ImpactAlpha, March 7 – Everyday investors have a new impact investing option. Delaware-based Creci recently launched to support impact-focused small and mid-sized companies that further the Sustainable Development Goals.
Like CNote or Worthy Financial, the fintech startup uses Regulation A+ to enable U.S. retail investors invest in notes that fund loans to impact businesses. Its first loans are to businesses in Colombia, where Creci cofounder Andres Idarraga was born. Creci, which means “to grow” in Spanish, plans to extend loans to Latin American and U.S. businesses as well.
“We wanted to test the model out before bringing it to the United States,” Idarraga told ImpactAlpha. It will also seek to attract impact-focused institutions looking for a mission-aligned place to park cash to the platform.
Creci offers investors a flat 5% return. Business borrowers pay between 12% and 22%, with discounts for setting and meeting impact goals. Creci made loans to 60 companies off of its balance sheet before opening up the platform to investors. Its borrowers include including wastewater management company Moksa, BioGar, a maker of non-toxic cleaning products, and Bareke, a marketplace for sustainable, artisanal fashion.
Creci is working with partners to build a pipeline of growth-oriented sustainable businesses. They include accelerator Rockstart Colombia and Sistema B, a nonprofit that promotes B Corps and Benefit and Collective Interest Societies, a purpose-driven business designation adopted by Colombia and other Latin American countries.
Idarraga started Creci while getting his executive MBA at Northwestern’s Kellogg School of Management. The startup also participated in Village Capital’s Finance Forward Latin America accelerator program. It has been funded by its Idarraga and his cofounder Pravin Rodrigues as well as friends and family and grant funding.