EstateGuru

Idea

Introduction

EstateGuru is the leading Pan-European marketplace that facilitates property-backed loans for developers/SME-s and carefully selected investment opportunities for our global investor base. Our ambition is to become the biggest real estate financing platform in Europe by 2025 and we will strive to achieve this by offering the best quality digital experience for our borrowers and investors.We are developing a digital and borderless ecosystem for property financing in Europe and beyond. Our unique value proposition is to connect various real estate market participants into one single marketplace by creating seamless, cross-border and digital financial solutions. This is something that other financial institutions struggle to provide.
While growing 2x every year and becoming continental Europe’s largest property lending marketplace we have financed more than €200 million worth of loans with a growing base of 46,000 investors from 106 countries. EstateGuru has offered its investors a stable 11.8% annual return and €0 loss of capital over 6 years of operations.

Intended impact

EstateGuru was created as a result of the last financial crisis when a group of real estate experts from Estonia had an idea. What if they broke down the barriers ensuring that investing in secured property loans was only available to the wealthy and well-connected? And what if they could also help entrepreneurs in the property business who struggle with ‘one-size-fits-all’ solutions offered by traditional financial institutions? In 2013 EstateGuru was born.
Today, EstateGuru’s investors have contributed to building thousands of homes and creating new jobs, leaving a lasting impact on society. Our service is used by both institutional and retail investors across the globe to build diversified investment portfolios and gain access to one of the safest asset classes - real estate backed loans. At all times, continuous liquidity and flexible funding is vital for all businesses. Therefore, EstateGuru and other alternative lenders are increasing their market share in property funding.

Substantial accomplishments to date

EstateGuru has funded more than €200 million worth of real estate backed loans in 7 countries - Germany, Finland, Estonia, Latvia, Lithuania, Spain, Portugal and earned our investors €14 million in interest;

Revenue earned in 2019 is €2.5 million, Q1 2020 revenue is €0.94 million (2.5x growth compared to Q1 2019);

EstateGuru is operating profitably;

Successful pre-A round with VC fund Speedinvest in 2018;

Repetitive investor rate 90%, repetitive borrower rate 50%;

€100+ million of assets under management;

Market-leading returns - average historical annual return for platform's retail investors has been 11.8% and as of today, loss of capital on the platform is €0;

Successful cooperation with multiple institutional investors, most prominent being Varengold bank from Germany;

Largest alternative property lender in continental Europe (Brismo.com);

Having started in Estonia - the most digital society in the world - 90% of our core processes are automated and digitalized. This helps enable us to cost-efficiently expand our business to new markets using agile processes;

EstateGuru has operating licenses in Lithuania and the UK (FCA p2p lending license);

First API connection with a traditional bank (LHV) that enables its users to see their EstateGuru profile directly from the LHV banking interface;

Nominated three years in a row (2017-2019) as top 100 Proptech in Europe by Real Estate Innovation Network;

EstateGuru was nominated Top 3 Best Fintechs in 2019 by German-Baltic Chamber of Commerce;

International team of 44 experts.

Monetisation strategy

The majority of the company’s revenue (80%) is generated from success fees 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 loan volume. Our current annual administration fee is in the range of 0.5-1%.
Additionally, the company earns revenue from all 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 (just under 10% of loan volume in 2019 vs target 40% in 2020), 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

The Seedrs campaign forms part of a larger A-round we are planning (€5 million).

33% of the proceeds will be invested in geographic expansion.
This includes the legal set-up, hiring a local team, developing local partnerships and initial marketing costs in the market.

28% of the proceeds would be invested in the institutional investors’ area.
This includes hiring a capital markets team, legal set-up of new products and contracts, developing institutional investor networks, developing instant data sharing (reporting environment & API integration), and developing an online interface for institutional partners.

39% of the funds will be invested in advancing EstateGuru’s technological capabilities.
This includes onboarding additional engineering and product management resources, executing a data road map, advancing partnerships and integrations with third-party service providers, further digitalization and investment automation, and investments in EstateGuru’s tech-infrastructure.