New cornerstone for Peru’s venture capital industry

It was a side note in a day of big political news for Peru, but is was a huge news for the local venture capital industry.

On July 28th, independence day, the Ministerio de Economía y Finanzas published the Plan Nacional de Competitividad y Productividad, which included a plan to promote innovation by creating a fund to invest in venture capital funds.

The measure sets aside government money to establish a fund of funds to invest in 3 to 5 venture funds which will, in turn, invest in approximately 120 startups. The fund of funds will go along way to addressing the venture capital gap in Peru. With this initiative Peru is on the cusp of laying the cornerstone for the local venture capital industry.

Para atender las brechas de financiamiento que exhiben las start-ups del país, se plantea como medida de política la creación del Fondo de Capital Emprendedor, el cual realizará colocaciones de capital en fondos privados especializados, a cambio de una participación, para inversiones en emprendimientos dinámicos y de alto impacto que buscan su consolidación y escalamiento. De esta manera, la medida contribuirá positivamente a fortalecer los aspectos financieros del ecosistema para el emprendimiento y la innovación.

Plan Nacional de Competitividad y Productividad

The fund will be managed by COFIDE, Peru’s Development Bank, following the steps of CORFO, Bancoldex and NAFIN who manage similar vehicle for the other three Pacific Alliance countries. Peru’s inititiatve was spearheaded by Desirée Alayza, COFIDE’s outgoing Head of Development and Innovation.

Below is the time frame of the fund:

Timeline for COFIDE’s venture capital fund of funds.

The local startup ecosystem in Peru strong, many startups are led by great founders, seed capital is reaching critical mass, and foreign venture capital funds are investing Peru. The time is ripe for local investors to direct additional capital to back startups.

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