Armed with a seed investment round of $4.5 million, the Puerto Rican insurance technology company (insurtech) Raincoat is preparing to grow its team, “accelerate expansion into new markets and strengthen the ones we are already in,” said its main executive and founder Jonathan González.
“We want to have more products and strengthen our lines of solutions. Everything will be growth, because the demand has been higher than what we have been able to improve,” added the entrepreneur in an interview with Negocios.
The capital round, the highest ever disclosed by a startup founded and operated from Puerto Rico, la headed the main investment fund in insurtech Anthemis and also has the participation of the second fund interested in this field, SoftBank.
“None of these investors had invested here. It is his first exhibition here,” González pointed out.
It was also backed by the Chilean financial group Consorcio, Miami-based 305 Ventures, New York-based Divergent Capital, and Puerto Rico’s Banco Popular.
“The hardest thing is getting the first yes. Definitely. And it doesn’t matter who else is going to invest,” said González. In his case, the process began in December 2021 and “already in February (2022) we had Anthemis. Between that month and March we closed the rest”.
González stated that this round was the first experience of raising capital “from scratch”, alluding to the fact that until then Raincoat had received injections related to incubation or acceleration programs from entities such as Grupo Guayacán, Parallel18 and the Rising Entrepreneurs Program of the investor’s foundation. Puerto Rican Orlando Bravo.
For this reason, González stated that the Raincoat exercise “is a good case study” for the local ecosystem, where he acts as a mentor and perceives a certain fear of presenting business ideas in truly global environments.
“We wanted to face the difficulty of raising capital from sophisticated investors. That was going to improve our business, because the questions were going to be difficult.”, he exposed.
You have to transmit ambition
Then, when closing the investment with the names to which they aspired, González indicated that “what we are doing is validated, because on the other side you have those who know the business and can give us well-dedicated and particular support to the industry in the that we are”.
to questions of what lessons do you understand that could benefit other local startupsGonzález indicated that it is necessary to prepare to “combat the idea that since Puerto Rico is a small market, what is developed here will be small.”
“You have to reinforce the theme of a global and ambitious vision”, he pointed out.
To this he added being ready to “take 40 slaps and close 4 or 5 of them”, because raising capital requires many meetings and You cannot assume failure just by receiving a couple of “no”.
For his part, Sebastián Vidal, who recently assumed the role of Raincoat’s chief of operations, stressed that an essential part is to prepare with the prior investigation of who really should be approached and with what specific information. “Within a large fund, who are the people who work in these regulated industries? This way it is much more effective”, he presented as an example.
And, as more doors are knocking, he also stressed that the narrative must be adjusted. If you get a “yes” from an investor, if the company has entered another market or achieved any of its goals, it is vital to incorporate those improvements in the presentation to the next potential investor.
The growth map
Today Raincoat offers automated agricultural or catastrophic roofing solutions in this market, Jamaica, Colombia and Mexico. The next ones will be the Dominican Republic and Chile, González said.
In one year, its workforce has grown from three to 11 people, spread across Puerto Rico, the Czech Republic and Colombia, González explained.
At what point do you aspire to be here a year? “We would like to be raising a series A, with a team of 20 people and be 100% self-sufficient because, given the global economic situation, it is prudent for all businessmen to seek ways to be sustainable,” González concluded.