Information on the Target

Credijusto is a financial technology startup based in Mexico, aiming to provide accessible, transparent, and affordable financing solutions to the underserved small and medium enterprise (SME) market. The company has demonstrated robust growth in its second year of operations, establishing a solid reputation and an active loan portfolio aimed at supporting SMEs. With a mission to empower businesses that form the backbone of the Mexican economy, Credijusto is positioned uniquely to address the systemic challenges faced by these entities in accessing financial resources.

Offering timely and affordable financing options, Credijusto primarily targets SMEs that represent over 98% of economic units and 75% of employment in Mexico. The startup is planning to utilize the recent convertible note investment from Elevar Equity III LP to enhance its workforce, develop its technology platform further, and expand its geographic reach within Mexico, setting the stage for its upcoming Series A financing round in mid-2017.

Industry Overview in Mexico

The SME sector in Mexico plays a crucial role in the nation’s economy, forming the majority of the commercial landscape and providing a substantial percentage of jobs. Nevertheless, SMEs often find themselves at a disadvantage due to limited access to traditional banking services, which hinders their growth potential. This issue is exacerbated by high-interest rates imposed by non-bank financial institutions, leaving many small business owners vulnerable and with few viable financing options.

In an economic environment where SMEs face considerable funding challenges, innovative financial technology solutions like those offered by Credijusto are essential. These solutions enable easier access to capital, allowing businesses to invest in growth initiatives, hire additional staff, and contribute to overall economic development. The current landscape also highlights a significant opportunity for fintech firms to fill the gaps left by traditional banks.

Mexican regulators are increasingly recognizing the importance of supporting SMEs through favorable policies and financial inclusion strategies. Initiatives to promote digital finance and improve lending practices are underway, creating a more conducive environment for fintech companies. As these trends continue, there is considerable potential for expansion and collaboration between fintech firms and regulatory bodies, improving access to financing for SMEs across the country.

The surge in interest towards fintech solutions is not only benefiting SMEs but also attracting investment from both local and international players seeking to tap into this lucrative market. With a growing awareness of the importance of financial technology in democratizing access to capital, the industry is poised for remarkable growth in the coming years.

The Rationale Behind the Deal

The decision by Elevar Equity to invest in Credijusto stems from the firm’s strategic focus on companies that demonstrate a social impact while also achieving financial returns. By enabling SMEs to secure necessary funding, Credijusto is poised to foster economic growth and mitigate the challenges that these enterprises encounter in obtaining financing.

This investment represents an opportunity for Elevar Equity to engage in a sector that is not only vital for Mexico’s economy but also aligns with the firm’s commitment to improving access to capital for underserved communities. Additionally, the proceeds from the investment will help scale Credijusto’s operations and enhance its market presence, solidifying its position as a leader within the financial technology landscape.

Information About the Investor

Elevar Equity is a human-centered venture capital firm that focuses on supporting businesses that provide essential services to underserved populations. With a deep commitment to generating social impact alongside financial returns, Elevar has made numerous investments in Latin America and other emerging markets.

Credijusto marks Elevar’s fourth investment from its Elevar Equity III fund in Latin America and the firm’s 25th investment overall. Elevar’s reputation for investing in innovative and scalable businesses that benefit low-income communities is complemented by its extensive experience and knowledge of regional market dynamics, making it an ideal partner for Credijusto as it seeks to grow and expand its impact.

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This investment by Elevar Equity in Credijusto is a promising development within the financial technology landscape in Mexico. Given Credijusto's rapid growth and the vital role SMEs play in the economy, the firm is well-positioned to leverage this investment for substantial impact. The growing recognition of the challenges faced by SMEs combined with Credijusto's innovative approach to financing could yield significant returns.

Moreover, Elevar’s involvement brings not only capital but also strategic guidance that could enhance Credijusto's operational efficiency and scalability. The collaboration between experienced investors and a dynamic entrepreneur team could potentially create a robust ecosystem that facilitates better financial access for SMEs.

With the increasing demand for alternative financing solutions in Mexico, Credijusto is likely to experience strong traction as it expands geographically and broadens its loan offerings. The backing from Elevar and other institutional investors provides a favorable scenario for future growth.

Overall, this partnership is a strategic fit given the positive market conditions for fintech solutions aimed at SMEs. It represents a sound investment opportunity that aligns with Elevar Equity’s mission of supporting businesses that drive social impact, making it an encouraging prospect for both investors and the communities they aim to serve.

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