When foreigners think of Peru, they usually remember it as the home to Machu Picchu – one of the world’s most historic tourist destinations. But lately, the country has drawn international attention to its increasingly innovative information technology startups. Along with the country’s economic advancement- averaging 5% annual growth for the past 10 years- Peru’s entrepreneurial circle has flourished.
Irina Rymshina, a Russian entrepreneur and IT specialist who is now living in Peru, has worked closely with both Peruvian and Chilean startup programs. She recently told Frontera, “I’ve found that although there is a wider variety of startups in Chile, Peru has become very specialized in informational technology”.
Traditionally, investors in Peru concentrated on companies in more conventional industries such as construction or mining. The creation of innovative startups were almost always motivated by poverty and finding new ways to survive. But slowly, this entrepreneurial direction has changed and is now attracting more international attention.
Seven years ago, Rymshina moved to Lima, the country’s capital, to study in an MBA program there. Soon after graduating in 2012, she and her Peruvian boyfriend founded what is now one of the most popular movie ticket websites in South America, CinePapaya.
“As a foreign entrepreneur, it was tough at first”, says Rymshina. “Unlike more developed countries in the region, Peru is not easily open to foreigners”.
Rymshina says that in the beginning, it was difficult to obtain funding for her projects because the federal grants and programs that were offered to support startups were only available to Peruvians. After achieving success with CinePapaya Rymshina has established her reputation there and even represents the country at international conferences and competitions. But getting there wasn’t easy, she says.
The key to crossing this cultural divide, she says, is to demonstrate your long-term commitment to Peru. “Although people are closed at first, they eventually become warm and happy to help when they realize that you are trying to integrate yourself into their community, and then they help you”, she says.
What Peru lacks, however, is the culture of investment. Rymshina says that, unlike neighboring Chile and Brazil, there are currently no venture capital firms in the country. “At a certain point, start-ups here will have to look abroad for meaningful investment”, she adds. She arrived at this conclusion while working on her latest venture, a startup called Hoope. The company has created a medical device that enables rapid and painless testing for the four most common and curable STDs. She started the company with Mexican engineer Ernesto Rodriguez Leal and Kazakhstani biotechnologist Damel Mektepbayeva.
Hoope’s mission is two-fold; it greatly increases both accessibility and affordability of testing for common STDs, and also works within communities to remove the pervasive local stigma that surrounds STD testing and treatment. For US$ 50, the product includes two refill cartridges and downloadable software with useful information on the diseases.
Peru’s growing ecosystem of information technology professionals has aided in Hoope’s software development. However the company’s founders have frequently needed to travel to other countries to access medical labs, tools, and biotechnology experts for the device.
“There is a huge need for this kind of medical technology in Peru, and in Latin America in general”, says Rymshina. “But due to a lack of investors here, we may need to launch in the United States first. And for us to move forward, we now need big investors, which we have to look elsewhere for”.
Hoope’s founders have managed to secure seed funding from several grants in countries such as Mexico, Korea, and Chile. This year, they were accepted into the Startup Peru program, a government initiative to support innovative Peruvian companies.
Over the past few years, the Peruvian government has astutely provided research and development grants to innovative local companies. For example, in 2013 the government allocated US$ 20 million to the Startup Peru program. This initiative follows in the footsteps of Startup Chile, which invests as much as $40,000 to help entrepreneurs from around the world relocate to Chile and finish their project there.
Startup Peru offers up to US$ 20,000 in grants to individual entrepreneurs, and US$ 50,000 to technology companies. Unlike its counterpart in Chile, the program is not yet open to foreign entrepreneurs; however, Rymshina believes that an evolution in this direction will happen. The program hopes to fund over 200 companies within the next five years.