rise
Peru has also become a hub for impact investing, with local startups addressing critical issues such as education and workforce development. Laboratoria, co-founded by edtech thought leader Mariana Costa Checa, is an exemplary case, having helped over 1,000 women develop technical skills and expand across the region.
Scaling Startups
While new startup creation is at an all-time high in Peru, these companies are outgrowing their angel and seed-stage supporters. As a result, they are now seeking ways to take their ventures to the next level. With more startups emerging from smaller, underserved markets like Peru, there is an opportunity to deploy capital effectively and bring impactful solutions to millions of people across the region.
Angel Ventures: Supporting Latin American Startups
Angel Ventures, a startup investor and advisor, has been at the forefront of supporting Latin American startups. As regional director, Greg Mitchell has witnessed firsthand the growth of the ecosystem and the potential for impact investing in Peru.
Conclusion
The surge in funding for Latin American startups is a testament to the region’s growing entrepreneurial spirit. With governments, private institutions, and investors working together, there is a unique opportunity to deploy capital effectively and drive meaningful change across the region. As Greg Mitchell notes, "Peru has become a hub for innovation, with a strong ecosystem that is ripe for investment."
