What do you do when you are global accelerator program in Puerto Rico with two years of highly promising results and you are hit by a devastating hurricane that leaves most of the island with no power for months? Do you cancel the program for you 4th generation of companies? Or do you continue?
Not only did the parallel18 officials decide to continue to work with the companies that had been selected for the 4th generation of the program, they also created a new initiative that would help in the economic recovery of the island. “After several brainstorming sessions in the dark, we came up with a pre-acceleration program that would focus on Puerto Rican companies alone. We were looking for ways to have immediate impact in the entrepreneurial economy. And that is how pre18 came to life,” said Sebastián Vidal, executive director of the accelerator.
Parallel18 is an initiative that attracts and supports high impact startups that can scale from Puerto Rico to the world, with special focus on the mainland U.S, Latin America and Europe. The program is part of the Puerto Rico Science, Technology and Research Trust in collaboration with the Puerto Rico Industrial Development Company and the Department of Economic Development and Commerce of Puerto Rico.
From March 2017 to May 2018, the program worked with the third and fourth generations of participants. Parallel18 had had 507 companies apply for the third generation from 48 countries and, for its fourth generation, 457 companies from 48 countries. For each generation, less than 40 companies are selected for the 20- week program.
Hurricanes Irma and María, which both hit the island in September of 2017, affected the fourth generation of companies, particularly in sales in Puerto Rico. Yet, both generations of companies yielded $24.4 million in total revenue of which $8.1 million came from Puerto Rico. Fifty percent of the foreign companies participating in the program opted to stay on the island. Nearly a quarter of the companies participating in the program during that period were Puerto Rican. The portfolio valuation for the startups was $244.2 million.
Pre18 -a way to shore up the entrepreneurial ecosystem
Yet, those results were not enough for the parallel18 team. “With the intention of motivating entrepreneurship and innovation as the path to normality, we launched pre18 to help local entrepreneurs to go from concept to market,” said Sebastián.
Funds were needed for the new program and they started coming as soon as Parallel 18 launched the new initiative. Techstars Foundations donated $25,000 for the program and Airbnb and United for Puerto Rico also channeled funds.
The program was launched in November of 2017 on a tour of six municipalities in different regions of Puerto Rico since communication networks at the time were still pretty sketchy. A report issued this year by the Federal Communications Commission reported that Hurricane María knocked out 95% of cell towers in Puerto Rico. The response was a hit. Even when many areas they visited lacked power and a reliable water service, 307 companies responded and participated in the information sessions held.
Parallel18 screened the applications to focus on “entrepreneurs who were already trying to make a difference and give opportunities to those who came up with ideas inspired by the hurricane.” Finally, in January, 40 companies were selected to participate in the program. Selected companies would have to complete the pre-accelerator program and participate in what they called the PayItForward initiative, where startups had to make significant connections to one another to support each other’s growth. They were also connected with partners for advice and support.
The funds donated by United for Puerto Rico were used to select 10 companies out of the group and provide them with $20,000 to continue their growth, explained Eduardo Padial, Startup executive at parallel18.
10 companies selected for funding from United for Puerto Rico
Blockfarm-hi tech applied to growing produce in containers that can be packaged and sent to supermarkets, restaurants, hotels and bars.
BOON-automates operational processes between insurance companies and bank, facilitating the underwriting of a communal policy for a condo and a policy for each apartment.
FRESH-Fresh Export Solutions helps producers of frozen food in Puerto Rico export their product to the continental US. They were able to send the first container of local produce from producers who had never exported before. The company is completing a digital marketplace for their producers.
HiveCube-Manufactures modular homes that are secure and accessible in price using maritime containers that have been decommissioned and that can withstand winds of 150 Mph. With the funds donated by United for Puerto Rico they are manufacturing a home that they will donate to a nonprofit organization.
Molcajete Foods-Manufactures corn tortillas and chips for the retail market. With the funds donated by United for Puerto Rico they were able to hire three people.
POXX- Develops technology to find ways to store biogas emissions from farm livestock and landfills and use to produce energy. They are working on a prototype.
PRatian-Manufactures Agrobeads to spur plant growth and reduces the need for irrigation and fertilizers. Can be used for commercial farms as well as for home growers.
Produce! -Is a digital marketplace in which restaurants order local produce directly from multiple farmers with next day delivery options.
Odflex- Is a delivery company that aims to provide operational efficiencies in the transport of goods.
Qualtics- Developed an app called Apagón (Blackout), which helps determine where there are power outages in Puerto Rico.
Of all the companies participating in the pre18 initiative, six are in the process of closing deals, 11 corporate partners contributed to them and 34 of the 40 applied to the parallel18 international program, which is rigorous in its selection process, and 16 were accepted. Five of those sixteen companies received funds from United for Puerto Rico. For more information on parallel18, please visit www.parallel18.com.