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Estateguru

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Estateguru is the leading cross-border marketplace for short-term property backed SME loans.

288%
 - 
Funded 27 Apr 2022
€500,000 target
€1,553,850 from 1,401 investors
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Business overview

Location Tallinn, Estonia
Social media
Website estateguru.co
Sectors Finance & Payments Digital Mixed B2B/B2C
Company number 12558919
Incorporation date 24 Oct 2013
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Investment summary

Type Convertible
Discount 20%
Share price N/A
Tax relief N/A
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Business highlights

  • €201m property backed SME loans funded in 2021 (€540m total)
  • Expansion to Germany and UK preparations completed
  • 125k registered investors - 32k in 2021 vs 25k in 2020 (+28%)
  • Set up of capital markets team and LUX Credit Fund
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Key features

  • Secondary Market
  • Seedrs nominee min. €10.00 +
  • Idea
  • Key Information
  • Team
  • Updates
  • Investors 1,401
  • Discussion
  • Documents

Learn more about convertible campaigns.

Idea

Introduction

Estateguru (EG) is the leading Pan-European marketplace facilitating property-backed loans for SMEs and providing carefully selected investment opportunities for our global investor base. By connecting different service providers, SMEs and investors into one single marketplace, we are able to offer a seamless, cross-border and digital service for borrowers and investors. The team consists of 117 professionals from 18 nationalities based in 8 countries.

Since 2014, Estateguru has expanded to offer investments in 8 countries, facilitating more than €540m worth of loans and rewarding its 125k investors with €41m in interest payments.

Estateguru facilitates projects with solid real estate collateral (1-st rank mortgages), to achieve straightforward and secure funding. This model is especially useful for entrepreneurs who struggle with the ‘one-size-fits-all’ policies typical of banks. At the same time, it has provided a historical average interest rate of 11.2% to retail investors.

Substantial accomplishments to date

EG has already conducted 2 successful Seedrs campaigns (>€1m in 2020 and >€1,3m in 2021 ). These were dedicated to increasing EG’s investor network across Europe, while providing the opportunity to become a shareholder via Seedrs. The last campaign was filled within only 8 days!

During the previous campaign EG made a commitment to:

- Increase its loan volumes

- Expand into new markets

- Establish the capital markets team

- Increase the output capability of our IT team

On the Sales side EG established new monthly sales records throughout 2021 and closed the year with €202M of loans funded (€120M in 2020).

Of this, ca €69M was funded in Germany, and we also began financing the first projects in Spain. EG has also launched in the UK market.

The company has grown from 60 employees to 117 YoY, investing heavily into HR with a view to achieving new levels of growth.

A strong Capital Markets team was hired:

Judith Tan (Head of Capital Markets) - previous experience includes positions with Morgan Stanley, Lehmann, Commerzbank, and Nomura.

Paavo Põld (Director of Capital Markets) - previous experience includes positions with Hansa Investment Funds, and Limestone Fund.

The EG LUX Credit Fund was established with the EIF (European Investment Fund) being the lead investor in the Fund.

Our IT team grew to 25 FTEs. Amongst their main accomplishments in 2021 were:

a) Investment Strategies was introduced to investors;

b) Heavy infrastructure improvement in terms of Architecture and Data.

Monetisation strategy

EG has several revenue streams and we are working to further diversify them.

The majority of the company’s revenue (80%) is generated from success fees paid upfront by borrowers during the transaction. Sometimes administration fees are applied, which are paid on completion of the project. The success fee typically ranges between 2.5-4% of the funded volume. Annual administration fees, when applied, are 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 when an investor sells a claim.

The company’s strategy entails securing more institutional capital (15% of loan volume in 2021 vs our target of 60% in 2022), as additional revenue is generated from the interest spread, management and success fees paid by these institutions. Our goal is to increase this source of revenue so that its contribution to our profit margin is equal to that generated by the success fees from our borrowers.

Use of proceeds

Continuing its success story and taking the business to the next level, EG is currently raising its third stage of capital with Seedrs, as part of the upcoming B-Round.

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

1) Expansion - EG continues with fulfilling its roadmap by entering:

The United Kingdom - Having hired our first staff members and opened an office in Manchester, the funding is needed for new hires, legal costs, partnership fees and marketing.

Netherlands - Legal preparations are in progress and Country Manager recruitment is ongoing.

France - planned.

2) Capital Markets - Strengthening the team and widening the Institutional Capital sources via the Luxembourg Credit Fund and several other credit lines. New investment products are planned for the 3rd or 4th quarter of 2022!

3) Technology - IT infrastructure investments for delivering higher loan volumes and supporting the growing investor base;

Focus on data and architecture.

Key Information

Advance Subscription Agreement

This investment round is being raised by way of a convertible equity investment structure, in this case an "advanced subscription agreement".

The key terms that apply to the Company’s advanced subscription agreement are set out below. See also attached Key Terms document for further details.

• Discount: 20%

• Valuation Cap: €170,000,000

• Conversion is triggered by ("Trigger Events"):
- An Equity Fundraise – defined as the Company raising investment capital of at least €2,000,000 from one transaction or a series of transactions, in exchange for the company issuing of shares;
- A Change of Control of the company (transfer of more than 50% of the share capital); or
- An IPO – being a listing of the company’s shares on a recognised stock market or secondary market.

• If a Trigger Event occurs, the ASA will convert at:
- the lowest price paid per share in connection with the Trigger Event, discounted by the Discount; and
- the Valuation Cap divided by all issued shares and outstanding options and equity interests in the Company, discounted by the Discount.

• Longstop Date: 24 months from signing of instrument. (Note: this will be after the campaign closes).

• If conversion has not been triggered by the Longstop Date shares will be issued on the longstop date at the Default Share Price, which is:

- the lower of (i) the lowest price of any share issued after the date of the agreement; and (ii) a price per share of €3,607 (the share price set by the previous round with an implied company valuation of €49,019,130).

• The convertible would also convert to equity at the Default Share Price in the event of winding up or liquidation of the company.

Share Classes

The company has two share classes:

Preferences Shares and Common Shares. Preference Shares receive a 1x non participating liquidation preference. Both shares have voting rights.

In the case of default conversion upon Longstop Date, investors will receive Preference Shares.

In the case of a Trigger event, investors will receive the highest class of share issued in the triggering round.

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If you successfully purchase a share lot of this business, you will be granted access.

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Only shareholders can access this page

If you successfully purchase a share lot of this business, you will be granted access.

Buy shares

Only shareholders can access this page

If you successfully purchase a share lot of this business, you will be granted access.

Buy shares

Share on:

Investing involves risks, including loss of capital, illiquidity, lack of dividends and dilution, and should be done only as part of a diversified portfolio. Please read the Risk Warnings before investing. Investments should only be made by investors who understand these risks. Tax treatment depends on individual circumstances and is subject to change in future.

This webpage has been approved as a financial promotion by Seedrs Limited ("Seedrs"), which is authorised and regulated by the Financial Conduct Authority. It is not intended to be a promotion of any individual investment opportunity and is not an offer to the public. The summary information provided about investment opportunities on this webpage is intended solely to demonstrate the types of investments available on the Seedrs platform, and any investment decision should be made on the basis of the full campaign. Full campaigns are available to investors who have become authorised to invest on the Seedrs platform. All investment activities take place within the United Kingdom, and any person resident outside the United Kingdom should ensure that they are not subject to any local regulations before investing.

Seedrs does not make investment recommendations to you. No communications from Seedrs, through this website or any other medium, should be construed as an investment recommendation. Further, nothing on this website shall be considered an offer to sell, or a solicitation of an offer to buy, any security to any person in any jurisdiction to whom or in which such offer, solicitation or sale is unlawful. Seedrs does not provide legal, financial or tax advice of any kind. If you have any questions with respect to legal, financial or tax matters relevant to your interactions with Seedrs, you should consult a professional adviser.

Tax Relief (SEIS)

This business is eligible for SEIS relief - providing qualifying investors with income tax relief of 50% of their investment and certain other tax reliefs. Tax treatment depends on individual circumstances and is subject to change in future. Click to learn more.

Tax Relief (EIS)

This business is eligible for EIS relief - providing qualifying investors with income tax relief of 30% of their investment and certain other tax reliefs. Tax treatment depends on individual circumstances and is subject to change in future. Click to learn more.

Valuation (pre-money)

Valuation rounded from Convertible

This is the fully-diluted pre-money valuation of the business (i.e. before the new investment comes in and including issued options and other equity interests). In contrast, the post-money valuation is based on inclusion of the new investment in the value.

It is calculated as the pre-money valuation plus the amount of new investment. e.g. If Company A is ascribed a pre-money valuation of £1,200,000 by prospective investors investing £300,000, its post-money valuation is £1,500,000.

Pitch type

There are 5 types of investment pitch available on Seedrs.

  • Equity
  • Convertible
  • Fund
  • Cohort
  • Secondary

Investing in a convertible campaign allows you to invest today, with your investment converting into equity in the future, at a discount compared to other investors.

Learn more about pitch type on Seedrs

Equity Offered

The equity offered is the percentage of the company’s shares being issued in return for the amount of investment raised.

When the amount raised is less than 100%, the equity offered is based on the target raise. Once the company has raised over 100% it is based on the total raised.

In some scenarios, entrepreneurs may accept additional direct investment after closing their Seedrs campaign. Provided this is within 6 months of the closing and on the same terms, we do not typically offer pre-emption rights on that extra investment (where you have the opportunity to invest again to maintain your percentage shareholding).

Learn more about investing and pre-emption rights.

Seedrs nominee

This shows if you are able to choose, when making an investment, that you be represented by, and your shareholding be managed by, the Seedrs nominee.

Find out more

Custodian

If you invest in this Campaign, Seedrs will act as Custodian rather than provide our standard nominee service. This is due to the fact that the business is not directly involved in the share sale and Seedrs will not benefit from any rights under a shareholder agreement. As a result, Seedrs will handle administrative tasks as we do normally, but you will not have information or voting rights, updates from the business, preemption on future fundraising, or ongoing support about business trading activity.

Learn more about Custodian here

Secondary market

This shows if the business has opted-in or opted-out of allowing its shares to be bought and sold on the secondary market.

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Direct investment

This is an option to invest and hold shares 'directly' in the company (rather than via the Seedrs Nominee). This option is only available to those investing over the threshold amount, which is determined by the fundraising company.

If you choose to hold your shares directly, you will be responsible for any contractual or administrative arrangements with the company you are investing in.

Find out more

Payment options

We are not able to accept card payments for investments into this sector. You can pay for your investment by creating a bank transfer, using funds in your investment account or create a Pay by Bank payment. Your investment will only be completed once the funds have reached our account.

Business Involvement

This Campaign offers shares for sale in business that is not directly involved in this Campaign or the sale. As a result, the Campaign and post-investment experience, including investor rights, will differ from a business-led campaign on Seedrs. Most notably, the business will not engage with investors in the discussion forums both during and after the sale or provide any updates to investors.

Learn more here

Payment options

We are not able to accept Pay by Bank payments for investments into this sector. You can pay for your investment with a card payment, by creating a bank transfer or by using funds in your investment account. Your investment will only be completed once the funds have reached our account.

Drawdowns

This campaign offers the ability to pay for an investment by drawdowns.

Warning

You are following a link outside of www.seedrs.com.

None of the information in constitutes part of the campaign and it has not been approved or reviewed by Seedrs.

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