Crowdestor review – Meeting the team in Riga

This Crowdestor review is 100% unbiased and based on my experiences.

I recently had the opportunity to visit another crowdlending platform in person. This time, meet the Crowdestor team!

What is Crowdestor?

Crowdestor is a peer-to-business marketplace where approved companies can attract funding to help grow their businesses. 

I first learned about Crowdestor in February 2018 where I made my first investment and also wrote my “Crowdestor – First impressions” blog post.

A little less than 1000 people has signed up on the platform so far. From these, 460 users have completed full registration and verification. Raised funding for projects currently amounts to ~350.000 EUR.

It has been a good experience investing with them so far. Interest payments have been paid on time and the first project I invested in has been paid back already. So I was pleased that they wanted to show me more.

I have invested 8.000€ myself and earned 480,74€ interest. Here is my account overview from November 23st 2018:

You can track the performance of my Crowdestor portfolio on this page: https://financiallyfree.eu/crowdestor_portfolio/ 

It’s updated every month!

Visiting some of the projects

Not only did we have the chance to talk with Gunars Udris and Janis Timma for 2 days, they also showed us some of their projects that are currently available on the platform. 

The INCH2 project

One of the projects available to invest in, is the fast growing and widely popular fashion brand INCH2. They’re signing contracts with wholesale partners and need to up the production capacity. This requires money of course and interest will be paid on a monthly basis to investors.

The INCH2 investment offers a fixed 17% interest rate + up to 5% extra depending on the turn over for the company in 2019. 

They are looking for 100.000€ and 90% is already funded at the time of writing.

Restaurant “The Catch”

On our second day in Riga we had an opportunity to eat at The Catch which is a Japanese Izakaya-style restaurant, focused on terrific raw food and robata-cooked seafood, meat and veggies.

The restaturant in Riga was made as a “proof of concept”. They have done nothing special about the interior or exterior design of the restaurant, they basically just wanted to see if this type of food would be popular.

We had a table booked for 15:00 o’clock but came half an hour early. The place was stuffed! So we had to walk around the city for 30 minutes and come back. 

It was our first visit so the waiter recommended a “tasting menu” where he’d serve a small amount of all their most popular dishes. This way we could try a lot of different things and get more inspiration on what to order on our next visit, he explained.

I didn’t take pictures of all the dishes but here is a small preview for you. Next time I come to Riga (or Berlin soon!) I will definitely come back for more.

My girlfriend loves Chinese and Japanese food, where I’m normally more like “Okay, I’ll go with it if this is what you want tonight darling”. I’m not saying this to promote the platform or the restaurant project in particular, but holy smokes, that food was delicious!! It is hands down the best Asian food I have ever tried. 

The Catch investment offers 18% interest per year and has an 18 month loan period. The project is looking for 100.000€ and 43% is funded at the time of writing.

You can read more about The Catch restaurant on Crowdestor’s investments page.

Real estate projects

The first real estate project we saw was “Development of apartment building Tomsona 6” which is currently available for investment in Crowdestor. 

It’s located in a nice area and as you can see, the project drawing is already in place on the fence 🙂

Current state:

Future state:

The project is looking for 60.000€ and is 58% funded at the time of writing. Interest rate offered is 12% per year and the loan period is 9 months.

The second property we visited, is actually a small treat for you, as we saw another real estate project which is not published on the platform yet. 
So you’ll be the first to learn about it! The project will probably be called “Development of apartment building Matīsa iela 71

Current state:

Future state:

You can read more about the development projects on Crowdestor’s investments page.

Finished real estate projects by the same developer/designer

Andris Riekstiņš, the developer of Tomsona 6 and the upcoming project on Matīsa iela 71, showed us one of the projects he has participated in – project “LEGEND” in Jurmala.

Design and architecture of project “LEGEND” was carried out by OpenAD, the same company that does the design and architecture for Tomsona 6 and Matīsa iela 71.

To see more of OpenAD’s work check out http://www.openad.lv

Project “LEGEND”

Project funding

When you invest in a project at Crowdestor, you will earn interest from the day you click invest. Even if the project is not successfully funded, you will still receive interest for the days between your investment and the deadline for the fundraising campaign.

On other platforms (Crowdestate for example) you will only earn interest from the day the final agreement is signed.

Skin in the game

Crowdestor will always be involved in all projects either as co-financiers (from 2-10%) or as co-developers. I like that! This shows investors that they believe in the investment opportunites presented on the platform.

My impressions of Crowdestor

It’s been a busy year for Crowdestor. They launched the platform less than a year ago and they have several projects in the pipeline already. I think they have shown that they’re focused and ambitious business men. They’re working hard to make a different kind of crowd investing platform with fous on interesting projects. To me, that is a lot more exciting to invest in, rather that just funding another p2p based consumer loan. 

Don’t get me wrong, I will still invest in normal p2p lending, it’s still good money. It’s just more appealing to know, that my investment is actually going to make a difference for a company. More people will be employed and I will contribute to a growing economy because of my investment.

It’s still early to say anything about the successrate of future projects. Furthermore, there’s no buyback guarantee so we will have to trust Crowdestor’s ability to find reliable and successful businesses. In that regard, it’s good to know that they always invest 2-10% in all projects themselves.

Another widely successful platform, Crowdestate, also doesn’t have buyback guarantee. They have a very successful track record and for this reason investors are not concerned about the lack of buyback guarantee. If Crowdestor will be able to show the same kind of track record, I believe they will be a very popular platform in a very short time.

If you like the benefits of being an early investor, this could be a good time to get involed with Crowdestor.

18 Replies to “Crowdestor review – Meeting the team in Riga”

  1. P.S. I know you’re waiting for the FastInvest Review. It’ll be out shortly, I promise!! I just need the final comments to your questions from Simona.

  2. Hi Jorgen,
    Thanks for the lovely Review of the crowdestor. I like what I see and read and their project However I do not like the fact that they have no buy-back option in place.So I will hold of for the time being.

    What happened with your Fastinvest review? Wasn’t the date set for November 14 to visit those guys?

    Thanks and all the best

    Ron

    1. Hi Ron,

      I’m glad you liked it! I prefer buyback guarantee as well, it would definitely be a big plus if they had it as well. They are very selective in choosing projects though. They know, that if just one project has payment problems, they would risk the entire reputation and future of Crowdestor.

      I know they’re in the “think tank” to figure out a way to add an extra layer of protection of security. But it’s probably not going to be 100% buyback guarantee.

      I visited FastInvest on November 14-16. The blog post is already written and ready to be published, I just need the final comments to your questions from Simona. I expect it to be out shortly! Sorry for the delay!

  3. Thanks, Jørgen! Great stuff. Funny, I actually just decided today to start investing with Crowdestor! Your review just confirmed that it’s definitely one to watch! I really like the platforms that pays a monthly interest – it just somehow seems more exciting to see cash flowing in regularly (also makes for more interesting monthly updates! :-p ) – even though the interest rates are often a little higher, on the sites that repays your investment in a bullet payment when they exit the project (like crowdestate and bulkestate).
    It took Crowdestor less than two hours to complete the verification process (today), and with a little luck, my funds will arrive on the platform tomorrow (transferred via Revolut today). I really want to get it on The Catch and Tomsona 6 😉
    It’ll be interesting to see if they get fully funded. Any idea what they’ll do, if they dont? I noticed that both bulkestate and envestio will add extra incentives to projects, if they are having a tough time funding them. Maybe they will do something similar…

    1. Hi Nick,

      Thanks for stopping by 🙂 Great to hear that the registration and verification was smooth and fast for you. I have high hopes for Crowdestor.

      I’m quite sure the projects will be fully funded. If the min. value is not reached I think they will cancel the project and repay investors the interest earned from they day they clicked “invest”. They could also go back to the borrower and try to negotiate better terms and extend the deadline for funding.

      I know they have other projects in the pipeline where the borrower is looking for 500.000€ or more. In these cases it makes sense to split it up into smaller batches or tiers like Envestio does. As an investor I prefer to know the full amount initially though, so I don’t get surprised when additional tiers are added later on.

      1. I agree, the tier xx annoys me a little too. At least they could indicate when they open the project that it’s tier 1 of x. Anyway, as you also note in the review, it’s really cool that you get to feel like you’re actually helping people/a community with your investments 🙂 That’s also why I like these type of investments. I’m not a huge fan of the classic p2p (Mintos/FastInvest etc.) really – but they too have their merits I guess…

  4. Well, in portfolio update was mentioned that FirstInvest review will be released on 20th November. So its already 28th, but ok, never mind about that.

    I would prefere to not even think about investing in FastInvest. If it takes close to two weeks to answer questions, then I can imagine what can happen with your invested money.

    1. Hi Alnis. I’m sorry about the delay. Simona answered all my questions in person when I visited FastInvest. When visiting, I decided it was better to spend the time talking to get as much information as possible, rather than spending the time on writing down all the answers to my questions. I sent the questions to Simona afterwards. The day we left, she travelled to USA for business meetings and came home just a few days ago. We all have been very busy lately.

  5. I’m so ambivalent about all these small P2P/B platforms.

    On the one hand, each of them offers some added value compared to the competition. On the other hand, investment platforms are not grocery shops – we don’t need one on every street corner!

    In finance, size matters. It adds stability. Banks are required to meet certain capital requirements, otherwise they’re simply not stable enough to guarantee the safety of their customers’ money.

    The same is true for investment platforms. If they only have a handful of borrowers, and their only capital comes from the small margin they make on interest payments – they can’t provide stability. What good is Envestio’s default guarantee if they don’t have hundreds of thousands of Euro in the bank? And how can they accumulate such capital when they have to compete over each client with Crowdestor, CrowdEstate, Grupeer, BulkEstate and others?

    I believe in the concept of these platforms, but it seems inevitable that at least some of them will fail – only because of the competition. It’s a shame, and can be prevented if they join forces.

    1. I appreciate your comment Ido. When you look at the recent growth in P2P platforms it seems kinda crazy. However, small businesses have always attracted funding from private investors. Until recently they had to know someone or get introduced to investors through their network. It was hard to find investors but it still happened on a large scale. Now it’s just easier on the internet.

      Some of these “business project funding platforms” existed as private investment funds before they decided to create a platform and invite other investors in. Even without a platform they would still exist, their growth would just be slower. They are actually “joining forces”, not with other platforms like you would like to see, but with other investors. These platforms will not necessarily fail or succeed more than private investment funds have failed or succeded in the past.

  6. Thanks for your review, Jørgen, it makes interesting reading.

    It is re-assuring to know that Crowdestor always takes part in every project as co-financiers and/or co-developers, but it would be even better if they detailed that involvement in each project description.

    Regarding INCH2, I worry about them repaying the loan. Looking at reviews on Trustpilot, customers have difficulty getting their money back when they cancel orders due to failed delivery on-time of their goods.

    1. Hi Rob,

      The comments on Trustpilot clearly indicates that INCH2 needs money to ramp up the production to keep up with the demand. Their boots are too popular and they can’t deliver them fast enough. From a consumer point of view it’s terrible that refunds are not always happening in a fast and professional way.

      They are selling A LOT of boots though, I was just informed about their sales from Black Friday. From an investor point of view I’m not concerned.

  7. Kudos to you, Jørgen. I just received this from Crowdestor:

    Thank you for your investment in the Tomsona 6 project.

    After yesterday’s article in investment blog Financially Free (financiallyfree.eu) about Crowdestor, numerous investors have expressed interest to participate in Tomsona 6 project asking to prolong deadline for the funding campaign. We will extend the term of a fundraising campaign for Tomsona 6 until next Friday, 07.12.2018.

    Good job! Keep up the good work 😉

  8. Honestly, I’m still more convinced of the variety of projects and the Envestio’s default guarantee

    1. I understand Carlos. Crowdestor is just getting started, they will have to prove themselves. There’s still room for diversification in my portfolio though, and I think they offer some interesting projects with good returns as well. I’ll take both 🙂

  9. Hi Jørgen. Thank you so much for all the extensive information about your trips to the Baltics. I love it. Such a different view. What is you affiliate link for this platform? Interesting and diverse projects.

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