Indemo Review 2024

Written by
Just P2P
•
Updated October 1, 2024

The platform Indemo is a Latvian peer-to-business (P2B) lending investment company specialized in mortgage-based assets. Investors can invest in Spanish real estate through discounted debts and mortgage loans listed under the supervision of the Central Bank of Spain.

The first of their kind in Europe, they have the objective to democratize access to alternative and property-backed investments, enabling investors to profit from segments previously reserved for wealthy and institutional investors.

Let’s perform their review.

disclaimer

What is Indemo ?

Indemo is a peer-to-business lending platform operating from Latvia that connects investors with lending companies and financial institutions. Starting from €10, investors have the possibility to invest in mortgage loans (mainly for secondary residences) and discounted debts, also known as non-performing loans, backed by real estate assets as collateral.

Company “Indemo SIA”

As a company, “Indemo SIA” launched its activity in May 2022 in Riga, Latvia under the unified registration number 40203401432. The base capital of the company is €330K, in line with the amounts observed in the P2B industry.

The platform is supervised by the Central Bank of Latvia, the prudential control and resolution authority (Central Bank of France), the Federal Financial Supervisory Authority (BaFin in Germany) and the National Securities Market Commission (CNMV in Spain).

Their history

Indemo was founded in 2022 by Sergejs Viskovskis, Daniel Zhiryakov, Alexander Voloshin and Pavel Poctarenko, four Latvian entrepreneurs who have between 8 and 22 years of experience at Rietumu Banka where they all worked together before.

In 2021, they left their comfortable jobs in banking to embark on an entrepreneurial FinTech adventure with the idea of democratizing investment (InDemo = Investment Democracy).

The idea was to use their experience in the banking sector to facilitate access for European investors to alternative and property-backed investments, helping them to benefit from financial products ordinarily reserved for investment funds and insurance companies.

Management Team

The management board is composed of the four founders of the platform, who bring their expertise in investment banks and asset management companies, as well as lending and debt servicing businesses.

Sergejs Viskovskis, Chief Executive Officer and former Head of Financial Markets in the Legal Division of Rietumu Banka, studied International and EU Law at Stradiņš University in Riga. He also worked for several years at Mintos as Senior Legal Counsel.

Daniel Zhiryakov, Chief Technical Officer, was Head of the Securities and Financial Markets Department at Rietumu Banka, where he spent more than 22 years of his career. He was also a Partner at KBL Solutions for 5 years and is a Council Member of Aquarium Investments.

Sergejs Viskovskis

Daniel Zhiryakov

Alexander Voloshin, Chief Financial Officer, was previously Senior Vice President of Rietumu Banka, where he worked for over 14 years after obtaining a master’s degree in Business Administration. He also participated in the creation of KBL Solutions with other members of the Management Board.

Pavel Poctarenko, Chief Risk Officer, was previously Head of Asset Management at Rietumu Banka, where he worked for over 8 years. He is a graduate of the University of Latvia Faculty of Business, Management and Economics and is an ACAMS-certified Anti-Money Laundering Specialist.

Alexander Voloshin

Pavel Poctarenko

Indemo statistics in 2024

Here are some statistics for the current year:

Total funds invested : €1.63M
Total interests paid to investors : €36,000
Average annual return : 22% – 118%*
Number of investors : 650+
Average portfolio per investor : €2,500

* based on their first discounted debt repayment

Indemo began operations in July 2023 and ended the year with €850K funded via its platform, with a peak of €346K reached in December, which remains its highest level to date.

The year 2024 has got off to a good start, with €703K already financed in the first quarter, almost as much as in the first six months of activity, bringing the total amount funded to €1.63M.

How does Indemo work ?

Indemo is a licensed and regulated investment platform that offers investment in non-performing mortgage loans acquired by debt-collector companies or mortgage loans granted by lending companies. The platform offers individual and corporate investors the opportunity to invest in these loan-based assets aggregated into “Notes” in return for repayment with annual interests.

Indemo is a P2B platform

Indemo is a peer-to-business (P2B) lending platform that facilitates loan-based investments. The platform connects investors with debt-collector and lending companies looking for funds to develop their activities.

On one side, we have investors (individuals or companies) ready to invest some of their funds in financial opportunities. To do so, they lend money to loan originators listed on the platform and receive interests as payment.

On the other side, lending companies acquire non-performing mortgages loans from banks or provide private mortgage loans to individuals (B2C) or companies (B2B). To develop and reinforce their activities, those loan originators offer the opportunity to invest on their side.

With additional funds, loan originators acquire more non-performing mortgage loans (also called discounted debt investments) and negotiate higher discounts from the banks where they purchase them. They also can extend their portfolio of borrowers for their mortgage loans.

In both cases, loan originators use the additional funding raised to increase their leverage and generate additional profits without engaging more funds.

These financial products are backed with bank mortgages as collateral. For discounted debt investments, investors are entitled to proceeds from the sale of the property while, for mortgage loans (generally secondary residences), collateral is used if borrowers stop payments.

The role of Indemo is to be the intermediary between the lending companies and the investors so that they can invest together in discounted debt investments (non-performing loans) or in mortgage loans, depending on the opportunities that arise.

In return, Indemo receives a commission, the terms of which depend on the type of loan-backed assets in which the investment is made.

In the case of discounted debt investments (DDIs), once the real estate assets have been sold, the lending company and the investors share the profit (50% each) minus the platform’s commission. In the case of mortgage loans, as an intermediary, Indemo receives part of the interest generated.

Lending companies

Indemo works with the lending company Tamarindo Vector S.l., which is a non-bank operator specialized in Spanish private mortgage loans based in Barcelona. The company originates mortgage loans and purchases debts on the market under the supervision of the Bank of Spain as a real estate lender (ID number B67360305).

Their activities are supervised and controlled in accordance with Act 5/2019, of 15 March, regulating real estate credit agreements (transposition of Directive 2014/17/EU).

Tamarindo Vector provides financing for debt consolidation, renovation works, self-employed loans, business loans, inheritance estate loans, loans for foreclosures and auctions, and private capital loans.

They work in partnership with the mortgage intermediary Atlan Advance Management, which provides services to lending companies, in particular due diligence, risk assessment, debt collection, court legal recovery under supervision of the Bank of Spain (ID B67196808).

Chronology of our investments

Mortgage loan investments

This is a classic crowdlending investment, which consists of lending capital to finance a property transaction, either to individuals or to companies, at an average rate of 10.1% for a period of a few years. According to Sergejs Viskovskis, CEO, « mortgage loan investments will be listed at the end of Q2 or early Q3 2024 ».

The borrowers reimburse their loan to investors according to a predefined amortization method, generally via monthly instalments.

This investment will last a minimum of 2 years, during which time the borrower will repay to the investors part of the principal each month and also pay the interest stipulated in the contract signed by the two parties.

Discounted debt investments

Unlike mortgage loans, the duration of the investment is an estimation (generally set at 2 years), as the legal process must be completed before the property can be resold and a profit made.

This is therefore a “bullet” type investment in which the entire capital invested, together with interest, is paid out in a single payment after the sale.

After the legal process shown in the dashboard below has been completed, the property is resold with a profit. The estimated return on this type of investment is 15.10%, but this rate may vary on a case-by-case basis.

Investing on Indemo

Who can invest ?

To invest on Indemo, individuals need to be at least 18 years old and hold either EU citizenship or an EU residence. Their bank or payment service provider must be located in the European Union or in the European Economic Area.

The main bank account through which funds are sent to Indemo is located in Estonia (but the platform also has a back-up bank account in Latvia).

For investors who wish to use an international and effective bank, an interesting option is Wise, which supports instant SEPA payments. Wise also provides a free credit card to be used anywhere in the world.

Investors can also register for an account on behalf of a business, pending security checks. The person who opens the account simply needs to have the right to do financial operations in the name of this company.

It is always interesting to know where the actual investors of an investment platform are located. And although it may change in the future, here is their distribution today :

🇩🇪 Germany 35%
🇱🇻 Latvia 30%
🇪🇸 Spain 15%
🇨🇿 Czech Republic 5%
🇪🇪 Estonia 5%

This ranking seems to reflect the languages in which Indemo’s interface is available : German, Spanish, French, and Latvian.

What do we invest in ?

Mortgage Loans are classic investments where investors invest alongside professional lending companies that issue loans to individual borrowers to buy real estate properties. This is a typical bank-type loan backed with collateral, where investors receive stable and periodic returns.

Discounted debts are investments created out of mortgage loans in which borrowers have failed to reimburse the bank. The banks sell these loans on the market at a significantly discounted price, including the real estate asset attached. Then the asset is sold for its market value to generate a profit.

As the platform is regulated, investors do not invest directly in these loans and debts, but in a financial instrument called “Notes” thanks to a special purpose entity, Indemo SPV Issuer No1 SIA. Their role is to pool together the loans or debts, usually eight with similar properties, into a Stack of Notes and to place them on the platform.

The value of mortgaged properties is assessed by independent appraisers, such as Tinsa or Idealista, depending on the market conditions at the time of the valuation.

Each Stack of Notes has a unique International Securities Identification Number (ISIN) and a nominal value. By investing in a Stack of Notes, investors gain diversification across all underlying loans or debts in the pool. They receive payments from the Notes whenever the borrower or debtor makes payments.

Where do we invest ?

Indemo collaborates with a professional debt market expert in Spain, where we observe an increase in foreign investment (UK, Germany, France) and a growing demand for rental properties. Therefore, both types of investments listed on the platform are made in the Spanish real estate market.

With the system of Notes, investors diversify automatically as they invest in eight different real estate assets located in various cities in Spain.

Investors can visualize directly on a map where the real estate assets they invest in are located in Spain. The location of these loans is quite diversified as investors may fund some in Madrid, Barcelona, Valencia, Almeria and even Palma de Mallorca (the famous island).

Registration process

Registering on Indemo is a straightforward procedure during which investors need to go through the usual Know-Your-Client (KYC) verification. The only material required is an ID card (or a passport), a personal email and a smartphone.

Investors also need to be prepared to answer a series of questions about their financial situation and their knowledge in the investment sector. Therefore, it is important to understand clearly the two types of investments as explained above.

After that, investors can transfer the amount of money they wish to invest on the platform (in less than 24 hours). Then, depending on their criteria, they can start to select the Notes, knowing that these financial products are quite similar due to the diversified approach imposed by the regulator.

How to invest on Indemo ?

This loan-based investment platform offers both manual and automatic investment (like PeerBerry). Investors can make manual investments whilst still taking advantage of the Autoinvest feature (for now, only investments in discounted debts are available).

Manual investment

Like several other platforms (exception for Swaper or Robocash), Indemo offers manual investing. To select loan-based Notes, investors should focus on a few criteria :

Underlying assets: Type of loans that make up the Stack of Notes composed of mortgage loans and/or discounted debts.
Collateral value: Market value of the assets used to secure the loans within the Stack of Notes, as appraised by their partners.
Price-to-Value: This ratio is calculated by dividing the price paid by investors for the discounted debt by the value of the property.

Details can be found in the “Objects” tab of every Stack of Notes listed on the platform :

Investors may also have a look at some other useful criteria unique to each Stack of Notes, such as :

Expected maturity: Estimated time when the Stack of Notes is expected to be fully repaid to investors.
Frequency of payments: Although no regular payment is paid, payments arise when each debt in the Stack of Notes is being discharged.
Price-to-Debt: This ratio is calculated by dividing the price paid for the debt by the current total debt amount.

Automatic investment

This P2P lending platform also offers an Autoinvest feature, that automates investments according to the criteria set by each investor (Like Debitum). As such, investors do not need to manually pick their Stack of Notes.

This Autoinvest feature is designed in accordance with standards set by the regulator in order to comply with their license as an Investment Service Provider.

After setting their first Autoinvest feature, investors can customize the following settings :

Notes categories
Amount to invest
Mortgage percentage
NPL percentage
Reinvest settings

Is it safe to invest on Indemo ?

Indemo is a regulated and licensed platform (Investment Service Provider, MiFID II, investor compensation scheme) founded by a management board experienced in banking and finance, supported by a large array of entrepreneurs and investors. Moreover, the platform is able to take over the lending company in case a default arises.

Pros to investing on Indemo

Regulated platform

Indemo SIA is a licensed investment service provider (License No. 06.06.08.824/547) supervised since 2022 by the Financial and Capital Market Commission in charge of the financial sector within the Central Bank of Latvia.

The company is also regulated under the Directive 2014/65/EU, also called MiFID II. To ensure that investors are aware of the risks of investing, they are required to complete a Suitability and Appropriateness assessment.

These regulations require to keep investor funds separate from the company funds, to conduct regular audits and to comply with multiple reporting processes.

Indemo is also subject to the investor compensation scheme (Directive EU 97/9/EC) that protects investors in case the company goes out of business. The scheme covers 90% of non-invested funds in the limit of €20,000.

Managers’ & shareholders’ experience

The four founders who are members of the management board all have many years of experience in banking and finance. They know each other well and have worked together for many years in various banking companies before founding Indemo.

Moreover, the four of them also worked with Ilja Hagins for several years at Rietumu Banka, before he became CEO of ATLAN Advance Management and Tamarindo Vector S.l.

Finally, Indemo benefits from the trust of many entrepreneurs who have also been investors since the very beginning. The platform has 13 individual and institutional shareholders who have invested several tens of thousands of euros, a sign of the confidence and interest they have in this investment company.

Takeover of the lending company

Indemo has implemented one of the most effective legal security measures in the P2P landscape. This guarantee is part of the legal cooperation structure between them and the lending company Tamarindo Vector S.l. as a partner and product supplier.

While debts are placed on the platform, loan receivables arising from the mortgage debts are sold to the Notes issuer Indemo SPV Issuer No.1 SIA. After the sale, Tamarindo Vector S.l. continues their service to the debts (ensuring collection, recovery and foreclosure of legal procedures).

If a material event of default arises on the part of Tamarindo Vector S.l. (absence of money transfer received from debt collection or real estate sale on the auction), Indemo has a Share Capital Security deed contract that allows it to overtake control of Tamarindo, and become their 100% shareholder.

Cons to investing on Indemo

A young investment firm

Although the founders have extensive experience in banking, finance and P2P lending, the platform is still new. But on the bright side, in 2023, the first full fiscal year, this investment company has already started to generate turnover.

The year 2024 is therefore a decisive one, during which investors will observe both the effective development of the investment portfolio and the growth in the company’s revenue.

So far, Indemo has published its first two financial reports for 2022 and 2023, both audited by Crowe DNW SIA. In 2024, it is planned to publish the first report of Indemo SPV Issue No.1 SIA, the financial vehicle behind the Notes.

An unusual financial product

Among the two financial products offered, alongside the classic mortgage loan investment, Indemo also offers discounted debt investments, with which retail investors are less familiar. Yet this is a product that offers above-average gains in the P2P sector.

With discounted debt investments, they give individual investors access to investments based on mortgage credit and previously reserved for institutional investors.

Discounted debt investments are a class of assets based on non-performing loans sold by banks to financial institutions that take charge of the legal recovery process. Therefore, investors need to wait for the time needed for the court claim to be approved to receive a profit, averaging 15.1% but potentially more.

Market liquidity

For now, Indemo does not offer a secondary market which might be an obstacle for short-term investors. In any case, based on the nature of the financial products offered, the platform is made for long-term investors (far from the short-term consumer loans listed on Esketit, for example).

« The secondary market feature, similar to the stock exchange, is being prototyped, on a legal and operational level, and should be ready by Q4, 2024 » according to Sergejs Viskovskis, CEO.

Investors will be able to invest in the early legal recovery stages of the debt (as shown in every flow chart) at a low price-to-value ratio (PTV) and then sell after one year at the auction stage at a higher PTV, making a profit even though the complete recovery process is not yet complete.

Opinion on Indemo

Besides the standard mortgage loans that Indemo plans to offer soon, investors can already place their capital in an attractive financial product usually reserved for institutional investors and high-net-worth individuals: discounted debts.

With this type of financial product, returns on investment can potentially be very high, as their first discounted debt cycle generated returns of between 22% and 118% for investors.

In addition to these high yields, there is an effective property-based guarantee system and a debt recovery process supported by an effective and predictable legal process already underway at the time of investment and traceable via each investor’s dashboard.

Although the platform is still in its infancy, it is backed by a top-quality management team, a solid base of entrepreneurs who are also investors, and an experienced lending company regulated by the Central Bank of Spain.

Tamarindo Vector S.l. has been operating as a loan servicing company since 2016, thanks to its license as “Prestamista Inmobiliaro”, taking care of a portfolio of tens of millions of euros.

If Tamarindo Vector defaults, for example if they fail to pay the funds receivable in accordance with the agreements signed, Indemo can legally take over control of the lending company. This system adds an extra layer of security to guarantee investors’ interests.

In terms of areas for improvement, the platform may consider integrating additional lending companies in the future to improve diversification, increase profitability, and maintain sustainability of their business model.

The financial products offered mainly rely on the Spanish market which is solid and dynamic, but other real estate domestic markets would be welcome.

Overall, even if discounted debt investments are a little more complex to understand than the usual P2B loans, investing in Indemo allows investors to diversify and boost their crowdlending portfolio. This is a platform with a bright future, and its innovative model is likely to be copied by others.

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References

Platform website
Platform Youtube channel
Analysis by P2PMarketData
Finfellas 2023 Conference: Expanding Horizons
Finfellas website
BusinessWire
Bank of Spain
Repurchase of property discounted debts
Protection for investors on the platform
Register of companies of the Republic of Latvia
REGAFI – Register of financial agents
Pitch Deck 2024 (Confidential document)