Startup Peru is a government initiative that co-finances young Peruvian companies which offer innovative, technology-based products and services.
Established in 2012, the program provides financing for startups in the form of grants.
What startup expenses can the program co-finance?
- Services associated to it improve or perfect products, processes, services or forms of commercialization.
- Business services related to advertising and marketing, communications, distribution channels, suppliers, translations, market research, commercial prospecting, sales management, among others.
- Acquisition and development of specialized software designed for the commercial launch of the business.
- Acquisition and subscription to documentation and databases of specialized data.
- Business trips or networking events or participation in business acceleration programs in the country or abroad, which contribute significantly to the objectives of the project.
- Registration, management and commercialization of intellectual property.
- Honoraria for the team members.
- Acquisition of equipment directly linked to the project.
- Other expenses linked to the business.
StartUp Perú is a government program by the National Innovation Program for Competitiveness and Productivity (Programa Nacional de Innovación para la Competitividad y Productividad – INNÓVATE PERÚ) of the Ministry of Production.
There are two funding categories. The group under which an entrepreneur may apply depends on the phase in which a project or startup finds itself.
- Innovative Entrepreneurs category: For those seeking to validate a business model.
- Startup Perú may grant up to PEN$50,000 (almost US$15,000).
- An amount of PEN$5,000 will be granted to the incubator or the accelerator co-financed by Innóvate Peru to cover the technical and administrative follow-up of the project.
- Dynamic Entrepreneurs category: An established startup may be eligible if it is less than five years old. It also cannot have made over PEN$120,000 (around US$35,000) within the last year.
- If they fulfill these requirements, they may apply for up to PEN$140,000 (US$41,000) in funding.
- An amount of PEN $10,000 (one thousand soles) will be assigned to an incubator or business accelerator co-financed by Innóvate Peru to cover the technical and administrative follow-up of the project.
Innóvate Peru reported in August 2018 that beneficiary Startup Peru startups had achieved over PEN $450 million (around US$132.5 million) in sales, of which, 20 percent is perceived back by the government in the form of taxes. In addition, they generate jobs and the average salary at these startups is PEN $2000, which is double the minimum wage.
A 2019 paper by the Inter-American Development Bank (IADB) presents the results of an impact evaluation of Startup Peru. The authors found positive effects on the performance of the startups (sales, hiring, external investment, quality of employment, etc.) but it fails to find impact on entrepreneurs’ earnings.
The 2019 IADB analysis shows that:
- The program's failure to find impact on entrepreneurs’ earnings is, to a great extent, consequence of poor selection criteria, heavily reliant on soft skills, while evidence shows the significance of traditional observables, such as the experience of the lead entrepreneur or the nature of the startup (B2B rather than B2C), as the main drivers of success.
- Should positive discrimination have been conducted, the program’s effects could have doubled with equal or lower budget.
About Peru's institutional framework and innovation policies:
In the last decade, the institutional and policy framework for innovation in Peru has become much more robust, which has occurred alongside an increase in public financing. The innovation policy advanced by the Ministry of Production (PRODUCE) has been implemented through the National Innovation Program for Competitiveness and Productivity (PNICP), which provides non-reimbursable financing to businesses and other agents in the innovation system.
StartUp Perú is just one of the many government programs seeking to create a more innovative country.