EstateGuru’s ambition is to claim €3-5 billion out of Europe’s total alternative real estate financing market during the next five years.
Approximately 70% of SMEs lack access to credit and have identified this lack of access to finance as a major constraint to their growth (The World Bank, 2019). According to several projections, 12% of all loans are set to be financed by alternative providers, including crowdfunding platforms, by 2025.
“Real estate financing by different digital platforms will increase to €75,6 billion by 2025. In 2016 the amount was €2,85 billion. EstateGuru’s ambition is to take at least €3-5 billion of this expected amount, “commented Marek Pärtel, EstateGuru’s co-founder and partner. “We are going to put Estonia on the map of innovative banking and finance again. Our team collectively has decades of experience in real estate investment management, banking, risk assessment, and building financial technology. And above all, we’ve got the ambition and drive to carry out our mission and change the European real estate market and the way its financing works. We aim to provide people with the means to grow the value of their money safely, “added Pärtel.
“The number of new loans during the first half of the year was valued at €33,8 million. During the same period last year, the amount was €22,6 million, which means we’ve experienced a 49,2% growth. Altogether 7 913 investors joined the platform during the first six months of the year, the growth rate compared to the last year’s same period is 135,4%. Investors haven’t lost a cent of their investments during EstateGuru’s six operating years, and we’ve doubled in size year on year. We suffered the first defaulted loans in our portfolio last year, but our solid focus on risk assessment and debt handling have solved these challenging situations. Thus our investors have not only recouped their investment funds, but also most of their yield after the completion of the debt proceedings” claims Mihkel Stamm, COO of EstateGuru.
“EstateGuru is active in six markets: Estonia, Latvia, Lithuania, Finland, Spain and Portugal. Out of these six countries, only the Lithuanian and Finnish markets are regulated. Until the European Commission regulates the crowdfunding market, EstateGuru will proceed with acquiring local licenses in each of the operating markets. Lithuania has one of the few regulated crowdfunding markets in Continental Europe, and we are officially listed as a crowdfunding operator in that country. We are also in the middle of the licensing process in Finland, which we hope to finalise by the end of this year. And we are also a proud member of the European Crowdfunding Network,” added Mihkel Roosme, Head of Business Development at EstateGuru.
All the emerging sectors, especially those that depend on technology, have clear winners and losers. The success and viability of the platform is defined by the intelligent use of data while building the business and assessing the risks. Besides the manual assessment of investment objects, EstateGuru has also integrated different data platforms and built different models to maximise the quality of the investments made by investors. Besides the data, it’s more and more important to be able to cooperate with traditional banks. One of the most outstanding examples from Europe is the cooperation between LHV Bank and EstateGuru. All EstateGuru investors who have an account with LHV Bank can also see alternative investments like crowdfunding and cryptocurrencies besides their classical investment portfolio.
EstateGuru has over 27 000 investors from 106 countries all over the world. According to a survey that 2229 EstateGuru investors participated in during July this year, 34% of EstateGuru investors searched specifically for alternative investment opportunities and found EstateGuru. 36,5% of investors found information about EstateGuru via blogs, and 15,5% of the investors say that a friend recommended EstateGuru. It’s worth noting that Estonian women are highly active investors. While in Germany, 9% of the investors are women, in Estonia women account for 28%. In the other 104 countries, 12% of the investors are women.
“It’s a pleasure and honour that 84,5% of our investors said say trust EstateGuru between 7-10 on a scale of 1-10. 77% of our investors value the EstateGuru team’s market expertise, choosing 7-10, while 74% of the investors consider EstateGuru their go-to-option for real estate investment,” concludes Marek Pärtel, Co-Founder and Partner at EstateGuru.