A Visit to Crowdestor in Riga

On invitation of Crowdestor* I travelled to Riga and met the founders of Crowdestor Janis Timma and Gunars Udris. Crowdestor is a Latvian p2p lending platform for SME loans. They launched a year ago. Loans are typically for terms of up to 18 months and interest rates are quite high – the current loan offer by a transportation company seeking expansion capital carries 17% interest rate. The Crowdestor website is available in English, German and Portuguese language. Currently most investors on the platform are Germans, followed by Spanish investors.

We talked about their experiences in launching the platform and I asked how they acquire new clients requiring a loan. Janis explained that at the current stage it all comes down to networking in the business community of Riga. Latvia is a small country, about 2 million inhabitants, and Riga is the dominating city with about one million inhabitants in the larger urban area. He said chances are very good that he has a friend that learned that a company is looking for financing and know someone in the management of the company and can put him in contact.

Crowdestor* then negotiates the loan terms with the business and checks their business records and background. Janis said they have been extra careful with their loans so far, turning down very many requests as the founders understand very well that a default of a loan at this very early stage could harm their fledging marketplace.

Gunars Janis Crowdestor
Gunars (left) and Janis in font of the luxury appartment complex they showed me.

Both are very proud of the projects  financed by the Crowdestor marketplace. They drove me around to show some of the projects. As one real estate project is at the moment only a piece of land, where construction has not yet been started, we went inside another apartment complex finished by the very same real estate developer, so I could experience the high quality of work and the attention to detail. It was an apartment complex with 3 buildings, themed Churchill, Hepburn and Dietrich, located directly on the shore at a popular beach. There is a spa in one of the buildings only for the residents and each building has a concierge.

Another project they were really enthusiastic about is INCH2 shoes a e-commerce venture that designs and sells fancy shoes online and is growing extremely fast. The shoes are produced in Portugal on their behalf. They had a smashing success selling shoes for 1 million EUR turnover on black Friday this year (overall turnover about 5 million EUR in 2018).

INCH shoes
I got a small tour of the INCH2 office and had a look at some of the fancy shoe designs

INCH2 got a 100K expansion loan through Crowdestor earlier this year at 17% interest. Janis explained to me that they actually were looking for a 500K loan, but it was clear that at the current stage of development of the platform Crowdestor would not be able to raise that much cpaital from investors, therefore it was agreed to start with a smaller loan. In 2019 there will be a second loan for INCH2 on the Crowdestor platform.

And that brings us to the current situation. Crowdestor has a pipeline of 7 projects they want to finance in the near future but are aware that they need more investors, to be in a position to fund all these projects. Over lunch at ‘The Catch’ restaurant – really great tasting food by the way I can very, very much recommend that restaurant – and they will open a location in Berlin too – in fact when we were there they had staff of the German restaurant there that was getting training – we discussed pro and cons of possible different marketing strategies and platform features that could help Crowdestor to accelerate growth or the platform.

During a small drive to the city, Gunars showed me where several of the many other p2p lending marketplaces that are headquartered in Riga (most well known is probably Mintos*) are located. Crowdestor itself is currently moving office to have a more space. Gunars told me that they have a good working relationship with the founders of many of the other platforms and are exchanging experiences and thereby benefiting each other.

In fact he arranged a small visit for me at the Viainvest office where we had coffee with Simona the Viainvest CEO, who had wanted to meet in person when she learned that I would be in town. Simona answered my question and gave some details to the current situation of the Viainvest business and future plans (which I am not to divulge just yet, but the company plans to announce them very soon).

At the Viainvest office. The group occupies a two floors in the building.

The minimum investment amount on the Crowdestor marketplace is just 100 EUR, investors can sign up here and check it* out.

I thank Crowdestor for the invitation, the time they took to guide me around and for paying the flights and the lunch.

Interview with Eduards Lapkovskis, CEO of VIAINVEST

What is VIAINVEST about?

VIAINVEST is a peer-to-peer lending marketplace offering both private individuals and companies to invest in consumer loans originated across Europe. VIAINVEST follows worldwide trend and offers investors safe and more effective investment opportunities than traditional banks do. The main aim of VIAINVEST is to ensure outstanding investor support as well as provide easy and accessible investment environment that does not require useless actions or extra time for understanding ongoing processes.

What are the three main advantages for investors?

VIAINVEST is a truly customer-oriented company, and we strive to provide the most satisfying investing experience possible. Great deal of investors’ concerns are related to investment safety, so all loans listed on VIAINVEST are secured with a Buyback Guarantee. Also, to guarantee that one investor will never be 100% committed to particular loan, originators keep 5% “skin in the game” for each loan.

To develop the platform that would be convenient and easy to use, we encourage investors to leave their feedback; each of recommendations is reviewed and most of them are included in our future updates list.

What ROI can investors expect?

Currently investors can choose to invest in loans originated in the Czech Republic with 12% annual ROI and Spain – up to 12,2% annual ROI depending on the loan.

VIAINVEST was founded by the mother company VIA SMS Group. Can you please describe what VIA SMS Group does and why it decided to set up the VIAINVEST marketplace?

The launch of VIAINVEST was great refresh for VIA SMS Group that is alternative finance services provider operating across Europe. Until now VIA SMS Group was mainly operating in consumer lending market but with VIAINVEST the company is making a shift from non-bank lender to a fintech company. Currently VIA SMS Group is offering its services in 5 countries – Latvia, Sweden, Poland, Czech Republic, Spain – and has recently launched several new products to diversify its product portfolio. From the end of 2016 the company is also offering payment card with credit line SAVA.card, savings product VIASPAR for Swedish clients as well as there is still an opportunity to invest into company’s bonds. The company has great development plans, but outstanding customer care will always remain the most important goal.

VIA SMS Group is active in more countries than in Spain and the Czech Republic. Will loans from other countries be listed on the VIAINVEST marketplace soon?

This is actually the next update planned for VIAINVEST – in following weeks we will publish loans originated in Poland and Latvia, Sweden will also follow in the nearest future.

Eduards Lapkovskis, CEO ViainvestIs the technical platform self-developed?

Yes, we have built VIAINVEST from scratch. As we prefer to have full control over all processes, we have great team of IT professionals employed in house to ensure continuous support at any time.

What was the greatest challenge so far in the course of launching VIAINVEST?

As VIAINVEST is not the first platform entering the peer-to-peer lending market, we had a lot of examples to learn from. I can say that there were no critical problems within the development process, adjusting VIAINVEST to the specific needs of investors on the go is more challenging!

Which marketing channels do you use to attract investors?

We mainly use digital marketing, but reaching out to the fintech influencers and opinion leaders is more effective tool to spread a word about VIAINVEST. As clients of peer-to-peer lending platforms are specific group of people with certain interests and goals, you need to be more creative and intelligent within any advertising activities.

Is VIAINVEST open to international investors?

VIAINVEST is open to any investors holding a bank account within the European Union or other country to which the requirements arising from European Union legislation on the prevention of money laundering and terrorism financing apply. Currently there is no legislation in Latvia regulating operations of peer-to-peer lending platforms, but it may be developed in 2017, so VIAINVEST is already implementing existing regulations.

Where do you see VIAINVEST in 3 years?

Fintech is changing traditional finance world in such pace, that it is hard to predict what will happen even in a year. VIAINVEST will definitely continue to expand its loan originator list and implement new features to make online investing mush easier and accessible to everyone. We have great plans, first news will be out soon, stay tuned!

P2P-Banking.com thanks Eduards Lapkovskis for the interview.