The list of startups includes 13 Puerto Rican companies that will receive between US $25K to US $35K to continue growing their businesses in light of the pandemic
San Juan, Puerto Rico, October 28th 2020 — As part of its mission to support innovative entrepreneurship and impact Puerto Rico’s economy, parallel18 — along with its parent organization, the Puerto Rico Science, Technology and Research Trust — announced the 39 startups that will benefit from its US $1M Business Continuity Fund (BCF.) An investment vehicle created to help graduated companies from the program to face the new economic challenges caused by COVID-19.
According to a report published by the SME Banking Club about coronavirus’s economic impact on the global startup ecosystem, international venture capital financing has been reduced by approximately 20% since the pandemic started. This report, published in May 2020, also details that 4 out of 10 technology startups are in what they call a “red zone” where they might disappear if they don’t receive investment soon. Within this context and with the disbursement of the fund put in place, the international program for startups based in San Juan hopes that the BCF’s injection of capital will ensure these companies’ continuity and growth towards global markets from Puerto Rico.
“From the moment the magnitude of COVID-19 became evident, we had to reinvent ourselves as a program and, at the same time, keep fulfilling our mission to support entrepreneurs from Puerto Rico and the rest of the world. It was then that, having reduced our eighth cohort because of the pandemic, the Trust agreed to redirect P18’s remaining operational budget to invest US $1 million in a special relief fund,” explained Eduardo Padial, parallel18’s Director of Operations.
This way, the PRSTRT invested between US $25K to US $35K in every startup using a standard convertible note, with the flexibility that the entrepreneur can repay the capital after two years. Thus, the return on investment will directly impact Puerto Rico’s economy through the PRSTRT which, as an entity, is dedicated to creating innovative support structures to boost the island’s technological development.
“The fund allowed us to act immediately and develop an investment vehicle that could support a very diverse group of companies graduated from our program, both local and international, that needed capital to propel their accelerated growth or keep the business afloat in the face of the pandemic,” added Padial, who highlighted that the investments made strengthen the program’s commitment to supporting underrepresented entrepreneurs, since 31% of the startups are led by women. Additionally, the P18Ventures portfolio increases its diversity by adding alumni with LGBTTQ founders and BIPOC.
To be eligible to receive the investment, applicants had to be alumni from parallel18’s acceleration curriculum, P18. The final list includes companies such as Booksloth (Puerto Rico), a mobile app book recommendation app engineered and led by two Puerto Rican women; Brands Of (Puerto Rico), a virtual marketplace that sells and exports local products from a given country; Guilty (Puerto Rico), an online clothing-rental store; LICK (Puerto Rico), which sells “premium” and eco-friendly products for pets; Abaxto (Peru), a company that digitizes the purchasing process between retailers and distributors, and Nilus (Argentina), whose social mission is to rescue food and distribute it before it goes bad.
A direct impact on the innovation ecosystem
The PRSTRT, the organization that finances parallel18, approved an adjustment in the program’s operational budget to help selected alumni face the challenges of the current climate or modify their business model and strategies in ways that suit today’s circumstances. This modification reinforces the PRSTRT mission to position Puerto Rico as a center for innovation and technology.
“Within the pandemic’s framework, supporting established companies has become vital to keep expanding the impact that entrepreneurial support organizations, like parallel18, have in revitalizing the innovation and entrepreneurship ecosystem and creating jobs in Puerto Rico”, said Lucy Crespo, Chief Operating Officer at the PRSTRT.
Pick My Stuff (Puerto Rico), a service to transfer loads of heavy items; Silabuz (Peru), a web platform to educate children in programming and application development; and Wisboo (Puerto Rico/Argentina), a platform were anyone can create their customized training academy and virtual courses, are among the product and services that benefited from the fund. The list also includes Syrona (UK), a startup that focuses on women’s reproductive health, and EXCITED (Mexico), an e-commerce platform with products for the LGBTTQ community. These startups saw accelerated growth during the pandemic; therefore, the fund will allow them to meet their accelerated demand.
“Through this fund, the Trust seeks to strengthen its commitment not only with the development of high-impact startups from the island, but also with providing the necessary tools to guarantee that, once these startups emerge, they can continue operating and, in turn, stimulate the local economy”, added Crespo.
On this note, Lucas Arzola, who leads P18Ventures, pointed out that the BCF marks a milestone in the global startup ecosystem. “We understand that it is the first time since the pandemic began that an international startup program has designed a business continuity investment fund as a direct response to the economic impact caused by the coronavirus. So we are really excited to be able to trailblaze within the investment sector because it means that our companies are being the first to receive the boost they need in this historical context,” said Arzola, who also highlighted how the fund’s design provides new growth opportunities for the program’s alumni.
“Both, parallel18 and the Trust, firmly believe in the potential that each of these startups has to insert themselves into the local economy while continuing to grow in international markets from Puerto Rico. We are talking about an investment that will have a short and long-term impact”, he explained.
Five startups raise investment from P18Ventures
Amasar (Puerto Rico), Agtools (United States), The Live Green Co (Chile), BoxPower (United States), and FitCo (Peru) are the five startups that, aside from receiving the BCF, also raised investment through P18Ventures, parallel18’s traditional matching fund. This portfolio grows after every P18 cohort when the fund invests a medium of US $75K per selected startup as a match to the investment that alumni raise from private sources.
It should be noted that this matching fund is independent from the BCF, and it has been part of parallel18’s pillars as a business development organization since its inception in 2015. With the sum of these startups, graduated from P18’s Gen.7, the portfolio now consists of 21 active startups. These five new investments from the matching fund, along with the BCF special fund disbursement, mean that the total capital invested by P18Ventures today amounts to US $2.6M.
P18Ventures’ mission as a sub-program is to continue creating investment opportunities for startups that participate or have participated in the accelerator. To achieve this, Arzola works within the PRSTRT to expand the network of P18 investors, supporting companies through the fundraising process, providing educational opportunities to local individuals interested in being investors, and developing additional financing opportunities.
Companies benefiting from the Business Continuity Fund:
About parallel18 and the Puerto Rico Science, Technology and Research Trust
Parallel18 is a top-level, performance-driven international startup program with a social mission: offering entrepreneurs from all over the world access to high-quality business training, grants, mentors, business contacts and investors to help them scale globally while working to position Puerto Rico as a unique hub for innovative businesses and technology. Created in 2015 by the Puerto Rico Science, Technology, and Research Trust, parallel18 stands out for its high-caliber, results-focused pre-acceleration and acceleration curriculums.
The Puerto Rico Science, Technology and Research Trust, as described in Public Law 214, is a nonprofit organization created in 2004 to promote the participation and creation of jobs in the Island in the global knowledge economy by promoting investment and the financing of research and development of science and technology. The PRSTRT invests, facilitates and builds capacity to continually advance Puerto Rico’s economy and its citizens’ well-being through innovation-driven enterprises, science and technology and its industrial base. With the mission that by 2022, Puerto Rico is a globally recognized innovation hub that develops, attracts, and retains scientists, technology entrepreneurs, and enterprises to unlock world class creativity and competitiveness. The PRSTRT t is also responsible for the public policy of Puerto Rico science, technology, research & development, and public health. For more information: www.prsciencetrust.org.