Peruvian investors unite, fueling startup growth

And yet in many developing startup ecosystems, funding is sorely lacking, which means startups in developing countries often grow slowly, bootstrapping their way to success or remaining lifestyle businesses.

Back in 2015, when Swiss EP launched in Peru, there were only two angel investor networks funding early stage startups. And, as is often the case, they did not work together and kept their investments close to the vest. Entrepreneurs seeking funding had little visibility into what types of investments these angel networks were looking for or what investment conditions they might expect for seed funding rounds.

Seed stage investment is a core indicator of startup ecosystem growth, and with no baselines or a collaborative approach focused on the ecosystem as a whole, it was impossible to measure success.
As new angel networks emerged, Swiss EP saw the opportunity to connect them with other ecosystem actors. Ecosystem actors started talking. Information flowed. Data became available. Swiss EP fueled the fire of these new connections by facilitating the creation of an association of venture capital organizations, PECAP (Peruvian Seed and Venture Capital Association), and provided space for the now five angel networks to meet on a monthly basis.

PECAP was formally announced in May 2017 at the Residence of the Swiss Ambassador in Peru, and the program has gained steam since. Where information was stuck, it is now flowing. PECAP has started measuring quarterly venture capital activity in Peru, helping both Peruvian entrepreneurs and ecosystem-builders, and provided easy access to free standard legal documentation for seed round investments on its website. And, we are seeing increased collaboration among the investors, with multiple networks/organizations co-investing on a funding round. This means funding for companies that may not have gotten funded otherwise.

PECAP has rapidly become acknowledged as a key member of Peru’s entrepreneurial ecosystem, and has increased its members to 23 organizations, including angel networks, corporates and VCs. As PECAP grows, more early stage startups will get funding, which means more startups will get off the ground and hire employees, scale, go on to raise future rounds, all the way to exit, which in turn creates more early stage investors and promotes economic growth. Supporting PECAP is our mission in action.