Startups and Bitcoins in Peru.
In 1821 General Jose de San Martin proclaimed Peruvian independence from Spain. After two decades of internal wars, a caudillo (local warlord) Ramon Castilla rose to power. It coincided with silver prices plunging down and guano moving up to the top of Peruvian export commodities list.
In a period 1879–1884 War of the Pacific had destroyed Peruvian economy. It was exacerbated by a number of expensive infrastructure projects, such as massive railroads building program. In 1924, as a result of preceding decades of social turmoils, the socialist party Alianza Popular Revolucionaria Americana — Partido Aprista Peruano (APRA) climbed to the top of the power pyramid.
In XX century Peruvian Government had changed hands several times, switching from socialism to dictatorship and back. As a result, at the beginning of 1990th, Peruvian GDP diminished for more than 20% and population’s per-capita dropped under $700. Additionally, local military guerrilla movements, like Sendero Luminoso, had jumped in popularity among locals.
In 1990–2000 the Presidency of a former economist of Japanese decent Alberto Fujimori, which pursued the neoliberal reformist agenda and applied a shock therapy to Peruvian economy, stabilized local monetary system and renewed an economic growth. As a result, from 1992 to 2002 Peruvian economy had grown up for more than 40%. Still, unicameral, 130-members Congreso de la República is dominated by right-wing Fuerza Popular led by Fujimori’s daughter.
Peruvian economy is well diversified and technological sector is steadily growing in this country. That creates a number of market opportunity for tech entrepreneurs. At the same time, Peruvian rural population is relatively poor, telecommunication infrastructure is underdeveloped and administrative barriers to SME is still high. Those negative factors have undermined the future potential of the local startup ecosystem.
In Peru Bitcoin has not been recognized as a currency, which means that Peruvian banks can’t accept or open a savings account and pay interest in Bitcoins. However, buying and selling Bitcoins is legal there and similar to buying any other goods. There haven’t been official statements from the Superintendency of Banking and Insurance on Bitcoin yet.
Business Notes for Startups Founders:
- political climate: indifferent;
- economic climate: marginally friendly;
- regions to focus: locally;
- industries to focus: EduTech, entertainments, FinTech, e-services (travel), e-jobs;
- major limitations: slowing economy (GDP growth rate less than 3%), fixed Internet penetration rate is about 40%, high administrative and legal barriers;
- stimulus: service sector accounts for more than 60% of GDP, mid-income consumers (per-capita exceeds $6000);
- opportunities: to build an e-business aimed at the growing population of young urban users of mobile Internet;
- Cryptocurrencies and ICOs: not-regulated, legal.