Is Peru ready for a mega seed round?

Something new has arrived to Spanish-speaking Latin America’s startup ecosystem – the mega seed round. In November, Colombian startup Habi announced a $5.5 million seed round led by Tiger Global only a day after Mexican startup Justo announced a $10 million round led by Foundation Capital.

The size of these seed rounds is closer to what is expected for a US-based startup, and a significant multiple of what has been typical in Latin America, outside of Brazil.

In contrast, successful seed stage rounds in Peru usually occur at between $250,000 and $750,000 and are led by local investors. Startups that have raised this level of capital locally have, in general, have been operating for two years and have achieved recurring revenue. On the higher end of the seed stage spectrum in Peru to-date are Keynua and Runa, two startups that have been accelerated by Y-Combinator, as well as Tienda Pago, which subsequently raised a Series A round from Kaszek Ventures.

What will it take for mega seed round to come to Peru?

Mega seed rounds often occur prior to product-market-fit stage, so the profile and capability of the founding team is essential.

  • Serial founders. Startup founders who have a proven ability to lead teams and scale-up regionally.
  • Sector-expertise. Deep sector knowledge will go along way to convince investors that a team is capable of quickly disrupting a new market.
  • Strong connections. It’s no coincidence that both the Habi and Justo rounds were led by US-based investors. This is what it will take to raise a mega seed round in Peru.

Along with the team, the size of the local market opportunity is important. Lima is a large market and global startups including Rappi, WeWork, Uber and Cabify have entered successfully and quickly. This validates the city’s potential as a launch point.

So, all it will take is an experienced group of founders with US connections to see potential in Lima a a beachhead market! With the growing number of serial founders, professionals with US startup experience, or foreign-trained MBAs in our startup community, a mega seed round in Peru could happen sooner than we think.

Leave a Reply

%d bloggers like this: