Please tell us more about how partnerships could be critical to the success of your innovation.
Terra Nova is at an important inflection point to scale and requires capital to grow.
The most critical partnership for Terra Nova is one that would provide for the discounting of our receivables portfolio. This would resolve our greatest challenge - a cash flow mismatch, enabling Terra Nova to grow much more rapidly than it has to date. It would also provide greater flexibility to enhance our Community Fund. A percentage of Terra Nova’s fees are allocated to this fund for the benefit of the occupants. Its proceeds are used for projects they deem necessary which are beyond the scope of the government’s initiative (e.g., community centers, daycare facilities, etc).
We would like to learn more about how your initiative is financially supported. Please explain your business plan/revenue model
Terra Nova is currently financed through private capital and short term bank loans. We are negotiating the possibility of long term financing to better match the firm’s current revenue stream.
We seek partnerships with financial institutions to 1) create “housing microcredit” programs or 2) securitize our receivables portfolio to attract investors seeking financial and social returns. This type of alliance would allow for the development and implementation of a formal training program to continuously capacitate new operating teams, creating the necessary structure to replicate its model in various cities simultaneously throughout the country. As such we could scale more quickly and expand our services to implement more infrastructure or additional social and environmental projects.
Terra Nova receives a percentage of the monthly indemnification payment made by each household to the land owner. The total amount Terra Nova receives from each occupant averages R$5,000 (~US $2,950), paid in monthly sums averaging R$50. For this service fee, Terra Nova manages all aspects of the regularization process including the legal, environmental, social, economic and urban aspects. Special conditions are made for those families unable to pay this amount, so that they may participate in the regularization process (e.g., reduction of monthly installments and increase in tenor). An additional amount may be allocated to the Community Fund for the implementation of certain public works or the relocation of families in areas considered at risk, for example.