“Our vision is to build a state-of-the-art ecosystem based on technology that traditional financial institutions will want to use in the near future to remain competitive,” said the founder of EstateGuru Marek Pärtel when describing their plans.
Today, 90% of EstateGuru’s main processes are automated and digitised. The objective is to get that number to 100% in the forthcoming years. “We are currently working on automating credit risk decisions,” Pärtel said. “We are also establishing an innovation department which will start testing a number of new ideas. In Q1 2022, we will begin operating in the UK as well as the Netherlands; in the second half of 2022 we will likely open in France and Italy as well.”
The company is seizing market share through rapid expansion and technological development
EstateGuru’s expansion into Europe is emboldened by the fact that the market for digital real estate financing platforms is in an upward trend in Europe. “Thus, the potential market share of EstateGuru and other alternative lenders is increasing,” Pärtel clarified.
EstateGuru, a platform which connects real estate developers who need loans to investors, believes their loan quality is their competitive advantage. “In the Baltic States we use the Creditinfo database to assess the credit risk of borrowers and for other countries we use Creditsafe, which we are also currently integrating into our own system using an API,” said Pärtel. “We are making considerable progress towards full automation and the full application of machine learning – in risk assessment as well as in the selection of properties to finance.”
Pärtel added that Lemonway, an international payment platform, has been added to the EstateGuru platform, and the domestic LHV Bank has added the investment information provided by them to their own online bank’s aggregated view. “This is the first interface of its kind that we know of in Europe,” Pärtel confirmed.
A growing revenue base
The EstateGuru platform has gotten its revenue from borrowers since its inception in 2013. Pärtel confirmed that around 3% of the loan amount goes to EstateGuru. “This will certainly change as the company is making large investments,” he noted.
Pärtel mentioned that the EstateGuru platform also houses the AutoInvest app, which enables the possibility of automatic investment. “We will launch Auto Invest 3.0 next year, which will allow investors and EstateGuru to generate income,” said Pärtel while describing new income streams. “Additionally, our focus remains on institutional investors, who are diversifying our revenue streams too. We will be launching several products for them next year.”
Small and medium-sized companies and real estate developers are the main parties borrowing from EstateGuru. “We are seeing more and more that large companies are using our service and we also have over 100,000 investors across the globe.” Pärtel added that their largest investor community is from Germany with around 25,000 members. “Every year have more than doubled in size, our goal is to grow three-fold and finance five billion euros per year by 2025.”
Supported by Enterprise Estonia
EstateGuru collaborates with Enterprise Estonia to attract investments. “Enterprise Estonia opens up opportunities and does the lobbying work for the broader Estonian business landscape,” Pärtel explained. He mentioned that Enterprise Estonia has supported them taking part in trade fairs. “For two years now, we have taken part in the Money 20/20 trade show with other Estonian companies, which is definitely one of the highlights of the year. We also get help from Enterprise Estonia’s and Invest Estonia’s representatives in countries we are planning to enter, like the Netherlands and the UK.”
Andres Labi, Invest Estonia’s (a part of Enterprise Estonia) Director of Business Development in Central and Eastern Europe, said that his objective is to constantly remind investors of Estonia’s core advantages. “In cooperation with Startup Estonia, we gather information from startups at our events regarding how much capital they want to raise and then divulge that information with our VC network,” he explained.
Labi says that the process of attracting investments can take more than six months from the initial contact. “We constantly communicate with investors and provide them with information,” Labi said.
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