Dear community,

There is a Portuguese proverb I keep coming back to: “Longe da vista, longe do coração”. It would translate directly to “Far from sight, far from the heart“, a different version of the English proverb “Out of sight, out of mind”.

A couple of weeks ago I was in Porto to visit my family and I went to the opening of the new Norm. A beautiful project created by three women entrepreneurs who got together to challenge the status quo, or to normalize (hence the name), menstruation conversations and habits by designing absorbent underwear and beachwear. They say “it’s bloody normal”.

Leading a company in impact finance or sustainability can be additionally challenging. It is our “why” that keeps us going and it becomes very clear when I see it firsthand. This reminded me of a term coined by my co-founder Manuel, who has left Goparity to take his commitment to public service even further, in a political role focused on the energy transition. He used to say: we’re the “silent enabler”, people don’t see us but we made it happen.

Earlier this summer, during a weekend with friends, we drove by a “Luz Verde” outdoor in the highway, saw the people in the table beside ours having a “MAI Kombucha” (in a beach bar at sunset), a friend chose “Fita Preta” wine for dinner, and someone brought up how much they enjoyed going to “Chefs on Fire” last year. None of them had any idea all these things were related to us. To you.

This is what being a “silent enabler” means: you may not see us, but you made it happen.

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Highlights of the quarter

• Equity investing has arrived at Goparity, and I’m genuinely excited about this new chapter. Over 300 people signed up for our webinar on how equity investing works at Goparity, and the recording is available for anyone who couldn’t join. The first offer is going live really soon.
• Goparity now speaks Italian: the website and the app are fully available in Italian. More exciting news and projects are on our way.
• BOIL Climate Festival held its third edition in Porto, financed by our community. We joined with a CO₂ calculator for visitors’ travel emissions.
• Norm. opened its new store in Porto, financed by 188 people from our community, who invested 30,000€ in just 30 minutes.
• Agrarian Cooperative Sangareni became the first Peruvian organisation to raise funds through Goparity, with 487,335€ from our community.

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A renewed policy for safer investments

Crowdfunding, whether in loans or equity, always implies “capital at risk”. At Goparity, we have worked to mitigate these risks from day one, applying a risk policy that estimates a project’s probability of entering arrears (or default) and rates it from A to D. To date, we have not published any projects rated below C minus.

We always knew that a rating alone wasn’t enough. For projects presenting a higher risk, we usually asked for additional guarantees, such as collateral, personal or shareholder guarantees or a pledge of credits.

Our track record in recovering funds is solid, with 46% of the capital from late or missed instalments since 2020 already back in investors’ hands, but the path to get there takes time (about a year and a half on average) and requires complex negotiations, including asking ourselves questions like: to what point shall we give this company another chance? Does their impact deserve the effort? And, quite often, lengthy judicial processes.

It became clear we needed to go further in two ways: 1) increasing security and 2) speeding up recovery.

Here’s what changed:

• Every new loan will require a real guarantee, such as collateral, an asset, or a personal or corporate guarantee (except for projects rated A, and you’ll understand why very soon).
• Every promoter will also sign an executive title, such as a promissory note. If a loan defaults, this lets us go straight to enforcement instead of first spending time in court just to have the debt recognised.
• We will prioritise the markets where we have built the most experience and legal support over the years: Portugal, Spain, Italy, Peru and Colombia.
• When the guarantee is a physical asset, we will lend no more than 70% of its value, leaving a margin of safety for depreciation and recovery costs.
• No single promoter, or group of related companies, will represent more than 5% of our portfolio, across all their campaigns.

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What’s ahead

Over the past months, our tech and product teams have focused on strengthening the platform, the integration of users and data resulting from the acquisition of Bolsa Social, and resolving issues with our payment services provider that may have affected your top ups or withdrawals. With those foundations in place, here’s what’s coming in the next quarter:

• More equity offers: with the first one on the table, you can expect a few more offers to be launched before the end of this year.
• Bolsa Social investors will soon follow their equity investments directly on Goparity.
• My Portfolio, in the Goparity app, now shows your Total Return: how what you’ve received and what you’re owed compares with what you’ve lent through Goparity, since your first investment.
• The Christmas giftcards are back: gifting purposeful and wasteless? This is for you!

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The Impact Angels Club is gaining momentum and we’re already more than halfway through the total number of members we aim for. If you’d like to join an investment club with some of Iberia’s most experienced business angels register here to let us know about your interest, your “why” and we will be in touch.

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Credit recovery & portfolio update

Since April, our credit recovery team has recovered 476.996€ for our community. In the same period, 18 more projects were fully repaid, bringing the total amount of fully settled projects to 184 of the 456 projects financed on Goparity.

We have also brought 29 projects out of arrears since April (21 of them fully up to date today) and restructured three loans in order to allow for the project promoters to continue their impactful projects with a new payment schedule that fits their financial projections.

It is normal in crowdlending, and lending overall, to have a share of your portfolio in arrears. It doesn’t mean capital is lost. I know waiting can be frustrating but recovery takes time, especially once cases reach court, but we’re on it, and we’ll keep you updated whenever there’s progress to share. As usual, the most important best practice is to diversify: the more projects in your portfolio the more diluted potential losses get, thus, the higher your return.

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Music note

This time, I’m handing this section over to Mariana, our Head of Marketing, who reviews these letters and brings some data into the mix. While working on this one, the idea of being a silent enabler reminded her of a song she’s been listening to: “With My Own Two Hands” by Ben Harper. For her, it’s a song about ownership, a reminder that we have the power to promote change with our own two hands.

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As always, feel free to reach out to our team if you have any comments or questions.