The megacity Lima is the hotspot for top innovative startups in Peru.
When we hear about locations of innovation and entrepreneurship in Latin America, countries, such as Chile, Argentina and Colombia usually come into one’s mind. Technology Reporter Cadie Thompson from CNBC is one of those, who consider the “Chilecon Valley”, Santiago de Chile, Buenos Aires and Medellin to be the most popular destinations for start-ups and business formations, and deservedly so.
In the past, especially Argentina has driven innovative thinking, being home to some of the largest start-ups in Latin America, including the online travel agency Despegar.com and online marketplace MercadoLibre that are present all around the continent, including the Caribbean countries.
In the past, especially Argentina has driven innovative thinking, being home to some of the largest start-ups in Latin America, including the online travel agency Despegar.com and online marketplace MercadoLibre that are present all around the continent, including the Caribbean countries.
Nevertheless, there is one country other than the ones mentioned above that shines brightly in Latin America’s startup economy, Peru.
Peru has become one of the most attractive locations for foreign businesses thanks to public policies in favor of foreign investment. This is one of the main reasons why Peru is expected to be the second fastest growing economy in Latin America (behind Paraguay) with an annual GDP growth of up to 3.8% until the year 2020, according to the World Bank Group. The consequence is that more and more start-ups will emerge, assisting to make Peru one of the most innovative countries on the continent.
Before going into detail about the main start-up players in Peru, we will shed more light on Peru’s economy and the ease of doing business here.
What Makes Peru’s Economy So Great And Unique?
In the past decades, Peru has immensely changed its economic structure, directing it towards the service sector, especially in the areas of finance and telecommunications. Still, the country keeps developing its most important sector, the mining industry, which makes up most of the country’s exports and attracts the largest proportion of foreign direct investment.
Currently, Peru is the world’s third largest producer of copper and zinc and one of the most important gold and silver manufacturers. The well-developed legal and tax system support the mining industry in a very favorable manner. Additionally, tourism has been gaining momentum in Peru, welcoming approximately 4 Million tourists annually. For this reason, infrastructure has been further improved and the world-renown Peruvian cuisine is further commercialized to offer a unique national experience.
Due to high GDP growth and increasing participation of foreign investors, social conditions are improving, including declining poverty and unemployment rates. These advantageous economic conditions give a reason for foreign or local investors to start a business in Peru. Not surprisingly, the World Bank Group estimates that Peru is the 58th easiest country to do business in worldwide due to great ease of getting credit and high protection for minority investors, among other reasons.
There are more and more start-ups developing in Peru that fuel innovation. Thus, we want to clarify the main Peruvian start-up sectors and the main players in each sector that are making a great impact on their respective markets.
What are the most important start-up sectors in Peru? As depicted in previous parts of this article, Peru can be distinguished from other Latin American countries due to its unique and diverse business sectors that provide a creative space for entrepreneurs desiring to do business here. Many start-ups, therefore, try to engage traditional sectors that drive the Peruvian economy while also participating in technological innovation and modernization.
The first sector of Peruvian startups that gain more and more start-up participation is agriculture and the field of gastronomy. Since Peru is blessed with an abundance of natural resources, entrepreneurs try to take the opportunity to extend this market with new products and services and to facilitate agricultural processes.
The last and arguably most important main start-up sector in Peru is the financial technology (FinTech) that intends to cover the missing customer attention and transparency of the major banks. Many financial solutions are incorporated into the financial market to satisfy customer needs through personalized services. For example, Solven, an online startup that connects interested borrowers with financial institutions who issues loans online.
Who Are The Main Start-Up Players?
Some of the key start-ups in the agricultural, food and gastronomy sector are YAQUA and Spacedat. YAQUA is a high-quality and healthy tap water provider. What is special about this start-up is that if you buy their water, you support projects in some of the poorest regions of Peru. Overall, YAQUA already invested an amount of nearly S/ 570,000 Soles, supporting more than 1300 persons.
Spacedat is an AgTech start-up that targets the central planning of agricultural fields through the help of drones and satellites. Thanks to the Internet of Things (IoT), fields can be digitalized and important data extracted, making processes more efficient.
On the other hand, some of the most significant Peruvian start-ups are platforms, including Crehana and DevCode. Both are e-learning platforms for professionals and developers, respectively, aiming at creating a social network of users from the same field of work. In addition, the online platform Turismoi has a great impact on tourism industry by connecting tourists to a large supply of local activity providers in Latin America and Spain.
In the field of FinTech, particularly one start-up made a considerable impact, namely the online payment service CULQI. With this financial platform, payments with, for example, VISA and MasterCard can be executed safely, helping firms and individuals to have a transparent and intelligent overview over their finances.
Generally, Peruvian start-ups may emerge in those 3 main sectors but, still, entrepreneurs might engage in other business areas, as well, depending on where market niches arise. One of the best examples is the start-up Biz Latin Hub, a local company that provides bi-lingual back-office services to principally foreign businesses looking to commercially enter the Peruvian market.
To Conclude...
As summarized by the online news magazine TGDaily in their article “An introduction to Latin American Business”, start-ups will continue making a significant impact on the Peruvian and Latin American markets because of high convenience, a high satisfaction rate, a welcoming business environment and improving infrastructure. There is a great amount of potential still to be discovered and exploited, which could make Peru one of the most important entrepreneurial hubs of Latin America for top startups.
I hope you enjoyed this article about the startup scene in Peru and the key players in business having an impact on the economy.
Interested in more articles about international business?
Read My Related Posts:
- How Non-Residents Can Invest In Indian Companies
- Business Growth Sectors In Morocco
- Tips To Finance Your Home In The UAE
More Bootstrap Business Blog Below
