According to Mihkel Stamm, CEO of Estateguru, achieving profitability is crucial not only for the company’s owners and team but also for all investors using the platform. “In fact, it is important for every investor to know that we have managed to make our business model profitable and sustainable. This is encouraging and inspiring for everyone, but to achieve this, we had to further reduce costs and increase revenues,” commented Stamm on the importance of the changes. This week, alongside additional cuts to operating expenses, the company was forced to lay off a fifth of its employees. “These are never easy decisions, but we need to be able to operate efficiently because that is what is expected of us today,” Stamm affirmed.
With the price list adjustment effective from June, the transfer fee for payouts was raised to three euros, and accounts that have not made any new investments for over 12 months will incur a fee until they resume investing. “The goal is to streamline the entire portfolio and implement fees for services to establish a comprehensive model. We believe it is entirely logical that an active investor has lower costs associated with the technical management of their account. At the same time, making just one investment per year is enough to avoid the so-called inactivity fee,” explained Stamm, who believes that for active investors, the expected return on their money is significantly more important than the fees.
The Estateguru CEO confirmed that following major reforms, the portfolio of new loans issued last year is performing excellently – out of nearly 100 million euros, 40% has already been repaid, over 55% are active, and even for the 3.6% that are behind schedule, the company does not anticipate significant issues. “We have been able to offer investors a return of over 10% with strong collateral, such as real estate,” emphasized Stamm, adding that in the first quarter of 2024 alone, new loans amounting to 34 million euros were issued, of which 13 million were in the Estonian market.
According to Stamm, Estateguru made a turnaround a year and a half ago, shifting from a company growing at any cost to a successfully functioning enterprise. “The initial cost was high, but the changes have yielded good results. Last year, there were several months when we were running at a profit, but understandably that is not enough yet. The latest changes give us and, more importantly, our clients confidence in the future of a strong and functioning platform.”
