Crowdpear Review 2024
- Written by
- Just P2P
- •
- Updated October 1, 2024
Crowdpear was created by PeerBerry’s team to place their real estate crowdfunding activities within a business model that is better suited to them while at the same time bringing them into line with a now well-defined European regulatory framework.
The aim is to professionalize a long-established part of their core business by dedicating a platform that meets specific needs and is more in line with the business model of real estate crowdfunding, a fast-growing sector.
Let’s perform Crowdpear review together !
Table des matières
What is Crowdpear ?
The company (UAB) Crowdpear
“UAB Crowdpear” is a Lithuanian FinTech company specializing in real estate crowdfunding. Based in Vilnius and registered since July 2021 under the code 305888586, the company has a share capital of €130K.
Crowdpear’s development has been very rapid, thanks in particular to the recognized professionalism of its management team, already in charge of PeerBerry for several years.
The company also benefits from its status as a crowdfunding platform regulated by the Central Bank of Lithuania alongside other platforms.
Crowdpear’s founding
PeerBerry had financed real estate projects via its crowdlending platform for several years. Although limited to 15% of its portfolio, this part of its business had grown steadily.
With the introduction of European crowdfunding regulations in 2020, PeerBerry decided to isolate this part of its business within Crowdpear.
At the end of 2021, Crowdpear then submitted its license application to the Central Bank and obtained the status of European Crowdfunding Service Provider.
The shareholders
Crowdpear‘s shareholders are three Lithuanians with banking, FinTech, and crowdfunding backgrounds. They are Vytautas Stražnickas, majority shareholder, Vytautas Olšauskas, and Ivan Butov, also shareholders in PeerBerry.
Vytautas Stražnickas, majority shareholder (50%), holds a management position at one of Lithuania’s oldest printing plants, Garsu Pasaulis, where he has worked for over 25 years. Vytautas is also a member of the management team of the Aventus Group in Poland.
Vytautas Olšauskas, another shareholder with 25%, is a successful entrepreneur from the world of banking and FinTech. The European Central Bank licenses him to manage the banking business, and he is also the CEO of Crowdpear.
Ivan Butov, the third shareholder with 25%, is a quality inspector. Before this, he was General Manager in various companies and was a member of the Credit Committee of the Caisse Populaire. He is also one of PeerBerry’s shareholders.
Vytautas Olšauskas
Ivan Butov
The management team
Crowdpear’s CEO is none other than one of the shareholders, Vytautas Olšauskas. This is a strong positive signal since his decisions as a Director influence his assets as a partner.
Vytautas Olšauskas has extensive experience in the world of banking and crowdlending. In 2015, he founded Finhike, of which he is still a Director, and then Mano Bankas, of which he is Chairman. He also holds a 25% stake in PeerBerry.
At his side is, notably, Arūnas Lekavičius as Development Director. He is also known to investors as PeerBerry‘s Managing Director since 2019.
Arūnas has spent his entire career in financial services. First at S|E|B as Customer Manager, then at 4finance, where he was in charge of leasing.
Finally, Rita Simanavičiūtė is Marketing Manager at Crowdpear (and PeerBerry); Rita has also spent most of her career in the banking and financial sector (Swedbank, Citadele bankas).
Arūnas Lekavičius
Rita Simanavičiūtė
Crowdpear statistics for 2024
Here are some statistics for the current year:
- Total funds invested : €7.15 million
- Total amount paid out to investors : €163,8K
- Average annual return : 11.30%
- Number of investors : +6,000
- Average portfolio per investor : €2,059
The platform began operations in January 2023 and has since seen a significant increase in volumes financed :
Funds invested on Crowdpear are expected to exceed the million-euro mark rapidly. Today, Crowdpear is one of Europe’s fastest-growing real estate crowdfunding platforms.
Given the excellent reputation of the management team and the strong support of seasoned investors, the platform’s growth is still in its infancy.
Finally, in terms of returns, rates vary between 10% and 12%, depending on the project and the volume invested.
How does Crowdpear work ?
A crowdfunding platform
Crowdpear is a regulated crowdfunding platform that enables individuals (and companies) to finance real estate projects led by specialized operators in return for a predetermined financial return.
This gives real estate operators access to capital, enabling them to co-finance the construction of real estate assets. In return, guarantees are offered, including a first mortgage on the property and/or the land on which it is built.
This way, real estate companies can supplement their financing plans with other sources, including self-financing and bank loans.
Most construction projects occur in the Vilnius region of Lithuania, considered the FinTech center of the European Union. These are generally private homes located near the Lithuanian capital.
The platform’s teams meticulously audit each project to ensure the project’s soundness and the financing plan’s viability..
Investors (individuals or companies) lend these operators financial capital in exchange for an interest rate determined by the platform when the project is published. In this way, they grow their savings at higher yields than traditional assets.
Crowdpear earns a management fee for its intermediation work, which generally corresponds to a small percentage of the amount financed via the platform.
But there are no costs for investors: deposits and withdrawals are free, as is investment on the platform.
Crowdpear’s role
As a first step, Crowdpear commissions a property valuation report from an independent real estate expert. In particular, the platform often calls on In Real, but also to Centro Kubas or to Matininkai.
The platform then verifies the property’s value in relation to the market price, the solidity of the project developer, its track record in bond underwriting, its reputation, its cash flow, etc.
Particular attention is also paid to the ratio between the value of the property, which a first-ranking mortgage must back, and the amount financed (LTV), as well as to the location of the real estate project..
For each project, their team publishes a certain amount of information and documents :
- A detailed description of the project
- Warranty details
- A property valuation report
- A list of project risks
Crowdpear’s primary source of revenue is brokerage fees, which are charged to borrowers only when the project is successfully financed.
These intermediation fees charged to project sponsors can represent between 2% and 5% of the loan financed.
Other sources of income include administrative fees, penalties, or early termination fees for project sponsors. On the other hand, investment in Crowdpear is free for investors.
Chronology of an investment
On Crowdpear, the minimum amount to be invested in a loan is €100, far more affordable than many real estate crowdfunding platforms where the entry ticket is usually €1,000.
Returns offered to investors range from 10 to 11% annualized.
But getting even better rates is possible thanks to the platform’s loyalty program from 3 months onwards.
From as little as €10K invested, Crowdpear applies +0.5% on all our investments. This rate can go even higher: from €25K, the additional rate is +0.75% and +1% from €40K.
The minimum investment period is six months, but most projects last 12 months.
Investments are of the bullet type, meaning interest is paid at regular intervals (quarterly), while the capital is repaid at term.
Last but not least, interest is calculated when we decide to invest. So we don’t have to wait until the project is fully funded.
I’ve been investing for a few months, with just over €3,000 invested in 4 different projects.
These are houses in residential areas in the Vilnius region, in which I started investing at the end of May and will start to pay off at the end of August and the beginning of September.
Investing on Crowdpear
Who can invest on Crowdpear ?
People aged 18 and over residing within the European Union or the European Economic Area (EU, Switzerland, Norway, Iceland, Liechtenstein) can invest on Crowdpear.
As a crowdfunding platform based in Lithuania, Crowdpear is legally obliged to withhold tax – at a rate of 10% – from the interest generated.
As Lithuania has double taxation agreements with most European countries, investors can fill in the “DAS-1 form” and send it to the platform.
It is also possible to invest via a company located in the EU or European Economic Area (in which case, no tax is applied).
To date, investors on the platform are mainly located in the following countries (in order):
- 🇩🇪 Germany 14%
- 🇫🇷 France 12%
- 🇪🇸 Spain 11%
- 🇱🇹 Lithuania 8%
- 🇵🇹 Portugal 8%
- 🇳🇱 Netherlands 6%
- 🇧🇬 Bulgaria 6%
- 🇬🇷 Greece 4%
- 🇷🇴 Romania 4%
- 🇮🇹 Italy 3%
However, the interface is only available in English and Lithuanian. But French will undoubtedly be coming soon.
What to invest in on Crowdpear ?
The Crowdpear platform exclusively offers investments in Lithuanian real estate loans secured by a first mortgage.
Investments in Spanish real estate loans will likely be offered soon.
Although the platform advertises the possibility of investing in corporate loans, this has yet to be true. In my opinion, this is a positive point, as specialization is critical, especially in the particular real estate sector.
Registration process
Registering on the platform is simple and intuitive, taking just a few minutes to complete.
All you need is a piece of identification and your smartphone, then check that the room is sufficiently lit..
Once the account has been opened, it must comply with KYC (Know Your Client) and AML (Anti-Money Laundering) questions. After this, Crowdpear verifies our identity via smartphone and checks the location of our tax residence.
By registering on the platform, all investors receive a bonus of 0.5% during 3 months after registration on all their investments. Please note that this bonus can not exceed +1% in case you already benefit from PeerBerry loyalty program.
More info here 👇👇👇
In addition, if you’re already an investor on PeerBerry, you’ll automatically benefit from the bonus rate if you have one with them via their loyalty program.
How to invest ?
On Crowdpear, it is only possible to invest manually, as the platform does not yet offer an automated investment function.
We are notified of new projects listed on the platform by email and can then invest directly if they match our investment criteria (rate, duration, LTV, amount, etc.).
Is investing in Crowdpear risky ?
Knowing that PeerBerry offers attractive interest (as indicated by my rate of return below), let’s take a closer look at the risk incurred by the investor.
Regulated platform
The Crowdpear platform has been regulated and supervised by the Central Bank of Lithuania since it obtained the status of Crowdfunding platform operator.
Like other financial market players, the company is subject to regular monitoring and must meet several legal obligations.
As Crowdpear is only an intermediary, loan contracts are concluded between borrowers and investors. Should Crowdpear become insolvent, the borrowers would remain legally liable to the investors.
Secure investments
All loans offered are secured by first mortgages on the project property, land, or other assets the holder owns.
In addition, the platform limits the financing level to 80% (LTV) of the property’s appraised value based on the valuation report of a recognized real estate expert in the banking sector.
In the event of payment difficulties or default, which has never happened on Crowdpear, the sale of the mortgaged property would then protect the investors’ financial interests.
Funds segregation
Under regulatory requirements, Crowdpear strictly separates the funds held for investments made by its members from its corporate capital.
In this way, the management and monitoring of funds invested by investors are dissociated from the funds required for the platform’s proper operation.
By the way, Crowpear has no legal rights over these funds, which remain the investors’ property, since the platform merely administers them.
My opinion on Crowdpear
Here, I review the strengths and weaknesses of the real estate crowdfunding platform I invest in.
A team of experts
The management team is none other than PeerBerry, established in 2017, and has extensive experience in Crowdfunding. For this reason, Crowdpear has built up a solid professional foundation and has rapidly attracted experienced investors.
Specializing in the real estate sector, the platform enlists the services of real estate audit firms officially approved by the regulatory authority.
This point is critical to me, as it shows that Crowdpear operates collaboratively, focusing on its intermediation role while relying on real estate experts.
Good returns
The returns on investment offered are generally higher on Crowdpear than on crowdfunding platforms such as Raizers. On top of this, their loyalty program allows you to add up to +1% in returns.
These rates are all the more attractive in the current market context, where crowdfunding is becoming more democratic and attracting more and more investors..
These returns are highly competitive concerning the risk profile of project owners, which has been carefully studied and controlled. Hence the excellent performance of the projects offered on the platform, with zero default.
Good level of liquidity
Compared with most real estate crowdfunding platforms, Crowdpear offers a very high level of liquidity, thanks on the one hand, to the duration of the investments on offer and, on the other, to the presence of its secondary market.
As mentioned above, the duration of investments varies between 6 and 12 months, which is shorter than on competing platforms (between 12 and 18 months).
Moreover, the platform offers a secondary market where investors can resell their investments before maturity. The offer is issued for 14 days, with the possibility of a discount of up to 25%.
However, a 2% commission is charged to the seller, thus limiting market liquidity (no commission is set to the buyer).
Fairly few projects
While the team has many years of experience, the platform is still young and offers limited real estate projects, which can hinder those keen to diversify.
As far as I’m concerned, this isn’t a problem because even if there are few projects to choose from, there are always some available to invest our capital in, so we don’t have any cash-drag.
I prefer to be in this situation and be able to invest without any problem rather than trying to diversify at all costs by investing just a few dozen euros in each project (I generally invest €1,000 per project).
A single-country offering
This is something regularly pointed out by investors, who would like to see a more diversified offering, particularly with projects outside Lithuania.
As the platform is set to expand, this is obviously a strategic focus for the management team, particularly in Spain, via a subsidiary of the Aventus group.
But for now, I see a desire to focus on the Lithuanian market, as Crowdpear’s teams have access to all the necessary data.
They can also meet project promoters regularly, visit the site and check on the progress of the project being financed.
Bullet loans investments
Crowdpear offers bullet loans, which means that our capital is repaid at the end of the loan, while interest is paid quarterly into our account.
For investors like me who are used to crowdlending’s passive monthly income, it’s frustrating only to receive income every quarter.
But compared with other platforms that only pay annual interest, we’re lucky to be able to adapt to the specific rhythm of real estate crowdfunding.
In addition, they can meet the project promoters regularly, visit the site and check on the progress of the financed project.
Crowdpear: my opinion in 2024
Although relatively young, Crowdpear offers professional investment conditions: a regulated environment, competitive returns, and an experienced team backed by internationally recognized real estate groups. What remains to be done is to diversify the projects on offer, but to date, unlike other platforms, we have yet to see any cash-drag.
Clearly, we still need to gain hindsight to assess the performance of the investments on offer properly. Still, the platform has excellent potential to reach the same level as industry leaders such as EstateGuru.
I see Crowdpear as an excellent alternative within my investment portfolio, particularly in the context of persistent cash-drag on crowdlending platforms.
I’m keeping my capital invested for the medium term while diversifying into the real estate sector.
Thank you for reading this analysis.
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