Investment Director at P18Ventures
Lucas Arzola was founding COO at Puerto Rico-based international startup program parallel18 during its first 5 years. He designed and led operations for the pre18 preaccelerator and P18 accelerator, advising 250+ startups and overseeing $11M+ in startup grants. Arzola now leads venture capital fund P18Ventures, deploying $2.6M in 58 investments so far, and is a business consultant and angel investor.
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Disclaimer: all content within the Startup Ecosystem Summary and Editor’s Guide sections is written by and reflects the personal perspective of the guest editor. The guest editor is not responsible for content within the Country Snapshot and Community sections, as much of this content is compiled from external sources and does not necessarily reflect the guest editor’s view.
The Puerto Rico startup ecosystem has scaled exponentially in the last several years, aligned with the growth of the Puerto Rico Science, Technology and Research Trust. This NGO is the driver of the island’s public policy around technology and innovation, and is the parent organization of parallel18. After the 2015 launch of this internationally-focused accelerator to augment existing local startup programs, there has been significant growth in every metric related to innovation, including startup grants available, companies launched, large enterprises engaging in corporate innovation, number of investors, private capital invested, and more.
Puerto Rico’s business-friendly environment and highly appealing quality of life — combined with the attractive Acts 20, 22, and 60 which provide 100% tax exemptions on capital gains for resident individuals and distributions of profits generated by locally based corporations — have multiplied the presence of accomplished businesspeople that are now local, and have brought a significant influx of international commercial activity and investment capital.
Puerto Rico offers a unique socioeconomic environment as a Spanish-speaking United States territory. The combination of business, legal, and regulatory federal oversight and a rich Hispanic culture provides an unparalleled commercial bridge for American companies expanding to LatAm, under more affordable costs of doing business and living. Similarly, LatAm companies scaling in the opposite direction can find soft landing for doing business in the United States, including the ability to become American entities investable by American funds, and an effective test market with qualified bilingual talent and a higher purchasing power than their markets of origin.
The Puerto Rico tech scene continues to gain significant momentum from the foundation that previous local existing incubators established. The consequent evolution catalyzed by the Puerto Rico Science, Technology, and Research Trust through parallel18 has brought a consistent deal flow of high-growth investable startups that are poised to continue scaling locally and into global markets from the island. Key milestones that will validate the local innovation ecosystem are based on Puerto Rican founded homegrown companies realizing their potential by accomplishing large post Series A rounds of fundraising and eventual successful acquisitions/exits. This would bring success cases for the ecosystem, and new experience and wealth to a more mature entrepreneurial class that can become founders of subsequent startups with a higher degree of success and/or knowledgeable angel investors that can further propel the development of the tech sector.
While several angel networks and venture capital funds have organized around the parallel18 deal flow and are deploying funding, significantly more capital needs to be available locally to ensure the retention and growth of scalable startups from the island. The continued increase in participation from large corporations in the startup scene and the further development of tech talent, particularly coding, are also essential to overcome these upcoming challenges.
Editor’s choice of the country’s top 10 emerging tech startups.
Healthtech
San Juan
Edtech
San Juan
Customer Support
Bayamón
E-commerce
Guaynabo
E-commerce
San Juan
Fintech
Ponce
Retail Tech/Logistics
San Juan
Insurtech
San Juan
Enterprise Software
San Juan
EdTech
San Juan
Editor’s pick of which ‘Featured Startup’ is especially worth following and why.
Editor’s choice of the industries with the most potential for technology disruption and growth.
Editor’s perspective of the maturity level of talent in the ecosystem.
Editor’s commentary on how the country’s culture and history have impacted the ecosystem.
Puerto Rico’s indigenous Taino ancestry, the 405-year rule of Spain, and the introduction of Africans as slaves for centuries, led to the mixture of ethnicities that comprise Puerto Rico today, enriching a culturally diverse heritage that excels in the arts and music. In 1898 the island became a United States territory, and as a result, has never been an independent country. That, combined with the fact that Puerto Rico is an island, has been a barrier in the mindset of local entrepreneurs to feel empowered to succeed on a global scale. This has significantly changed because of parallel18’s approach to entrepreneurial training and its international focus. The island has diversified its industrial base and small business community by incorporating a formal tech sector with thriving entrepreneurs that is leveraging the best Puerto Rico has to offer and United States influence to scale globally from here.
Both a significant asset and also a disadvantage is the fact that all Puerto Ricans are born with United States citizenship, making accessible the opportunity to gain experience by studying, working, and/or launching startups in the United States. An important mission for local economic development organizations is to continue creating the conditions for these talented Puerto Ricans to return to the island and positively impact the local economy. In the meantime, Puerto Rico is leveraging its numerous and influential diaspora population in the United States to create channels for them to add value to the island, and to provide avenues for local entrepreneurs to engage with the Hispanic market in the mainland.
Interested in becoming more involved in this ecosystem and connecting with local ecosystem leaders? Let us know.
Ashford Venture Partners (San Juan): Puerto Rico based serial investment vehicle focused on venture capital and private equity.
ATO Ventures (San Juan): Pre-seed and seed stage venture capital firm focused on technology startups backing companies at the earliest stages, often before products have been completely built.
Aurora Angel Network (San Juan): The leading professional association supporting the success of angel investors in high-growth, early-stage ventures in Puerto Rico.
Caribbean Private Equity Partners (San Juan): Caribbean Private Equity Partners ("CPEP") is a leading investment firm deploying capital in the Caribbean Basin with long standing and deep professional and personal relationships throughout the region.
Grupo Guayacán IDEA Seed Fund (San Juan): Puerto Rico’s first seed fund providing risk capital to early-stage innovation-driven ventures.
Morro Ventures (San Juan): Puerto Rico’s first institutional early-stage venture capital firm investing in technology companies across Latin America that leverage Puerto Rico as a platform for growth.
P18Ventures / Puerto Rico Science, Technology and Research Trust (San Juan): P18Ventures has the mission to create investment opportunities for parallel18 startups and alumni, through a follow-on investment fund, investment events, and direct contact with investors.
Parliament Capital (San Juan): Puerto Rico based, minority-owned alternative investment firm specializing in direct lending and private credit that targets underserved, privately held, lower middle-market companies in Puerto Rico, the US Virgin Islands and the United States.
Semillero Ventures (San Juan): Puerto Rico based growth-stage private equity investment fund specializing in agriculture, food, agribusiness and appropriate agricultural technology.
Causa Local (San Juan)
Centro Para Emprendedores (San Juan)
Centro Para Puerto Rico (San Juan, Mayagüez)
EnterPRize by Grupo Guayacán (San Juan)
iCorps Puerto Rico by Grupo Guayacán (San Juan)
Inversión Cultural (San Juan)
Endeavor Puerto Rico (San Juan)
Guayacán Venture Accelerator (San Juan)
P18 from parallel18 (San Juan)
Pre18 from parallel18 (San Juan)
Startup.PR (Gurabo)
Booksloth (San Juan, Puerto Rico):
Raincoat (San Juan, Puerto Rico):
Co.co.haus (San Juan)
La Oficina (San Juan)
Oceana Hub Center (Caguas)
Piloto 151 (San Juan)
The Landmark (San Juan)
Animus Summit (San Juan): The biggest women summit of the Americas.
BE Fest (Virtual/San Juan): The Boricua Emprende Fest (BE Fest), is an annual event promoted by Colmena66 to celebrate the talent of the business ecosystem.
Forward Research and Innovation Summit (San Juan): An event organized by the Puerto Rico Science, Technology and Research Trust that takes place every 2 years.
Connected at Home (Virtual)
Facebook Developer Circles, San Juan (San Juan)
Fullstack Nights (San Juan)
PR Research and Innovation Meetups (San Juan)
Puerto Rico Crypto Meetup (San Juan)
San Juan Tech Meetup (San Juan)
Tech Guru Talks (San Juan)
Emprendimiento Capital: Capital city (San Juan) Economic Development Program
Enactus Puerto Rico (San Juan)
Idea Platform at University of Puerto Rico (Mayagüez)
Startup Lab at University of Puerto Rico (Mayagüez)
UPR I+C at University of Puerto Rico (Río Piedras)
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*Updated with latest available data based on listed source.
*Updated with latest available data based on listed source.
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