Estateguru, an online investment platform matching SMEs in need of capital with individual investors, will lunch a fund targeting institutional investors in a move that should significantly scale the firm’s operations.
Importantly, the European Investment Fund (EIF) has committed to be an anchor investor in the fund using resources from the European Guarantee Fund created to ensure that European SMEs have sufficient financing available to mitigate the economic impact of the COVID-19 crisis.
The Estateguru Senior Secured Credit Fund will provide funding for European SMEs via the online lending platform. The Fund is said to mainly focus on SMEs in Estonia, Latvia, Lithuania, Finland, and Germany. The fund is a closed-ended (7+1 year) private debt fund available for qualified investors. The first close is expected to take place at the end of Q2 in 2022.
Judith Tan, Head of Capital Markets at Estateguru, said the Fund will be an attractive opportunity for institutional money:
“It will give them access to the underserved European SME property-lending market estimated at €400 billion. Digital lending platforms like Estateguru are able to serve this market more effectively than traditional lenders and gain market share rapidly, while also offering a good return for senior secured risk to investors.”
Alain Godard, EIF Chief Executive, said they are delighted to support Estateguru, a fast-growing marketplace lender that aims to provide quick and flexible financing to SMEs.
“The small size of target companies means that the loan amounts are small too, so SMEs have limited appeal for traditional banks and are in need of alternative sources of finance. Supporting them is key to overcoming the ongoing crisis caused by the pandemic.”
Based in Tallinn and founded in 2014, Estateguru is a standout Fintech success of the Baltic region. Its approach to securities crowdfunding debt, with property-backed loans, has successfully provided access to capital while generating solid returns for individual investors.
Estateguru was launched in 2014 as a platform facilitating property-backed loans for SMEs on a large scale. To date, more than 3 300 loans have been originated by the platform for a total amount of €530 million. Over the years, Estateguru has scaled its operations around Europe – most recently opening an office in the UK. Estateguru has also utilized online capital formation to raise capital for its own operations.
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