Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Jose Deustua was recorded in May 2019.
Jose Deustua, Managing Director at UTEC Ventures, talks about Peru’s entrepreneurial ecosystem.
Sramana Mitra: Let’s get to know you. Let’s get you introduced to our audience. Tell us about yourself as well as UTEC Ventures.
Jose Deustua: UTEC Ventures is an accelerator. It’s a venture branch of a Peruvian university. We’re based in Lima, Peru. We invest in early stage startups from Latin America. We have been doing so for four years. We have invested in a total of 32 startups so far.
Sramana Mitra: You invest only in Peru?
Jose Deustua: We run the program in Lima, Peru, but we invest in different startups from all over the world, mainly from Latin America. We have received applicants from other countries too.
Sramana Mitra: Let’s start by talking about some of the companies that you have invested in. I will segue that discussion into trends in Latin America. Talk about two or three companies that you find particularly interesting. As you are talking about them, give us a feel for some of the reasons why you chose to invest in those companies.
Jose Deustua: We are running our seventh program. It’s a program based on educational startups. What we’re looking for is to help entrepreneurs reach their goals in solving educational problems in LatAm. We’re very excited about this because it’s the first time we are focusing on EdTech. We find that it’s a big problem for Latin America.
We have selected six startups. These startups are attacking different problems in the educational system – from K12 to retraining. We’re very excited. What we expect is not only to have return on investment but also to have an impact on the society of Latin America.
Sramana Mitra: Let’s double-click on that. How much are you investing in each of these companies?
Jose Deustua: We invest, in cash, $25,000. We ask for 7% equity in exchange.
Sramana Mitra: 7% equity for $25,000. That’s a very steep price. Are all these companies from Peru?
Jose Deustua: They’re from Peru and other countries too. We know that compared to America, we don’t provide that much cash for the equity we are asking for. One of the differences is that we don’t have that much liquidity here in Latin America. Second is we are investing in very early stage startups.
Why we ask for 7% is because of the value of the program. UTEC Ventures is a member of the Global Acceleration Network (GAN). What we are doing is providing top-of-the-world methodology and mentors. That’s why we charge a high equity compared to other programs in the US or more developed countries.