ImpactAlpha, June 8 – Here’s a statistic that may surprise you: One in four working-age individuals in Peru was involved in an early-stage company last year. A growing number Peruvian startups are using innovation to drive social progress and economic inclusion.
A country famous for its world class culinary concoctions is now serving up a new recipe: a healthy entrepreneurial ecosystem—and one taking aim at inclusive growth. Thanks to its fast-moving economy, active government support, and increasing international investment, Peru now hosts a thriving startup scene.
Peru’s startup economy appears to be playing a role in improving the nation’s overall social development. Correlations can be seen between an increase in startup funding and tech education, and a reduction in poverty. A rise in poverty this year due to political instability was an exception; Peru’s poverty rate declined over the last decade from 55 percent to 21 percent, and extreme poverty rates decreased from 17 percent to four percent.
By creating more job opportunities, tackling social issues and honing in on local skills and strengths, the Peruvian startup ecosystem is directly and indirectly helping a large percentage of its population.
Peru has had one of the fastest growing economies in Latin America in recent years and has seen a shift away from mining toward toward investment in innovation. Jobs have followed the tech-driven shift.
Fast economic growth often leads to gaps in prosperity but government support for entrepreneurs has led to numerous job opportunities, which have begun to close the gap. StartupPeru, a government-backed initiative to jumpstart entrepreneurial activity, has backed hundreds of projects, generating close to 2,000 jobs.
Kickstart Peru Seed Fund, an early stage VC fund associated with Alta Ventures and launched in partnership with the government, has backed nine companies (including Arrivedo). To catalyze investment activity, the Ministry of Production is funding the operations of venture capital funds. The ministry will provide 10 high-impact projects with around $500,000 each over the next two years, with a goal to reach 50 projects in five years and create over 5,000 quality jobs.
With lower living and administration costs and thriving incubators and accelerators, Peru’s startup infrastructure is reeling in foreign investment. A greater number of international early-stage companies are choosing to call Peru home, which creates more jobs for locals. Blazing DB, a startup that helps enterprises manage data, started with a small team of Peruvians and Americans in the U.S., and has since opened an office in Peru.
Peruvian startups are also providing locals with the skills and knowledge needed to access startup sector jobs. Crehana, an online training platform for creative and digital professionals, helps Peruvians of all ages and identities access the region’s digital economy.
Accelerators Wayra Peru and Startup Peru have an extensive portfolio of startups. Many aim to benefit their immediate community and foster inclusive growth by offering education, women’s rights support and financial services to the unbanked.
Laboratoria, a coding academy founded by social entrepreneur Mariana Costa in 2014, is tapping into Peru’s underused pool of female talent, ensuring young women get opportunities to launch tech careers.
Peru’s fintech initiatives are on the rise. Startups such as TasaTop and LatinFintech are encouraging greater financial inclusion for a large majority of Peru’s population and beginning to secure international connections. Latin Fintech, which provides online consumer loans, was selected by Google last October for its new Campus Latam Exchange Founders program.
The innovation economy is finding new opportunities in traditional Peruvian industries: hospitality and food. At Arrivedo we use our homegrown knowledge of hospitality to support hoteliers around the world. Our online platform connects hotels with guests and allows travelers all around the world to learn from locals about what to do during their stay.
As Peru cements its position as an entrepreneurial hub in Latin America, the country should see greater efforts and resources invested in these already successful mission-driven startups. With the table set, Peru’s startup ecosystem is putting inclusive growth on the menu.
Alonso Franco is a hospitality entrepreneur and the co-founder of Arrivedo, an online platform with curated content of things to do around hotels.