Spanish impact investor CREAS has raised €40m at first close for its €70m Creas Impacto II fund and announced its first two investments.
Spanish impact investor CREAS has raised almost €40m at first close for its €70m Creas Impacto II fund with commitments from a range of investors, including the European Investment Fund (EIF), Spanish state-owned credit agency Instituto de Crédito Oficial (ICO), the Daniel and Nina Carasso Foundation, and a range of private and institutional investors, including pension funds, religious institutions, foundations and family offices.
The funding round was led by the EIF, which will invest €20m into the fund, a commitment backed by the InvestEU programme aimed at mobilising investment in support of EU policy priorities, such as the green transition. This latest investment follows a 2018 EIF investment of €15m into the Creas Impacto I fund.
ICO’s €10m investment will be made through AXIS, its venture capital subsidiary. ICO is also an existing investor having invested €5m into the first fund.
Like its predecessor, this second fund will invest into companies generating a positive social and environmental impact and providing, what the company described as “transformative solutions to empower people, improve their quality of life, and fuel environmental regeneration”.
Speaking to Impact Investor, Lara Viada, partner at CREAS and one of the fund’s managers, explained its aims: “The fund has three impact themes. To empower people through education and inclusive employment; to care for the vulnerable, with a focus on mental health and care for the elderly; and to accelerate the adoption of regenerative consumption and production models, with a focus on companies working in the circular economy and the agrifood industry.”
“In the past, we invested into sectors such as green energy and mobility but these have become more crowded. With fund II, we really want to focus on those areas where there are few investors, where we have experience and can make a material impact, and in sectors, such as agrifood, where Spain can play an important role.”
Education and residential care
Viada said the fund managers hope to reach their fundraising target of €70m by July 2025 and would invest into 12 to 15 growth stage companies focusing principally on Spain but with the opportunity to invest across the rest of Europe. According to the firm, Spain and Europe present a major investment opportunity with more than 15,000 impact focused companies in mature growth stages that could be considered under the new fund’s investment strategy.
“Our main focus is on Spain but we can also invest into other European companies that have the potential to become transformative pan-European leaders,” said Viada.
The fund has already made its first two investments, including €2m into Zen Educate, a UK-headquartered business, which has created a platform for teachers and teaching assistants to find work in schools in the UK and the US.
“Zen Educate is trying to address the lack of teachers and teaching assistants in the education system. They operate as a marketplace, streamlining and simplifying the job of both finding work and hiring teaching staff for schools, including special education teachers, teaching assistants and substitute teachers.”
Viada said it was difficult to find companies with solutions to structural challenges in the primary and secondary education sector.
“This is a company trying to solve a global challenge with a very scalable model that could reach new markets” she added.
Fund II has also invested €1.5m into MiResi, an online platform helping families find quality care homes for their elderly relatives.
According to Viada, finding good care homes in Spain is made difficult due to a lack of transparency in the sector.
“MiResi creates greater transparency by providing detailed descriptions and reviews of care homes, including testimonials from residents, which can help care homes make targeted improvements to their service offer and families to make better decisions about the best fit for their relatives,” she said.
“They already work with around a fifth of the care homes in Spain and have the potential to reach a scale where they can really be transformative.”
CREAS has also signed a partnership with Tyton Partners, an investment banking and strategic consulting firm in the field of education technology and knowledge services, to strengthen the fund’s origination, research and value creation capabilities.
Impact investing in Spain
Impact Investor recently reported on the approval of the €400m Fondo de Impacto Social (FIS), a social impact fund, by the Spanish government, highlighting the growth of the Spanish impact investment market over a short period of time.
CREAS has also drawn attention to the significant increase in capital supply into Spanish impact investments in recent years. It highlighted the important role of investors like the EIF and ICO, which it said have contributed significantly to the sector’s development in Spain.
“The impact market is not as developed in Spain as it is in the UK or France for example, but it is growing steadily. The launch of the FIS is expected to have a catalytic effect and we hope to have them as one of our limited partners in the new fund,” said Viada.
Viada explained that CREAS, which was originally established as a foundation in 2008, launched its first pilot impact fund Creas Desarolla in 2012, followed by Creas Impacto I in 2018, which she said was Spain’s first institutional impact investment fund.
