July 2021 was a high point of uncertainty in Peru. The president-elect had recently achieved an unexpected victory and was about to take office. His promised changes to the economic agenda caused many investors to move their capital outside of Peru. The country’s financial institutions had recently weathered the Covid-19 pandemic and now were faced with managing a new challenge. It was under this cloud of fear and uncertainty, that we decided to double down on Peru and invest in Prestamype.
Why did we invest in Prestamype at that time? Our conviction came from watching the startups co-founders, Carlos Ferreyros and Laure Schlesinger, build a great business in an area of high need for Peru’s micro and small businesses. We knew they were in it for the long term. I first sat down with Carlos and Laure in early 2020 at Haití Café overlooking Parque Kennedy in Lima. Up to that point, Carlos and Laure had been busy building their business and hadn’t done a formal fundraising push.Since they had bootstrapped their business up to that point, they weren’t interested in taking capital from just anyone. My colleague, Elizabeth Acuña, and I were intrigued and wanted to learn more. During that first meeting, Carlos and Laure were more interested in getting to know me than in giving their pitch and seeking capital. They asked thoughtful questions in order to understand what venture capital investors, especially small seed stage investors like AVP Ventures, could add to a startup. I was immediately struck by how Carlos and Laure complemented each other as co-founders. While Carlos leads product, sales and innovation, Laure manages risk, financial planning and capital raising. They are both soft-spoken, but firm. The kind of thoughtful, detail-oriented type of founders that we like to invest behind at AVP Ventures. These are the type of startup founders in Latin America whose potential is ready to be unlocked through access to more capital and better resources.
Our conviction came from watching Carlos and Laure build a great business in an area of high need for Peru’s micro and small businesses. We knew they were in it for the long term.
Carlos and Laure were impact-minded from the beginning. Prior to launching Prestamype, Laure remembers meeting with a small business owner in Peru and learning that informal lenders “would charge her interests up to 100% annually.” For Laure, a French person living in Peru, this “seemed unreal.“ The Peruvian banking industry is one of the most concentrated in Latin America, and interest rates, reaching up to 39% annually for micro businesses , are some of the highest in the region. Banks in Peru are also inflexible on loan terms and have slow, manual processes. This results in a financing gap for micro and small enterprises: of the 2.4 million formal micro and small companies in Peru only 5.5% have a loan in the financial sector . There are an additional 1.5 million informal micro and small companies . Traditional financial institutions have not yet successfully achieved digital funding solutions, leading to a large number of underserved clients. This provides an opportunity for digital-first fintech startups in Peru, and we felt Prestamype was on well on its way to becoming a leading fintech disruptor.
Prestamype provides asset-backed loans and other financial products to underserved micro and small enterprises in Peru. The company offers asset-backed working capital loans and B2B payments solutions. Working capital loan sizes average US$ 20,000, ranging from $6,000 to $120,000, and have amortization structures from one to four years. Potential clients access credit through Prestamype’s website, which allows them to select the funding amount, amortization structure and maturity of their desired loan. Applicants then fill out information about the location, type, size, and legal status of their property. Loan applicants then receive pre-approval of the loan and send the necessary legal documents. The final approval and loan disbursement steps are handled by Prestamype’s team. At the time of our investment, Prestamype’s primary revenue stream was a loan origination fee for peer-to-peer loans. Since our investment, we have watched Prestamype add new products and business lines in order to better meet customer needs. The startup continues to grow its origination and is on a clear path to disbursing loans from its own on-balance sheet.
Eye for innovation
Prestamype’s competitive advantage relies on customer insights, better technology and more efficient processes that traditional financial services players. Prestamype uses proprietary credit scoring algorithms and lends against collateral, allowing even entrepreneurs without credit history to access a loan. Due to its technology and efficient processes that lowers costs, Prestamype can charge clients a 32% annual interest rate on average compared to the 39% for micro enterprises in the regulated financial system. Prestamype is also faster at getting clients money. The company disburses loans in two weeks, compared to up to 3 months for similar size loans provided by traditional financial entities. Carlos is constantly learning and ideating. He is able to work with his team to try new products and implement them quickly. While I initially considered this activity a distraction from the core business, I soon realized that for Prestamype, it is a strength. This process has allowed Carlos to identify areas for growth that are complementary to his current product offering, including B2B payments and electronic billing. Trying new products allows Prestamype to better serve current customers and allow him to reach new ones.
Prestamype’s methodical approach to building a team and product, along with the large market opportunity, is part of what is making Prestamype a disruptive force for positive change in the Andean region.
Building a team of leaders
Prior to our investment, Carlos and Laure had diligently put together a surrounding team of managers that could build new products and manage the financial and legal aspects of the business. Nazart Jara, the CTO, has experience as developer at startups and consulting firms such as Imedia Comunicaciones, Joinnus, among others. Jessica Chang, the CFO, had previously worked at Banco Financiero at different positions. Carlos E. Ferreyros, Chief Legal Officer, had relevant legal experience for overseeing the entire loan process. We have been impressed by Carlos and Laure’s focus on continuing to build their team. Much of the investment round we participated in has been used to hire people with specific skill-sets that can allow the company to grow fast while still evaluating risk adequately. David Toyama, who had previous product experience working at one of the largest insurance companies in Peru, was hired as Head of Growth, and Lizbeth Neyra, who has over twenty year of experience managing risk for financial institutions,was hired as Chief Risk Officer. Carlos and Laure are building a strong team around them to cover the vital business areas as they grow. In effect, hiring people that are smarter than they are. This methodical approach to building a team and product, along with the large market opportunity, is part of what is making Prestamype a disruptive force for positive change in the Andean region.
From bootstrap to venture-backed scale-up
After weathering the Covid-19 pandemic, Carlos and Laure took the steps to get the business back and after a year they had regained the position they had previously held. Today, Prestamype originates over $4 million each month in loans and B2B payments financing. The company has now provided funding to 1,500 clients, representing over $40 million in total allocated loan volume. Along with reaching underserved business, Prestamype also serves female business owners. All in all, 43% of working capital loans were granted to women as the main applicant. It took us almost two years for us to invest behind Carlos and Laure. It was worth the wait. Since we invested, working with Carlos and Laure up close and observing the company’s performance, led us to invest again in 2022. Subsequently, Salkantay Ventures became Prestamype’s largest equity investor and Prestamype received debt financing from BID Lab, an important seal of approval. Carlos and Laure are constantly setting the bar higher. They keep reaching their objectives. We don’t expect them to slow down any time soon.
 Tasa de interés promedio del sistema financiero para créditos a la microempresa. Superintendencia de Banca, Seguros y AFP.
 Las Mipyme en cifras 2019. Peruvian Ministry of Production.