IGNIA Fund I Invests US$2 Million in Innovative Affordable Housing Development in Mexico

IGNIA Fund I, LP announced today that, through its wholly-owned subsidiary IGNIA Bienes Raices S. de R.L. de C.V., it has entered into its first real estate transaction, an investment of US$2 million in the second stage of Jardines del Grijalva, a housing project in Chiapas, Mexico, enabling the expansion of the development to include affordable housing. As a result, Jardines del Grijalva will offer over 800 additional homes for families earning less than US$8,888 a year (or approximately US$2,222 per person).

With its investment, IGNIA is addressing the persistent funding gap faced by small and medium-sized construction companies as they seek to tackle the enormous housing deficit in Mexico. Jardines del Grijalva is being developed by Premezclados Industriales, S.A. de C.V. (“Casas Premin”). “Critical to the success of affordable housing developments in Mexico is deep knowledge of local markets, strong relationships with municipalities, and expertise and cost-effectiveness in the execution of the construction,” said Alvaro Rodriguez Arregui, co-founder and managing partner of IGNIA. “We found all of these elements in Casas Premin and we are delighted to be their partner.”

The new houses offered by Casas Premin are a response to the severe lack of affordable, quality houses in Mexico, where the current housing backlog is estimated at 14.3 million homes. 70% of the Mexican population earn less than US $3,500 per person per year and are in the base of the socioeconomic pyramid (“BoP”). For the portion of families at the BoP that are formally employed and have access to credit, the Jardines de Grijalva expansion will provide a sorely needed supply of affordable homes with basic infrastructure (including water, electricity, sewage and roads). For those in the informal economy without access to credit, an estimated 69% of the Mexican workforce, the new development offers groundbreaking mortgage financing by developing a partnership with a new type of lender. This creative multi-party solution breaks the barriers that deny half the population of Mexico access to a decent home.

“Through investing in innovative affordable housing solutions, IGNIA is helping to provide the BoP with access to a decent home, access to basic services such as water, electricity, and sewage systems, and most importantly, the opportunity to build a family’s net worth,” said Michael Chu, co-founder and Managing Director of IGNIA.

Jardines del Grijalva is IGNIA’s second investment, and its first in affordable housing.

IGNIA Fund I, LP is a social venture capital fund that invests in high growth businesses in Mexico and other regions of Latin America. By providing effective responses to the enormously underserved needs of the low income population, both as consumers as well as active participants in productive value chains, IGNIA empowers entrepreneurship and generates social impact while creating attractive financial returns for its investors. IGNIA invests approximately $2 – $10 million per company over the life of the investment.

Casas Premin is a medium-sized construction company headquartered in Oaxaca that has built and sold more than 3,000 houses for different economic sectors mostly in Oaxaca and some in Queretaro and Quintana Roo. In addition to its expertise in building houses, Casas Premin has vast experience in the execution of general urbanization of developments, road paving, construction and remodeling of water treatment plants and other structures. “

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