At Expo 2020 Dubai, the American financial services firm JP Morgan Chase revealed in its latest study, which were the most stable Latin American countries and that represent a lower risk for investments. After analyzing seven Latin American countries (Peru, Venezuela, Argentina, Mexico, Brazil, Colombia, and Chile), the study concluded that for this year, Peru is the best Latin American country for investment.
Foreign investment is taking Latin America more and more seriously. The financing of startups in the region has doubled in the last two years, with Mexico and Brazil being the countries that have managed to attract more capital. However, for JP Morgan, the Latin American nation that offers the best conditions for investment today is the Republic of Peru, at least in terms of risk and stability.
The JP Morgan report was presented at Expo 2020 Dubai, where the South American nation has had the opportunity to show the country as an attractive destination for tourism, commerce, and investment. In the Peruvian Pavilion of Expo 2020, visitors can learn more about the growth, sustainability, and resilience of this country.
The study measures the level of risk in different countries, based on JP Morgan’s Emerging Market Bond Index. The analysis placed Peru as the country with the lowest risk, compared to six other countries: Venezuela, Argentina, Mexico, Brazil, Colombia, and Chile.
The Peruvian government has worked to be investment friendly
Peru has highlighted in this study due to the effort of the Peruvian government, which has implemented strategies to make Peru an attractive investment nation.
Peru has been one of the fastest-growing economies in recent decades, the product of consistent economic policies that have been implemented as a measure to stimulate investment in the country. As a result, millions of jobs have been created in a few years.
Currently, Peru has an extensive network of trade agreements with several countries in the world. This network has created opportunities to develop exports and business. These actions show Peru as a country concerned with bringing its products to the international market, in addition to showing the opportunities that exist in its domestic market, helping to reduce costs for its consumers and local production.
Among Peru’s most prominent products are its superfoods, such as alpaca fiber and quinoa. On this shelf, many people have had the opportunity to meet unique Peruvian products in various fields, such as agricultural products, handicrafts, and gastronomy. In this way, the South American country seeks to take advantage of the increase in demand from the Middle East to increase its exports.
Peru is the third-largest country in South America and one of the 20 most extensive in the world. The Peruvian area is larger than that of Spain and France together. As a consultative member of the Antarctic treaty, he maintains a station called “Macchu Picchu” on that continent.
Investments in startups will continue to multiply in Peru
Peru set a new record in capital invested in Peruvian startups in 2019, who received at least $ 11 million during 2019. This figure meant an increase of 24%, compared to 2018. Most of these investments were directed to startups in the fintech and of the EdTech.
By 2020, Peru hopes to break this mark again with the government program Innóvate Perú. This initiative will offer $ 13.8 million of your total investment for new startups. Forecasts suggest that capital venture investments will exceed $ 25 million, doubling what was achieved in 2019.
In 2019, the development bank of Peru, COFIDE, announced a new fund of funds to invest in venture capital companies, imitating the models of other countries, such as CORFO of Chile, Bancoldex of Colombia and NAFIN of Mexico.
Government support to entrepreneurs has stimulated the development of the startup ecosystem in the country. The number of Peruvian companies formed in acceleration programs is increasing. Local investors have supported the Peruvian Seed and Venture Capital Association, PECAP, to share investment opportunities and establish a solid foundation for venture capital in Peru. Here is a look at some of the possibilities for more venture capital to intervene.
Investments in startups will continue to multiply in Peru
Peru set a new record in capital invested in Peruvian startups in 2019, who received at least $ 11 million during 2019. This figure meant an increase of 24%, compared to 2018. Most of these investments were directed to startups in the fintech and of the EdTech.
By 2020, Peru hopes to break this mark again with the government program Innóvate Perú. This initiative will offer $ 13.8 million of your total investment for new startups. Forecasts suggest that capital venture investments will exceed $ 25 million, doubling what was achieved in 2019.
In 2019, the development bank of Peru, COFIDE, announced a new fund of funds to invest in venture capital companies, imitating the models of other countries, such as CORFO of Chile, Bancoldex of Colombia and NAFIN of Mexico.
Government support to entrepreneurs has stimulated the development of the startup ecosystem in the country. The number of Peruvian companies formed in acceleration programs is increasing. Local investors have supported the Peruvian Seed and Venture Capital Association, PECAP, to share investment opportunities and establish a solid foundation for venture capital in Peru. Here is a look at some of the opportunities for more venture capital to intervene.
Fintechs, Peru’s favorite startups
Among startups, the fintech sector has had a significant boom in Latin America. This industry could exceed $ 150 billion by 2021. The vast majority of startups are in Mexico and Brazil, but the sector is also developing in Peru. This country hosts approximately 120 fintech startups. Peruvian startups actively address the problems of financial inclusion, in addition to seeking to improve the service of small and medium enterprises in the region. A few startups have begun to attract international attention. For example, in 2019, Peruvian Fintechs Keynua and Apurata were selected for the Y Combinator accelerator program.
Impact Investment Opportunities
Latin America is a major destination for impact investment capital, surpassing many other regions of the world, with a compound annual growth rate of 15% over the past five years, according to the Global Impact Investment Network. Edtech represents a rising entry point throughout the region for impact investors thanks to its potential for both financial and non-financial profitability.
According to an OECD report, approximately 30 million young people in Latin America do not participate in any form of education, training or employment, and 76% of this total are women. Laboratorio, co-founded by EdTech thought leader Mariana Costa Checa, helps women develop technical skills and has expanded throughout the region from its headquarters in Lima to train more than 1,000 women so far. The startup has received praise from global companies, including Walmart and Facebook. In 2019, the Crehana skills development platform lifted the most extensive round for a Peruvian startup ($ 4.5 million) of regional and global funds.
Peru attracted more impact investment capital than Mexico for the first time in 2018. Much of this investment is focused on improving Peru’s education system. New local businesses are addressing everything from early childhood education to workforce training. As more success stories emerge, more resources will be needed to take full advantage of the large Latin American markets for these solutions.
Long-term startup growth support
The government-backed Innóvate Peru program has funded more than 3,400 business projects to date, and more than 25 private institutions are now accelerating, incubating and investing in new Peruvian companies. The creation of new companies is at its highest rate.
Peru’s investments to boost its startup ecosystem start to bear fruit, which is reflected in the international recognition that financial institutions currently give it. At this rate, we will soon see the first unicorns of the Andean region born.