How would you describe Grupeer platform?
At the moment, Grupeer Platform operates only as an electronic marketplace for sale of debtor indebtedness. It is possible to acquire assignments of already issued loans on the Platform. But we hope that in the near future Grupeer will become a multi-functional Platform where it will be possible not only to acquire debt claims, but also to invest in bridge lounges of German development companies. We have also developed mechanisms for investing in purchase of rental real estate via crowdfunding. At the moment these mechanisms are being coordinated with the Regulator. Unfortunately, this process is not fast.
What are the three main advantages for investors?
- Grupeer has a very experienced team of professionals in various business areas. The company’s management includes professionals with experience in implementing large investment projects in development, electronic money, e-commerce, and raising EU structural funds. Specialists of highest qualification in finance, accounting and law are retained as developers of new products.
- Grupeer has a very modern accounting system that allows to manage simultaneously both P2P-P2B programs and crowdfunding.
- We pay great attention to the support of our customers. By means of support e-mails the client can get not only current technical support, but also explanations on the legal mechanism of transactions, and even consultations on national legislation of its jurisdiction insofar as it relates to cooperation with the Platform.
What ROI can investors expect?
13-14% per annum at the moment. In the near future, there will be proposals with a rate of 15%. Proposals will be related to the Russian loan market. Assignment agreements in the stage of signing.
Is the technical platform self-developed or using white-label solution?
The Platform is a completely independent product. All IT solutions, as well as all legal and financial solutions have developed independently. At the initial stage, professionals with solid experience were involved, for example, the programmers were managed by an IT developer who had experience working for such companies like Ericsson and Groupon. He has also formed a team of programmers, who now support and develop our product.
How reliable is the credit rating / credit history data available?
All deals pass both our internal compliance and external scoring, which is provided by a specialized company.
How is the company financed?
The creation of the Platform and its maintenance at the moment is carried out at the expense of its owners.
The owners of the Platform are experienced businessmen in development and investment and have sufficient financial resources.
Are you open to international investors?
Do you mean if the investor is not an EU resident? If an investor has an account with a bank in the EU, he has passed all AML procedures and we have no reason to consider him a risky client. However, we have a right to request additional information from him. In case the client still seems suspicious to us, we refuse him cooperation.
Is your platform regulated?
In Latvia and Estonia there is no uniform law regulating the activity of electronic marketplaces. But this does not mean that nobody supervises the activities of the Platforms. We are simply subject of totality of other statutory provisions, regulating investment and financial activities. Regulators are constantly monitoring whether the Platforms comply with the law. Grupeer, like all other Platforms, is in constant communication with the Regulators.
Where do you see your platform in 5 years?
It is difficult for me to answer this question. The market of fintech is developing tremendously – new legal mechanisms are emerging, new technical tools appear, and the legislation does not fall behind, regularly surprising us with new changes. But in any case, we see the Platform as a multifunctional electronic marketplace for investments where the consumer can choose the product of interest and be sure that it is reliable and profitable. It is also possible we will start providing technical platform services or White Label services for other marketplaces that are not likely to invest big money in IT software or search of legal solutions.
– What are your thoughts about:
* Provision funds (Mandatory or not; will it be gone in few years?)
State Regulators periodically speak about the necessity to create provision funds and mandatory participation of the Platforms in each investment. It clearly shows rather banks’ lobby than concerns for investors. The platforms started to become a too strong competitor to bank investment tools. In case additional administrative and financial burden shall be imposed on Platforms, the profitability of the business will decrease: good borrowers are not ready for too expensive money and, to comply with all legal requirements, the Platforms will be forced to shift all extra costs to investors. That is, the rates offered to them decrease. And the stricter the requirements for Platforms will be, the lower rates will be offered. Platform is an intermediary that places offers, administers payment and maintains accounting. The decision is made by the investor. Platform does not participate in decision-making process for the consumer. Therefore, from the part of the Regulators it is absolutely logic to apply Platform licensing measures, to require appropriate qualification from the Platform staff, to express requirements for the security of data storage, possibly even requirements to IT software, but the Platform should not be forced to become a participant in the transaction or to freeze money in provision funds. Is the state ready to include investments via the Platforms in state deposit guarantee fund program? Should it be ready, all Platforms will happily make contributions. But it is obvious that the state is not ready for this.
– What are your thoughts about:
* BuyBack guarantees (Mandatory or not; will it be gone in few years?)
All investments in the purchase of debtor indebtedness on Grupeer Platform have BuyBack. This is our principle position. The investor did not assess the borrower and he should not bear the risks associated with his insolvency. For our new products, which I mentioned at the beginning, the principle of protecting the interests of investors will also be observed. For example, in bridge loans, the recipient of money will give a mortgage or commercial pledge in favor of a lawyer bureau with which we have a contract and which represents the interests of investors, or in favor of a special processing company.
How do you see competition in Latvia (or other markets you operate in):
* New competitors or consolidations
* Working locally or internationally
The market of Crowdfunding, Crowdinvesting and 2P2 mechanisms will develop. There will be more and more platforms. The consumers of this market will be not only people engaged in investment, but also ordinary people who understand that Platforms are a modern alternative to bank deposits. So, there will be enough consumers for everyone. Therefore, we are happy about the successes of other Platforms, because, as a matter of fact, we all do a common thing – we are promoting fintech. By the way, as you may have noticed, all Platforms behave quite intelligently in relation to each other. In future, we will see if not consolidation of the Platforms, then at least cooperation between them.
Trends of features (e.g. secondary market, automated investment, etc.) that should be very significant
- Changes in the legislation of European countries. Licensing of Platforms. Change in the accompanying laws. From our communication with the Regulators, it can be seen that many statutory provisions were been developed at the time when nobody was thinking about Crowdfunding and P2P, and now the legislation lags behind the realities of the market.
- Expansion of European Platforms outside the European market, at least in terms of the products offered for investment.
- The appearance of aggregating sites offering the possibility of comparative analysis of current offers of the Platforms.
- Integration of electronic money and cryptocurrencies into the activities of the Platforms.
- Entry of banks into this market, through the acquisition of existing Platforms by banks or through the creation of platforms, affiliated with banks.