EstateGuru

Idea

Introduction

EstateGuru (EG) is the leading Pan-European marketplace facilitating property-backed loans for SMEs and carefully selected investments for our global investor base. By connecting different service providers, SMEs and investors into one single marketplace, we can offer something unique that other financial institutions cannot – the seamless, cross-border and digital service for borrowers and investors. The team consists of 60 professionals from 13 nationalities based in 8 countries.

Since 2014, EstateGuru has expanded to offer investments in 8 countries, facilitating more than €340m worth of loans and rewarding its 80 000 investors with €25m in interest payments.

EstateGuru facilitates projects with a solid real estate collateral, using mortgages to achieve straightforward and secure funding. This model is especially useful for entrepreneurs who struggle with the ‘one-size-fits-all’ policies of banks and gives everyone the opportunity to invest at an average interest rate of 11.4%.

Substantial accomplishments to date

In 2020, EG raised nearly €1m on the Seedrs platform during the most hectic period of Covid19. Despite the market downside and low level of consumer optimism, EG managed to oversubscribe the campaign target three-fold.

EG made a commitment to:
- Increase its loan volumes;
- Expand to new markets;
- Establish the capital markets team;
- Increase the output capability of our IT team.

During the past year, the growth of the business volumes has been great - we exceeded €10m monthly loan volume September 2020. In December 2020, we exceeded €18m and in March 2021 we hit €21m of loans issued!

Morerover, EG managed to fully launch in the Finnish market and is in the final stage of switching over to a fully operational mode in Germany. In parallel, we are preparing the first test and learn loans in the Netherlands.

Within the past year, the company has grown its head count from 43 to 60. In 2020, Dr. Gabriella Kindert joined our Supervisory Board thereby bringing along an extensive experience in the Capital Markets field. In January 2021, we recruited our Director of Capital Markets. Under their command, EstateGuru is moving ahead with executing its capital markets roadmap, the first step of which is finalising the establishment of a debt fund.

Our IT team has increased by 7 FTE-s and main accomplishments in 2020 include:

a) The integration of Lemonway;

b) Implementation of the next phase of automated lead generation;

c) Streamlined back-office process for loan application and scoring.

Monetisation strategy

EstateGuru has several revenue streams and is working on further diversification of the revenue sources.

The majority of the company’s revenue (80%) is generated from success and administration fees paid by the borrowers upon funding process success and during the loan term. The success fees typically range between 2.5-4% which is calculated from the funded volume. Our current annual administration fee is in the range of 0.5-1%.

Additionally, the company earns revenue from transactions that occur on the Secondary Market - a 2% fee is applied to the investor who sells a claim on the Secondary Market.

As the company’s strategy entails securing more institutional capital (10% of loan volume in 2020 vs a target of 30% in 2021), additional revenue is generated from the interest spread, management and success fees paid by these institutions. We believe this source of revenue will start producing an equal contribution to our profit margin as that generated by the success fees from borrowers.

Use of proceeds

EstateGuru is raising its second stage of capital with Seedrs now as part of the ongoing A-Round.

The allocation of the raised funds will be similar to the previous funding round:

EstateGuru continues with fulfilling its expansion roadmap by entering the United Kingdom and the Netherlands;
Recruiting a full Capital Markets team and finalising the set up of a Luxembourg Debt Fund;
Strengthening the IT infrastructure for delivering significantly higher loan volumes and serving 2-3 times more investors than the current 80,000;
New investment product published by end of 2021!