Like it or not, 2020 is being a year of change in many areas: with an increase in turbulence and uncertainty, some businesses thrive while others struggle… Regarding crowd-investments, for example, we are definitely witnessing an increased interest in platforms with asset-backed investments… Not long ago, as investors, we only had very few choices available in this particular type of crowdfunding, but luckily nowadays we have several great options to explore and expand our portfolio.
One of the most interesting and fastest-growing asset-backed investment platform I have joined this year is definitely Profitus, a regulated platform supervised by the Bank of Lithuania that offers a nice variety of projects to invest in, all backed by real estate first rank mortgage and with an attractive net return.
Today we have with us Viktorija Vanagė, its co-founder and CEO… Welcome to TodoCrowdlending.com!
1 – First of all, Viktorija, for those readers that are still not familiar with your platform… can you please briefly explain what Profitus is and what your value proposition is for investors?
Profitus is a crowdfunding and investment platform, an intermediary between investors, who are looking to employ their free money and those who want to receive funding for business ideas and real estate projects.
- First of all, all investment projects are secured with first-rank mortgage. Since all projects are secured by real estate pledge, a complete loss of investment is a virtually impossible situation. The loan provided on our platform may not exceed 70% of the value of the mortgaged property. Currently the average LTV (LTV stands for loan-to-value ratio) of funded projects is 51%. The lower the percentage, the better, as it means more real estate is pledged to investors. However, it should be borne in mind that the mortgaged property is a primary mortgage.
- Secondly, investing through the platform generates high returns for investors. If we compare the return with the rental income, you also need a lot of capital, real estate knowledge and time. Investing through a platform takes only few minutes and you can start with small amounts of money, so the minimum investment is only EUR 100.
- Also, when investing with Profitus, you don’t need a lot of know-how in real estate. All projects on our platform are carefully reviewed. Risk is calculated and assessed by team members with years of experience in real estate and finance.
- In Lithuania, the crowdfunding market is strictly regulated, it is one of the strictest in Europe. So Profitus platform is regulated and supervised by the Bank of Lithuania. This is probably the reason why investors boldly invest in announced projects, and as many as 76% of investors come back and invest again.
- It is important to mention that there are no platform fees for the investors. And you can invest from major foreign banks using Trustly payment partner.
To sum up, our main goal is to make investment available to everyone. Even those who don’t know a lot about investing. Investments start at 100 euros and the platform is open 24/7. Investments are secured by pledging real estate as primary mortgage. So, it’s safe investment.
2 – According to our numbers you are definitely one of the fastest growing platforms nowadays, being one of the top companies we track in terms of relative growth in volume invested last month, and with an amazing performance this year, even taking into account the drop caused by the virus… How has Covid-19 affected your operations? And what do you think are the main reasons behind this outstanding recovery showed in these last months?
The real estate market has come to a halt during the quarantine: developers reconsidered planned projects and investors became more cautious.
However, there were many of those who had planned new projects before quarantine and decided to continue with them. Nevertheless, during the period of global uncertainty, banks began to view the real estate business as a high-risk sector and became even more cautious about lending to them. This has become a real challenge for real estate developers. As a result, some developers began to look for alternative sources of borrowing necessary to continue operations.
Our experience during quarantine shows that it was not the case: projects were funded quickly, and, additionally to consider, are our short processing times, compared to other lenders, we became an excellent alternative. All our rates increased during the quarantine. in April alone, we funded a record number of projects, page traffic rose by 27%, and the number of transactions doubled, On the other hand, people had more free time and spent more of it online, so they were more likely to find an opportunity to invest in our platform. During first half a year, PROFITUS investor community has grown as much as it has increased throughout the whole of last year. In an uncertain situation, this is a particularly good assessment of our platform, showing investor confidence in our platform, which we have grown over the past two years.
3 – In total, you have already crowdfunded more than 120 projects since beginning of operations… what is your track record so far in terms of completed projects, delays, return for investors, etc.?
As we speak, we just financed two more projects, 122 in total. And this number is changing every day. Our investors community raised almost EUR 17 M. 57 of projects have been successfully closed, and our investors earned EUR 723 890. There is 1 loan in our portfolio that is late, 70% of the investment has already been repaid. Moreover, liquid real estate is still mortgaged for investors, so sales revenue should cover the remaining debt.
We are glad that 76% of our investors trust us: come back and invest more.
4 – Being already a regulated company (supervised by the Bank of Lithuania) is without doubt a very strong selling point for any crowd-investor nowadays… What changes do you expect with the upcoming crowdfunding regulation at a European level, both for Profitus and for the crowdfunding industry as a whole?
For us, the new European regulation opens the door to new markets. It will be easier to finance projects and attract foreign investors. In Lithuania, regulation is very strict, so by acting here, we will not have any difficulty in adapting to the conditions of regulation at the European level. We see this regulation as an opportunity and we already make plans to expand to new markets.
5 – Increasing the scope, what are your main goals for 2021, any updates / improvements / new products planned for next year?
Everything listed! We are actually working on a second version of the platform that will be even more user-friendly and will optimize a large part of our internal processes. We are currently developing two new products that should complement the market with higher return projects.
The other thing we are working on – secondary market for early exit. And with new regulation we should be able to launch auto-investment functionality.
6 – Anything else you would like to comment or share with the community of TodoCrowdlending.com?
As a team, we strive for the highest results and we are happy to have such a high level of trust and loyalty from the investor community. Specially for foreign investors we have a new authentication option – Ondato and you can invest with Trustly system using the bank of your choice. There is also referral programme that allows you to earn even more – +1 % of interests to the first investment. Our platform is safe choice, because of our low tolerance for risk – our average LTV ratio is 51% and only first rank mortgage. We invite you to join our community and try to invest – and I hope you will have the best experience with us.