Hei! Järgnev postitus on inglise keelne ja räägib Läti ühisrahastusportaalist Crowdestor. Intervjuu pärineb ajast, mil alles tutvusin ettevõttega. Hiljem märkasin, et nad on seotud Eesti portaali Crowdestate’i Energiatootmishoone projektiga ning selle oma veebi üles pannud, siis küsisin mõne teravama küsimuse Crowdestate’i kopeerimise kohta. Vastuseid lubati, kuid jätkuvalt pole veel saadetud. Ühesõnaga, kui sul on rauast närvid ja julged riske võtta, siis võid mõelda nende kaudu investeerimist. Muudel juhtudel tasub vähemalt esialgu kõrvalt vaadata.
Aga jätkame intervjuuga!
In Estonia we have a saying “tuleb nagu Vändrast saelaudu” which means something is happening faster than expected / hoped / predicted. Well, the same goes with new p2p platforms that are coming to life: there are just so many of them that it’s even hard to count. So without further ado I will introduce a new platform from Latvia: Crowdestor
Gunars Udris from Crowdestor was kind to answer some questions about Crowdestor.
What problem Crowdestor is trying to solve? What type of projects will be listed at Crowdestor?
Since 2007/2008, when the crisis hit economy very hard, banks in Latvia have significantly changed their approach funding business. Today banks are cautious and it is a rare occasion when a project or transaction is funded more than 60% from deal value.
We have made some analysis on financial results for top banks in Latvia in the last 10 years. Very interesting situation can be observed – 10 years ago, by far the main income was from interests, about 13%-20% of total income was income from commissions. Today its different case.
Let’s take SEB bank as an example – in year 2006 income from commissions was 29.1 million EUR, income from interests – 181,3 million EUR, which means only 13.8% from income was generated as commissions, the rest was interest income from loans that were issued. In year 2016 income from commissions was 55.2 million EUR, income from interests – 67.1 million EUR, which means that 45.1% (almost a half!) of income was generated from so to say risk free activities – monthly commissions from payment cards, payment processing etc. The situation with other top Latvian banks are quite similar.
So, it’s very clear that shareholders of banks are in a situation which we would describe as “more than comfortable”. But business is the one that struggles in this situation because of lack of capital, and this is where Crowdestor steps in. There are 2 problems we want to solve – first, we want to ensure that business which has a shortage of capital, has an alternative source of funds, we are talking both – about mezzanine loan and equity. And second, we want to stimulate and reinvigorate the cooperation between Crowdfunding and Banks in Latvia. Because this is a problem currently. Banks consider crowdfunding as grey, unclear source of funds and reject to mutually finance a project. We want to break this conservative assumption. And we are doing it already, as our CEO Janis Timma, has managed to become first person to get approval from a top bank in Latvia to finance a project also raising a part of capital in crowdfunding.
About the projects to be listed on Crowdestor. The main focus in 2018 from project perspective will be on Latvia market. Currently we have identified energy, real estate and transport sectors as the most attractive due to market needs and trends. But we are working on 2 very interesting segments currently. We hope to launch these sectors during year 2018. I will not comment currently more about this, when it comes closer, we will let you know.
We are finalizing last details for one energy business project that will be presented soon via our platform (around April). At the same time, we always will pay attention on the common market and will be open to join the projects outside Latvia.
Who are the people behind Crowdestor?
Janis Timma – has been actively engaged in energy sector since 2010, focusing on development and capital raising for different type and size energy plants. He has been Head of Energy department in BDO Law for 6 years. Since 2013 Janis is CEO of Latvian Cogeneration Association and is having active role in communication with government institutions regarding improvements of energy sector regulation in Latvia. Janis is also CEO and shareholder of 14 MW biomass boilerhouse in Riga. Studied Finance at University of Latvia, Law at Business University Turiba and in WU Executive Academy, program Executive Energy Expert.
Gunars Udris – Entrepreneur with 10 years’ experience in developing and managing projects in different fields. Most projects are in manufacturing and real estate areas. Gunars has been also initiative by organizing different business activities and identifying financial funds for projects if requested. Studied PR and Politics (University of Latvia).
There are couple IT experts within our team and daily support is provided by office assistant. Currently we are in the negotiation process with some well-known experts from Real estate and Banking sectors. Our team pretty soon will become stronger. Information will follow as soon as possible!
Gunars Udris: “We see that most of the projects that will be offered during year 2018 on Crowdestor will be with interest rate starting from 15%.”
Why Crowdestor? There are many P2P platforms available, starting with Mintos, Twino, Estateguru, Bondora, Crowdestate etc. It might seem that Crowdestor is yet another peer to peer lending platform. What is Crowdestor value proposition to its investors? What will you promise to do better than other platforms are doing?
Crowdestor offer different type of business sectors so the investor has options to diversify their investments across different sectors (as previously mentioned, currently energy, real estate and transportation. But soon we will add new sectors).
Crowdestor in every project takes part as co-financiers or/and co-developers with its own money. This ensures that Crowdestor analyses projects and makes decisions with the highest accuracy. Even in this case, when Crowdestor is investing its own money beside investors’ money, investors are always first who will get loan repaid. For us most important is to get credibility from our clients (investors).
What is the expected return to investors?
We see that most of the projects that will be offered during year 2018 on Crowdestor will be with interest rate starting from 15%.
How long is the average project duration at Crowdestor? Can we expect rather shorter duration (up to 24 months) or longer (up to 6-7-8 years)?
If we talk about real estate development or transportation sector, in most cases the duration will not exceed 24 months. If we talk about cashflow objects, the duration can be up to 6-8 years.
Peer to peer lending has really low entry barriers, usually investors doesn’t have to pay any fees and minimum investment amount is around 10 euros. What is the minimum treshold for investing via Crowdestor to any single project? Are there any other fees investors have to pay?
Minimal investment amount is 100 EUR. There are no any extra costs for investors.
In some projects Crowdestor will be having a success fee element. If we will see an opportunity to increase the value for a project, we will have our success fee element. Success fee will be paid only on exit, and in all cases investors will be first to receive funds. If the level of return will not be reached, we will not be having any success fee.
Do you have secondary market? If not, when will you have one?
At the moment no. We plan to have it at the end of 2018. Also, Auto-Invest will be ready at the end of April.
One key component to success is having a lot of investment options so that average Joe type of investors can diversify it’s portfolio within the platform. How many projects do you forecast for getting listed on Crowdestor for the year 2018?
During 2018 we are planning to offer around 10 investment projects.
Crowdestor is Lavian based comapany. On the other hand the company is registered to Estonia. Why do you use such construction?
Yes, you are right that we are based in Riga but registered in Tallinn. The main reason is Latvian FKTK (Financial and Capital Market Commission) position which prohibits crowdfunding operations in Latvia until regulation is not in place.
We started Crowdestor project in the beginning of 2017. It was position from FKTK that regulation will be in place on May 2017. In May 2017 there was no regulation and there was no clarity when it could be implemented. We started to look for other options. One option was Malta other was Estonia. After our visit at Deloitte in Tallinn and meeting with Merit Lind we understood that this is the right place and right persons.
I personally invested via Estonian platform Crowdestate to one project where Crowdestor CEO Janis Timma was the sponsor. Some months after raising capital the project ended. All money was returned to investors plus some interest. Now, just a few months later we can invest via Crowdestor. Not the mention the names of two platforms are almost the same. How can you convince me as an investor that Crowdestor is not just a cheap ripoff?
Yes, our CEO has been main project sponsor in energy sector project partly-financed via Crowdestet, that is true. This is the project which we mentioned in the beginning of email. In our opinion, the project has done a great job as it was first project where Luminor stepped in together with crowdfunding platform. The project was canceled because the counter party unilaterally breached contract. Although the project was not closed, crowdfunding industry did benefit a lot.
But how will we convince you – I believe the projects, our approach (our own financial participation in each project, and principle “investor – first”) and returns will do this job better than us.
We thank Gunars for the quick Q&A.