Imagine responsible shopping.
Creo² offers shops a tablet solution to increase their positive impact & communicate it to their customers. In-store promotions like “Buy for 30€ = your shop offers you a positive impact” allow responsible stores to increase their planet-friendly actions without losing money. Everybody wins.
On a tablet at the counter, customers choose which NGO the shop will support: offer a meal to one in need, administer a vaccine in the developing countries, or even plant a tree. For free.
At Creo² we prefer to talk about solutions than problems. Everyone knows the world is facing a tremendous amount of environmental, social and humanitarian issues. Messages are too often negative. Creo² aims to change this: many positive & scalable solutions exist. Our ambition is to put these solutions at your fingertips in any store, and make it fun and enjoyable to have a positive impact.
So how does it work?
- Shops can subscribe to Creo². It’s super simple: they get the installation, tablet & holder for free. They like that! All they pay is a fee that ranges between €0.40 and €0.75 for each positive action selected on the tablet. The exact price depends on their volume (minimum 50 actions/month, i.e. 2 per business day). A caution is asked for the tablet to avoid theft.
- It’s 100% free for the end-user, who chooses the shop’s positive action (3 choices).
- Creo² collaborates with best-in-class NGOs by making donations based on the clicks performed in our stores and making sure the money is used for its purpose.
When installed, the shop owner chooses his promotional message and when to offer a positive action to his/her customers. Possibilities are limitless and can be changed over time: “Buy 3 products = one positive impact”, “Collect 5 stamps on our loyalty card = one positive impact”, “Bring 2 friends to the restaurant = one positive action”, “Buy a dessert = one positive action”, etc.
The picture below shows how it works and what’s in for everyone.
To strengthen our positive impact, our vision is to further incentivize stores to monitor and reduce their footprint thanks to our web platform. How? By allowing them to set and communicate green objectives, share best practices, etc. Everything happens on the tablet.
All in all, why do our clients like us?
- Achievable positive impact: that is what drives us and what people like the most: doing good is now so simple & fun.
- Direct sales: that’s what makes it possible. Traditional marketing techniques are replaced by responsible ones: green promotions, green coupons or green loyalty cards.
- Engagement and image: beyond image benefits and visibility (facebook, etc.), more than 80% of our users talk about their good deed around them. That’s great worth-of-mouth.
Creo² has two objectives : our main objective is to have a societal impact, our second objective is to have a reasonably profitable business. We believe that both are important, as being profitable will allow us to scale our positive impact, continue to innovate and stay competitive.
In practice, what does that mean?
- We put limits on the salaries of our management
- Most of the profit will be reinvested in Creo²’s growth, innovations to increase our societal impact, or directly funded to NGOs
- Our investors are part of the equation to make our model work. Similarly to other startups, our community (shops + users) has a lot of value as such. This means our value will increase as we grow. We believe that our investors can get a significant capital gain for this.
Creo² aims to be as transparent as possible. Therefore, we established an ethical charter available here.
The Creo² tablet solution has been launched two months ago. Creo² now runs in more than 20 shops, mainly in Louvain-La-Neuve. Our Early Adopters helped us to finetune our product to get ready for our quick growth.
NGOs highly appreciate what we do. Creo² does not only give them a new source of funding, but also visibility on the impact they have. We select NGOs based on the quality of their work and to be able to meet any customer’s sensibilities with complementary projects: local and global projects, social and ecological projects.
|Marketing strategy||Spread the word: that’s our strategy. We want to reach 250 to 800 shops within one year, across several sales channels:
– Our sales team: our objective is that one salesman converts one shop per day. We plan to largely rely on external professional sales people: they convert stores in their own region and are paid per converted shop. We already met great candidates. Let us know if you know someone in your region!
– Ambassadors: Our strength is worth-of-mouth, people like free positive impact. Why not allow anyone convinced by the idea to convert a few stores? That will be our ambassadors, who will install Creo² in shops they know and get a financial compensation for this.
– NGO partners: our partners spontaneously suggested to offer Creo² to shops in their network as this is a valuable source of funding for them.
|Internationalization strategy||The Creo² concept is easy to export: even in a situation with only one shop in a country, the shop still has the advantage of being very exclusive with Creo². So it’s easy to start in a new country. It’s also easy to grow, as our clients will then benefit from a community of buyers choosing shops with Creo².
We plan to internationalize as soon as we reach break even, in our second year.
Creo² is rooted in the following societal trends:
- Digitalization of the economy: beyond the explosion of ecommerce, smartphones and tablets, our economy is increasingly going “Phygital” (physical + digital). This means that people more and more use the Internet in real physical places, to improve specific situations in their daily life. An extensive report from Nielsen, a global marketing firm, highlights that this is hapening to stores as well. The stores’ challenges will be to use digital technologies to differentiate and make the shopping experience enjoyable. That’s what we do at Creo²: in a store or restaurant, a simple click on a tablet will provide you a smile and a positive impact.
- Towards a community-based economy: Our human nature is to talk and relate to others, and technologies make that easier than ever before. That’s why social communities arise everywhere (facebook, twitter, etc.). Creo² surfs on this trend, and is building a community about positive impact. It’s not only about the individual impact of stores and shoppers, but also about the collective impact of the whole community.
- The rise of the purpose economy & social business: When Mohamed Yunus earned the nobel prize in 2006 for his achievements with the Grameen Bank (microcredit), the concept of social business got more widespread. These are businesses aiming at solving societal problems by being financially sustainable, and therefore also able to scale their positive impact. Social business has now been acknowledged as an important tool to solve global problems, and an imperative for the future.
In terms of size, there are more than 110,000 shops and restaurants in Belgium (source: eurostat). Creo² estimates that in the long run at least 5% of them (5500) can easilly be seduced by the Creo² concept.
The Creo² concept is unique in the world. However, we identify a series of “subsitutes” targeting similar clients with digital technologies, as shown on the graph below.
Creo² operates in a niche between two types of services:
- Marketing services: The online advertising market has more than doubled in less than 5 years (source: statistica, 2016). Many large and small players offer mainly online marketing services to shops. However, in-store “touchable” solutions are still very rare. With its tablets offered for free to the shops, Creo² has a clear differentiator.
- Loyalty services: in the last 2 years the number of in-store loyalty services has soared. These solutions tend to replace traditional paper loyalty cards by a smartphone app, often with a tablet on the counter. Creo² does not aim to replace loyalty cards. If the loyalty program is working well, no need to change it. We prefer to integrate Creo² into an existing loyalty program: e.g., “5 stamps = get a free coffee or plant a tree”. Moreover, Creo² does not require a smartphone app. This makes it super simple & fast, which is highly appreciated by the shops and the users.
Don’t forget it, our biggest differentiator is about who we are: a social business concerned about societal impact. This makes us different and complementary to the services above. We do not consider these players as direct competitors, but rather as potential partners.
Maxime Van Steenberghe
Nostalgie – Y’a de l’idée dans Creo²
Reconversion pour 3 jeunes bossant dans de grosses boîtes. Désirant donner un sens plus social à leur vie, ils se sont lancés dans le projet Creo². Le but ? Lever de l’argent pour les ONG lorsqu’un client passe à la caisse d’un petit commerçant.
Promouvoir le commerce local en contribuant à un monde meilleur
Creo² est une start-up qui entend faire le lien entre les ONG, les commerçants et leurs clients. Objectif: vendre local et contribuer à un meilleur monde.
Creo² veut créer un monde meilleur
Promouvoir le commerce local tout en aidant le monde.
In 2015, Creo² developed its online platform in collaboration with NGO WeForest. Following the principle of the lean startup, Creo² earned revenues by selling consultancy services and licensing its creo2.org platform: WeForest’s donors could choose in which reforestation project their trees would be donated. Since early 2016, its main focus has been to develop and market its tablet solution for local stores.
Creo²’s financial plan has been developed as follows:
Creo²’s business plan is based on revenue from two different segments, with the following assumptions:
- Stores with 50-100 good deeds/month: This is the main target of Creo², accounting for 70% of Creo²’s shops. Their average budget is 45€/month: on average 60 good deeds per month (2.7 per day) at €0.75 per good deed.
- Stores with more than 100 good deeds/month: Those are shops with larger budgets, benefiting from volume discounts. They account for 30% of Creo²’s shops. Their average budget is 113€/month: on average 230 good deeds per month (10.4 per day) at 0.50€ per good deed. Typically these are larger clients with more than one store and large corporate social responsibility budgets.
Creo²’s main focus is the first category. However, discussions are ongoing at 2 large clients from the second category showing that this is a good way for Creo² to diversify its clients base. Note that scenario analysis in the business plan shows that Creo² is viable without this segment by focusing exclusively on the smaller shops.
A drop rate of 25% is assumed, meaning that every 6 months 25% of Creo²’s shops is leaving the network. In this case Creo² gets back the tablet and holder, which become available for a new shop.
The assumed conversion cost is €412 per shop, composed of sales costs (280€) and material costs (132€). The value of the tablet and tablet holder (material costs) is €195 at purchase, but as it can be reused for multiple shops (see ‘drop rate’ description above), the average material cost per shop is 132€.
Shops pay Creo² a 150€ warranty bail for the tablet (they get it back at the end of the contract). Therefore the capital investment needed per store is €412 – €150 = €262. Taking into account the assumed droprate of 25%, this means that €262 investment results in €669 funded to NGOs and €479 margin to be reinvested in our growth over the average lifetime of a shop. In other words, with the rule of three :
Sales costs account for a large share of revenues (45% in Y3) because Creo² permanently re-invests in its growth. To assess sales costs, Creo² took a very careful assumption to be prepared for the worst. Different clues indicate that sales costs will be lower than assumed: (1) trial days with future salesmen result in a conversion rate of 1 shop/salesman/day. With this ratio, a commission of €120-€150 instead of €280 per shop would be sufficient; (2) our NGO partners are willing to convert stores as well, as they earn donations with it. With lower sales costs than assumed in the business plan Creo² will be able to give more funding to NGOs, and even more multiply its societal impact.
Creo²’s could be financially independent at 400 shops (profit break-even if Creo² stops investing in sales). As Creo² will continue investing in its growth after that point, it will generate enough cash flows to sustain its growth at 1100 shops (cashflow break-even, end 2017).
Before the capital increase in which MyMIcroInvest Finance will participate at the end of the offer, the entrepreneurs of Creo² jointly hold 100% of the shares of the company while the external investors hold jointly 0.0% of the shares.
Forecasted capital increase
The capital increase to which MyMicroInvest Finance will participate is part of a broader funding of Creo² considered between 94,000 EUR and 250,000 EUR.
This funding will be allocated as follow :
– Between minimum 44,400 EUR and maximum 87,912 EUR will be subscribed by MyMicroInvest Finance based on the results of the issuing Notes ;
– A minimum of 50,000 EUR and a maximum of 206,000 EUR will be invested by other investors, i.e business angels.
The value of the company before this increase in capital is presently estimated to be a maximum of 800,000 EUR. Following this increase in capital, the value of the company will be between 894,000 EUR and 1,050,000 EUR, meaning an estimated valuation of 800,000 EUR before increase of capital plus between 94,000 EUR and 250,000 EUR of new money brought in.
Before the capital increase, the 186 existing shares will be replaced so that there is 800,000 shares, 800,000 EUR representing the value of the company before the capital increase, expressed in EUR. This does not affect the present and future allocation of shares.
This capital increase will therefore be done at a subscription price per share of 1 EUR.
The capital will be between 112,600 EUR and 268,600 EUR, constituted as follows:
-18,600 EUR present capital ;
– Between 94,000 EUR and 250,000 EUR of new capital.
The table below indicates the distribution of the shares of the company following this capital increase on the basis of the following assumptions:
– MyMicroInvest Finance will subscribe the maximum amount of 87,912 EUR;
– The other investors, including the entrepreneurs, will subscribe the minimum amount that is allotted them, i.e. 50,000 EUR.
Capital held by MyMicroInvest Finance
According to the effective amount invested by the other investors, the percentage held by MyMicroInvest Finance may be different than stated above.
* The table below presents the percentages of the capital held by the Creo² account of MyMicroInvest Finance depending on the results of the Notes issue (i.e., a minimum of 44,400 EUR and maximum of 87,912 EUR) and the minimum and maximum amounts contributed by the other investors (i.e., a minimum of 50,000 EUR and a maximum of 206,000 EUR).
|Committed by professionals||€45,000|
|Min. total fundraising||€94,000|
|Max. total fundraising||€250,000|
|Post-money valuation min.||€894,000|
|Post-money valuation max.||€1,050,000|