Crowdestor is a small crowdfunding platform from Riga, that helps to fund business projects from different sectors. This peer-to-peer (P2P) lending platform is gaining popularity, mainly due to high annual returns of up to 18%. Higher returns, however, always come with higher risks.
Find out more about this crowdfunding platform, and whether it’s something you’d be interested in investing on, in our Crowdestor review below.
Crowdestor in Numbers
It’s always good practice to look at a platform's previous performance before signing up and investing money. If you can’t find a platform’s basic statistics, you should almost certainly treat this as a red flag.
When searching for initial information about Crowdestor, we found the following basic stats on the platform's homepage:
|Investor's earnings:||+ €10 M|
|Total loan value:||-|
|Amount of investors:||+ 7,600|
|Loss of investors' money:||-|
|Average portfolio size:||-|
|Latest financial report||-|
Unlike Mintos, a P2P platform that is happy to share advanced statistics, Crowdestor isn’t the best when it comes to providing investors with detailed information.
The number of investors using Crowdestor is growing, and that’s without the heavy advertisement competitor platforms like Bondorause. This is generally a good sign, as it means investors found Crowdestor through word of mouth rather than paid promotion.
Some of the crowdfunding platforms, Crowdestor included, offer special promo codes that reward new investors with a cashback bonus.
New investors that register and invest through our link will receive a 1% Crowdestor bonus from their average portfolio size after using the platform for 90 days. This is of value, particularly for investors who plan to invest large sums of money.
Check out this example to give you a better idea of the Crowdestor bonus:
You invest €50,000 within the first three months and you will receive €500 bonus that will be added to your investor’s account.
In order to obtain the bonus, you don’t need a promo code per se. Just sign up with our link and the promo code will automatically be connected to your investor’s profile. The sign-up process is very simple and it only takes a few minutes.
Crowdestor’s New User Requirements
Much like most P2P lending platforms, Crowdestor requires its investors are over 18 years old and transfer funds from their European bank accounts. Note that you need to reside within Europe to be eligible to invest. This means that investors from the US and Canada are not eligible to invest on Crowdestor.
If you are looking into a digital bank account with fast and free SEPA transfers, the N26 account might be a good option for you. It takes a maximum of two days to deposit money on your investor’s account.
Risk and Returns Involved with Crowdestor
When reviewing the risk of an investment on a specific P2P lending platform, you first need to look at the securities that come with the investment.
You can find some information about the securities of a specific investment in the project description. From an investor’s perspective, the information Crowdestor provides regarding the security of your investment is less than sufficient.
Here’s a breakdown of the safety that comes with Crowdestor investments:
- Guarantee by borrower
- Intellectual property and copyrights of an online game developed by the borrower
- Commercial pledge on assets and agreements
- Buyback fund
In most cases, there isn’t much additional information about the security of your investments, which could easily lead to confusion regarding the actual securities that come with P2P lending on Crowdestor.
And the confusion doesn’t stop there! The project descriptions don’t seem to follow a particular structure or format like those on other P2P lending platforms like EstateGuru.
Instead, Crowdestor uses a buyback fund which is an account where Crowdestor devotes 1-2% commission from each project. In the case of a defaulted loan, the buyback fund would be able to cover some of the loss. The fund is currently valued at over €200,000.
If multiple borrowers fail to repay their loans, the buyback fund wouldn’t sufficiently cover the loss, given that most loans on Crowdestor are much higher than €200,000.
Is Crowdestor Safe?
The risk on Crowdestor might be slightly higher than that on platforms that offer a buyback guarantee, like EstateGuru. It’s worth noting, however, that the returns are higher as well. In fact, we earn 16.65% per year, which is more than you will get on most other P2P platforms.
We started investing on Crowdestor in early 2019 and we haven’t lost any money yet. Although it’s risky to assume that past performance will predict future results.
Crowdestor is very user-friendly. Regardless if you’re a beginner or advanced P2P investor, the platform is very intuitive and easy to use. What we also like is the dashboard overview, where you can track your portfolio performance. Crowdestor manages to show you all the information you need.
Currently, Crowdestor investors still need to invest manually when diversifying their portfolio as the Auto Invest feature is still in development. This is something that should be changed soon, and when it is, we’ll be sure to update this Crowdestor review.
We’ve had no issues when it comes to adding and withdrawing funds, with the deposit of funds taking no longer than two days.
Although there is certainly room for improvement, for most investors the current features will suffice.
Liquidity is becoming an important factor for P2P investors,particularly when there is uncertainty in the financial markets.
If you want to be able to access your money fast, Crowdestor isn’t the right platform for you. Crowdestor doesn’t offer a secondary market, which means investors aren’t able to withdraw money before the end of the investment period, assuming the borrower pays back on time.
To be fair, there aren’t many platforms that offer investors a better ratio of returns and liquidity. Most of the competitors with similar interest rates don’t offer a secondary market and, if they do, investors need to pay a fee to withdraw their funds early.
If you want to be able to access your money fast, we suggest you invest on Mintos and use the Invest and Access feature or diversify your portfolio on PeerBerry. Both platforms list short-term loans with a buyback guarantee.
Crowdestor’s Customer Support
Crowdestor’s priority is product development rather than support, so don’t expect quick response time and dedicated customer support.
Crowdestor is a very small platform whose limited resources are made evident as soon as investors try their customer support. We certainly hope that this will improve in the future, as it should be a priority to make sure that the investors’ questions are answered promptly.
Crowdestor Review Summary
So, should you invest on Crowdestor?
Let’s give you a brief overview of our Crowdestor review so that you can decide for yourself...
Crowdestor is suitable for you if you are looking for a secondary P2P platform that will help you diversify your portfolio.
High Returns (...And Risks)
The crowdlending platform is aimed towards investors who seek higher returns but are aware of the risks. Crowdestor lists projects from a variety of industries and countries. Risk assessment is generally a very complex matter. Being able to evaluate the risk of a project within Europe is one thing, doing due diligence for projects in Cambodia is a whole different challenge and you should be aware of this before investing on Crowdestor.
There is certainly room for improvement and we hope that Crowdestor will work on improving the transparency of their platform as well as the project description. Even company details such as the location of their headquarters in Riga rather than Tallinn will help increase the trust in the company.
Despite the fact that Crowdestor has areas within which it can greatly improve, it can be a good alternative to Mintos or Bondora, if you are looking to diversify your platform risk and increase your returns.
Ready to lend with Crowdestor?Start investing now and get a 1% bonus from your average portfolio size within the first 90 days.
How is my investment secured on Crowdestor?
Each of your investments on Crowdestor offer different protection. Most of the projects are partially covered by the buyback fund, while other securities might be borrower’s guarantees or business collateral. We recommend investors become familiar with the securities before investing on Crowdestor.
Is Crowdestor good for diversification?
Crowdestor is good if you’re looking for a secondary platform on which you want to lower the platform risk. The platform is not, however, the best when it comes to diversification as there aren’t as many investment opportunities and investors can often experience cash drag.
What’s the minimum investment amount on Crowdestor?
The minimum investment on Crowdestor is €50 per project. You need to invest much more money than on other P2P lending platforms to achieve a good diversification rate.
Is there a buyback guarantee on Crowdestor?
Unlike Mintos or PeerBerry, Crowdestor does not offer a no buyback guarantee .There is, however, a buyback guarantee fund, which helps to cover potential losses.
|Address:||Roosikrantsi 2, Tallinn, Estonia|
|Phone:||+371 2733 3274|
|Opening Hours:||Weekdays from 9AM to 7PM|
|Social Media:||Facebook, Instagram|