Em Conversa Fintech Ecosystems South America

Em Conversa: Accelerating Puerto Rican Fintech Development with Parallel18

Em Conversa looks to uncover the secrets in Latin America (LatAm) that have caused the fintech market to boom, from being worth less than $50million in 2016, to $2.1billion in 2022. This week, we spoke to Dr. Héctor Jirau, executive director at Parallel18, to learn more about the Puerto Rican market and how local businesses can use Parallel18’s services to expand.

Hector Jirau, PhD, serves as the executive director of Parallel18, an innovation hub focused on providing funding, mentorship, business connections, and investment to underrepresented founders around the globe. Prior to this role, Dr Jirau served as operations and investment director of the organisation until January 2023. Currently, he leads Parallel18 to achieve its established metrics, support new partnerships and exponentiate its global recognition as a proven results-driven accelerator.

Hector Jirau, PhD, serves as the executive director of Parallel18
Hector Jirau, PhD, serves as the executive director of Parallel18

He holds a PhD in biochemistry, an MS in financial engineering, a BS in cell and molecular biology, and a professional certificate in data science, among others. Dr Jirau has prior experience as an associate in Unity Growth Fund, a late-stage private equity firm with investments in Stripe, SpaceX, Klarna, Epic Games, and other top-performing companies.

Sitting down with The Fintech Times, Dr Jirau explains why the Puerto Rican market is one to keep an eye on and how Parallel18 is helping innovators accelerate growth:

Can you tell me more about the company and your role within it?

Parallel18 is a top-level, performance-driven international startup program with a social mission: offer entrepreneurs from all over the world access to high-quality business training, access to capital, and networks to help them scale globally. All the while working to position Puerto Rico as a unique hub for innovative businesses and technology.

The program is part of the Puerto Rico Science, Technology, and Research Trust, a private non-profit organisation. It was created to maximise Puerto Rico’s participation and creation of jobs in the global knowledge economy by promoting investment and financing of science and technology research development.

The organisation manages and hosts over a dozen initiatives. These range from grants and technical support to meetups and educational resources for researchers, entrepreneurs, farmers, investors, and other groups.

We provide: 
  • Training and mentorship (pre18 12 weeks; P18 20 weeks; Xpand 16 weeks)
  • A guide and methodology to track growth and structure the company for scalability
  • Equity-free funding (pre18 $25,000; P18 $40,000)
  • Connections with potential customers in top companies and prospective corporate partners
  • Access to capital through our curated investor network.
  • Additional support through the Puerto Rico Science, Technology and Research Trust in areas such as intellectual property; technical assistance to access funding for research, development, and commercialisation; matchmaking with top research talent and organisations, among other expert resources.

Our acceleration program welcomes companies worldwide to help them scale to global markets. Our team works hard to provide high-quality business education, develop business connections, and create investment opportunities for all our startups.  

  • Over 4,500 applications received (P18 Gens 1 through 10) 
  • 252 companies have completed Parallel18
  • Eighty-five per cent of the companies that have been through Parallel18 are still operating. 
  • Industries – As of Gen.6, 64 per cent of our companies were B2B, while 36 per cent were B2C. The program remains Industry Agnostic, having served entrepreneurs from all areas.

Our local pre-acceleration program focuses on helping innovative, early-stage Puerto Rican startups with global potential to go to market. As a result, we are closing the access to capital and education gap that allows them to focus full-time on their new business and dream big.

  • More than 1,079 applications (Gen. 1, 2, 3, and 4)
  • 138 companies have participated in the program
  • 50 of them have participated in P18
  • Gen. 5 started in January 2023 with 25 startups

Xpand Puerto Rico is a post-acceleration program powered by the Puerto Rico, Science, Technology & Research Trust. It does so through Parallel18, and Banco Popular de Puerto Rico aiming to support growth-stage innovative startups from the Island. Those ready to expand towards achieving sustainable growth and scaling to new markets.

The program seeks to combine Banco Popular’s capabilities and resources with the domain expertise, scaffold, and community of Parallel18’s network. A network comprised of +600 investors and +75 corporate partners. At the same time, leveraging other programs from the Puerto Rico Science, Technology, and Research Trust entrepreneurship pillar programs, such as Colmena66, provides a vast market research database that can benefit participating companies. 

“Puerto Rico’s fintech innovation panorama is second to none. It has numerous companies leading the space amongst its niche areas. Such as credit enhancement, credit access, insurtech, and capital access platforms.”

What are some fintech trends in Puerto Rico, and how do they compare to the rest of the region and the world?

Puerto Rico’s fintech innovation panorama is second to none. It has numerous companies leading the space amongst its niche areas. Such as credit enhancement, credit access, insurtech, and capital access platforms. In addition, we see a lot of innovation in adapting new verticals to attend to socially and economically disadvantaged individuals.

You must understand the strong resilience of Puerto Ricans amidst the different tests of time that have gone through the Island. Hurricane Maria, Hurricane Fiona, and The Great Earthquake of 2020 are just some examples of the hardships.

Local innovators have in mind their capacity to give back to the community while innovating to change the world. This can be clearly seen in how they have adapted their technologies. Furthermore, they have refined their models to attest to both their local population in Puerto Rico and provide access to alternative populations to expand.

We have seen that fintech is still a hotspot for capital allocators worldwide. Puerto Rican startups are poising a paradigm shift into new vertical integrations. This could create an opportunity for bigger and more established institutions to expand via a merger and possibly an acquisition.

What is Parallel18 doing to help improve the sector in Puerto Rico?

The main activity is through our pre-acceleration, acceleration, and post-acceleration programs (pre18, p18, and Xpand, respectively). Nonetheless, understanding the complexity of these companies’ needs and resource access they can benefit from, we have created partnerships with industry leaders for this specific purpose. 

Regarding our fintech startups, we have a strategic partnership with Mastercard. Although it benefits our alums and ecosystem as a whole, it targets additional opportunities for fintech startups. Particularly those in payments.

What are some unique challenges associated with Puerto Rico’s fintech sector?

I wouldn’t select a single challenge specifically targeted to the fintech sector per se. Rather challenges that reflect our innovation ecosystem as a whole. Understanding that Puerto Rico is a small island, the flexibility and scalability of fintech have to factor in its export capacity.

Let’s compare it to the mainland US. An innovative company with similar technology can expand organically through reach and expand to neighboring states with relative ease. Puerto Rican innovators have to compete with exporting to a relatively different geography. Similarly, it happens when Puerto Rican fintech startups want to expand to neighbouring countries in LatAm.

A classic example is an expansion to Colombia or Mexico. Despite being in the highly regulated financial sector, financial technologies have big constraints when it comes to regulatory hurdles. These tend to be costly, thus raising the bar in terms of difficulties for startups in these sectors. Likewise, the differences in customs, culture, currencies, and demographics pose a significant challenge regarding fintech. 

Plans for the future 

During the past three years, we have seen some great innovation in fintech. Particularly in the payments, insurtech, and credit niches. Startups like Raincoat are revolutionising insurance technologies building on the concept of parametric insurance with a streamlined process and end-to-end solutions. All while being trusted by investors such as Softbank, Anthemis, and Divergent Capital.

Another fintech startup work eyeing is Kiwi Credito. It focuses on providing access to small short-term loans, facilitating individuals to build up credit while having easy access to cash. At the same time, Kiwi maintains a high loan repayment and low default rate. 

As we can see, institutional investors have deposited their trust in fintech innovation in Puerto Rico and, indirectly, their trust in Parallel18’s innovation hub. In doing so, they trust its capacity to build strong companies and accelerate competitive workflows.

This is our drive and reason to continue expanding our roadmap and growth plans. We are about to launch our first cohort of Xpand, our post-acceleration program for local startups. This is the first expansion of our hub and the beginning of what we believe will be a global reach. We want to ensure underrepresented and underserved entrepreneurs have access to resources, capital, and network to bring their ideas to the next level.

Final thoughts

As mentioned, in my opinion, the challenges are unrelated to the technology or the innovation but are more associated with the demographics and socioeconomic factors associated with its scalability. Nonetheless, Puerto Rican fintech startups do have a slight advantage in a particular area; the fact that Puerto Rico has a bilingual workforce serves as a window of opportunity for local startups to enter LatAm and mainland US markets while also serving as a target for acquisition for bigger companies in mainland US to enter LatAm, and vice-versa. 


  • Francis is a journalist and our lead LatAm correspondent, with a BA in Classical Civilization, he has a specialist interest in North and South America.

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