Secured with collateral
Invest from €50
Table of Content
Crowdestor is a growing P2P lending platform based in Latvia. The platform is listing a business project with an interest from 12% – 19% per year. Crowdestor gives investors a good opportunity to invest in a business without taking too much risk.
You are eligible to sign up on Crowdestor if you reside in Europe and are over 18 years old. You also have to have a European bank account in your name if you want to transfer funds to Crowdestor. I use my N26 bank account and the transaction takes max. 2 days.
Is investing on Crowdestor safe?</h3
Crowdestor is listing business loans, which are most of the time secured by the borrower’s personal guarantee as well as some commercial pledge. The securities always depend on the loan type. It’s not always the case that the loan is secured by some kind of real estate.
Most of the loans are protected by the buyback fund. Crowdestor is devoting 1-2% commission from every financed project to the buyback fund. By the end of 2019 the fund should be able to cover up to €100.000.
Most of the projects listed on Crowdestor are above €100.000, which means that the buyback fund wouldn’t be able to cover the whole project if it would default.
As you can see investing on Crowdestor isn’t risk-free and you should be aware of it. Higher interest always comes with higher risks.
When reviewing P2P platforms you should always have a look at the platform’s statistics. Statistics will give you an idea about the P2P platform’s performance as well as its growth.
|Investor’s earnings:||not available|
|Total loan value:||+ €19 M|
|Amount of investors:||+7.600|
If you are looking for more statistics about Crowdestor, you won’t find it. Unfortunately, their support team didn’t come back to me when I requested further information. If you try to find out more information about their financial situation in recent years, you won’t find much either.
The only information I found was about the number of employees and the initial capital in one of the Estonian registries. In fact, I tried to meet up with the team during my visit to Tallinn, when I visited EstateGuru.
To my disappointment, I found out that Crowdestor is actually based in Riga although on their website they list Tallinn as their base.
- High returns
- Interesting business projects
- User friendly platform
- Cashback bonus up to 1%
- Buyback fund can’t cover a possible loss
- Limited diversification options
- Not suitable for short-term investments
- Lack of transparency on Crowdestor’s website
- No Secondary Market and Auto Invest at the moment
At the time this Crowdestor review was created, there was no Auto Invest function available on Crowdestor. Up until now, you needed to invest manually. The latest rumors say, however, that Crowdestor is preparing an Auto Invest feature.
There isn’t currently an overview of Crowdestor’s diversification options, so I gathered some information based on my own investments.
Currently, you can use the following diversification options on Crowdestor:
Loan Period: 9 – 24 months
Min. Investment €50
Countries: Latvia, Russia, Georgia, Estonia, Cambodia
Loan Type: Gaming, Real Estate, Business, Forestry, Cash Flow, Energy
Surety: personal surety, buyback fund, business collateral
Buyback Guarantee: Yes (buyback fund)
Auto Invest: No
To be fair, it’s hard to generalize the diversification that Crowdestor is offering. Although you might have the option to invest in different countries, it’s not as common.
Most of the business projects on Crowdestor are from Latvia. The same applies to the type of loans on Crowdestor. There isn’t one type or sector of business that is primarily financed through the platform.
When comparing Crowdestor to other platforms, you can certainly tell that it does not offer the best diversification options.
Crowdestor Risk & Returns
Crowdestor collaborates with a variety of businesses from various sectors. To estimate the risk of your investment isn’t easy as you might not know the industry, in which the borrower is operating. Crowdestor makes efforts to describe each project and give you some background information you might be looking for.
When it comes to securities, I find it hard to evaluate whether they could actually cover the loss of a defaulted loan. Crowdestor isn’t really a platform that communicates with its investors. If you browse through their website it doesn’t have any proof whatsoever about how the platform operates.
You can certainly dive deep into the User Agreement but good luck with finding information about their risk assessment.
As for now, I haven’t lost any money on Crowdestor, but my portfolio is also quite small at the moment. I have diversified my funds across 10 different projects from a variety of industries. This helps to lower the risk but I would not feel comfortable putting €10.000 on the platform, at least not for now.
On the other hand, you can earn attractive interest up to 21%, which reflects a certain extent the risk.
When it comes to functionality, Crowdestor gives you a very basic interface with all the most important information that you need. You won’t find advanced investment strategies, which in the case of Crowdestor, would not be beneficial anyway.
Soon Crowdestor should introduce the Auto Invest which will be certainly a good way to lower the time investment you spend otherwise on investing in loans manually.
The buyback fund is a nice add on to the platform, but in case of a defaulted loan, you should not rely on it.
Overall I don’t think that for a platform that lists business loans, you would need any more functionality. The dashboard is easy to use and that’s what many investors will appreciate.
Crowdestor Support has a huge room for improvement. E-Mails won’t get answered or need to follow-up. Not mentioning that you need to wait several days for an answer. Other platforms that I am invested in such as Mintos and PeerBerry do a much better job.
To be fair, Crowdestor is a young and relatively small platform. The main goal is to improve the product and protect the investor’s money. However, I believe that improving the support of the platform is crucial to keep the investors happy.
My portfolio on Crowdestor
As mentioned before my portfolio on Crowdestor isn’t very big. Crowdestor isn’t my primary platform of choice, however, it helps me lower my platform risk. Additionally, it makes me a bit more than 16% of interest per year, which isn’t bad either.
Crowdestor Review Summary
Investing on Crowdestor makes sense if you are investing on various platforms and want to diversify your risk further. Personally, I would not put all my money in Crowdestor as there are a few red flags that should be improved first.
Especially the transparency of the information shared on Crowdestor’s website as well as the responsiveness of their support is certainly something that requires some attention.
Whether Crowdestor is the right platform for you comes down to your preferences as well as your investment strategy. If you are willing to take a higher risk in exchange for higher interest, go for it.
People who are just starting out should maybe invest on P2P platforms that allow them to withdraw their money faster than 12 months.
If you sign up on Crowdestor and invest you will receive a 1% bonus from your portfolio size within the first 90 days. Get the Crowdestor Promo Code, it only takes two minutes.