In May 2021, the Fagura team set out to raise a €200,000 round to grow a community of investors both in Moldova and abroad and fuel the growth of their P2P lending marketplace. Fagura is a fast- growing fintech company in a totally free market of p2p lending and alternative investments – aiming to become a digital bank. Fagura smashed their target by more than 170%, raising €342,100 from 274 investors.
We sat down with the Fagura team to discuss what their crowdfunding experience was like, and which challenges they’ve overcome.
Tell us about how Fagura started? Where has your vision taken you so far?
It all started when Tudor – Fagura Founder and CEO – was involved in managing a business he established back then. He struggled to get a loan from the high street banks, coupled with bureaucratic procedures and numerous visits to the branches. As a result he started to document alternative sources of financing and that is how he came across P2P lending, a model he liked straightaway.
When you came to Seedrs, why did you decide it was the right time to raise a round?
We felt we were at the turning point, when our business was about to start growing exponentially. We were however facing cash flow issues, being unable to fund further customer acquisitions, product development and enhancement. It is then that we decided we need to raise funds for business development and expansion into other markets.
At the time of your Seedrs round, what other fundraising options did you consider, and why did you choose crowdfunding? What were your goals from crowdfunding?
Our goal was to both raise funds and to grow a community of investors both in Moldova and abroad. We were extremely pleased to see how well our crowdfunding campaign was received. We managed to close the round in less than two weeks and generate an oversubscription of 170%.
Why did you choose Seedrs? Why did you feel we were the right partner for your business?
We were looking for an international exposure and hence we chose Seedrs as the most prestigious equity crowdfunding platform in Europe. We were very serious and determined along the whole process.
What are your thoughts on the popularity of crowdfunding in Europe as a way to raise funds? Do you think this is becoming a more mainstream way to raise funds?
Equity crowdfunding is certainly becoming a trend in Europe. There is an increasing number of platforms in various countries. It serves well the democratization of financing, making it simple and accessible to everyone. Anyone can become an investor in a project miles away while sitting on the sofa. At the same time, investors are concerned with their money and the security of such platforms. There is a great level of trust required and hence only those platforms that can provide it fully will stay in business. No doubt Seedrs will be one of them.
Talk us through what running a campaign was like?
It was quite challenging for us as the audit team at Seedrs did a great job questioning every single statement we used in the pitch deck. While being a relatively long process, it was very useful for us as a team. Being scrutinized by Seedrs and managing to get through it successfully only reinforced our value as a company.
What were some of the aspects of crowdfunding you weren’t aware of that turned out to be essential for a successful round?
It is worth stating that a successful crowdfunding campaign is the one well planned ahead. Even if we managed to close the round in less than two weeks, the work that was put into the fundraise totalled around four months. That included talks with the investors, filming the promo video, P&L analysis and the creation of the pitch deck itself. So the bottom line is that we managed to have a successful round even prior to opening it up.
What were some of the highlights of your campaign?
During our preparation for the Seedrs round we had an offer from an individual to get the full amount from him. It would have been much easier and less time consuming for us. We did however proceed with the campaign on Seedrs. We were keen to give more investors the opportunity to become co-owners of Fagura and its success story.
What investor feedback did you receive, and how has it helped you navigate your crowdfunding campaign and growth?
We learned a very important aspect when dealing with investors, namely that we need to constantly communicate with them. Investors want to get updates at least quarterly on the latest business developments, future initiatives and the progress with our KPIs. Due to bureaucratic issues, we were one month late with our first investor report after the fundraise. That raised concerns among some of the investors, but we managed to mitigate all of them in due time. We are active in the forum and never delay the issuance of our investor reports ever since.
We ended up with 272 investors on top of the funding we received in the Seedrs campaign. One of the investors who truly believed in our company and mission was Cristian Pasa. He is ex-Bloomberg and he eventually joined our executive team, helping with our expansion in Europe.
How would you describe your overall experience working with Seedrs?
It was both a nice and a productive experience. As a team, we went through several other business exits and financing rounds, but the Seedrs campaign was different. It was the first time we experienced the potential of a crowdfunding campaign and the added value a community can bring when financing a business idea. A beautiful experience indeed.
What have the proceeds from crowdfunding round helped you achieve so far, and what plans do you have in the pipeline for the upcoming months?
The funds we raised helped us speed up things at Fagura. We increased the head count at Fagura and commenced working on our mobile apps and the Secondary Market module. They will all be launched this coming spring, together with our lending for business initiatives. And all of this happened while actively working with our lawyers in Romania to apply for an European crowdfunding licence. So needless to say, the raised money helped us achieve our goals for one year in less than 6 months.
Has your customer base increased during and shortly after your campaign? Do you attribute this to your campaign? If yes, to what part of it?
Right after the campaign we experienced a growth in the money invested on our platform. Most of it must have come from the investors in the Seedrs round, who became Fagura’s shareholders. We therefore grew our number of active investors from 200 at the beginning of the Seedrs campaign to 500 at the end of 2021. We managed to reach 1 million EUR worth of loans financed through our platform in December of the same year. 65% out of those are already reimbursed in full amount. Our investor clients have received 168,000 EUR in interest, with an average return of 10-17%.
Fagura was furthermore included in the “The Next 100 Global Awards 2021” by the Global Banking & Finance magazine. It was also nominated as the “Startup with the biggest impact in Moldova” and “Brand of the year in FinTech”. All of these happened in 2021.
Have you seen any wider halo marketing effects of running the campaign with Seedrs?
Certainly, since we were the first startup from Moldova and the second company in the Romanian speaking countries to ever raise funds on Seedrs. As such, we became a benchmark on the local market and managed to attract big interest from the investors in Romania. The latter is a country with 20 million people, around 7 times the size of our original market.
To find out more about Fagura, visit their business page.
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