Over the years EstateGuru has grown into a mature and large organisation with more than 40 employees at the time of writing this blog post. This pool of talented and experienced people (see our team here) are working hard to bring the best investment opportunities to the platform. In this post, I would like to shed some light on how we operate on a daily basis.
We have divided our operations into eight main areas: Finance, Risk, Expansion, Operations, Product Area, Investor Relations, as well as Sales and Marketing.
Each of them has its own focus area and KPIs to deliver. For example, the risk area is separated from sales to avoid a conflict of interest and to keep the quality of our portfolio at the very highest level. This means that, while the sales team’s focus is to bring in new leads and maintain relationships with current customers, the risk team is responsible for looking over all the loan projects and making the final decision on each case. This way we can ensure that only good deals get to the platform. If something doesn’t go according to the plan and the borrower isn’t able to pay on time, the risk team once again steps in and starts the communication with the borrower. Therefore, keeping defaults under control is also one of the responsibilities of the risk team (more on that).
Another example is expansion and operations. While the expansion team’s main focus is to analyse and find new countries suitable for us to do business in and, once identified, set up initial operations, the operations department takes over once everything is set up and proceed to start growing the business. By maintaining these structural separations and allowing different focus areas for different teams we enable the business to run smoothly and efficiently.
However, having the right structure is only one part of our mission to make EstateGuru into a billion Euro business. We have also realised that being a crowdfunding platform and having more than 30 000 investors on board means that we are almost a public company and that everything we do is monitored by our users. This is actually a very good thing because this encourages us to always be top-notch in all our activities. If people were to lose trust in us, we would probably be out of business very quickly.
To run a sustainable business, you need to have good governance. And this is something that many young companies lack. Therefore we always go the extra mile to prove that we are different. For example, every year our annual report is reviewed by an independent audit office according to international standard (IFRS). Currently, we are using Ernst & Young, which is one of the top four audit companies in the world. We don’t have any obligations to do this but see it as a good market practice to increase the trust of our customers. We also have a separate supervisory board who looks over management’s work and makes all major strategical decisions (like agreeing on annual budgets, expansion plans, and more). This allows us to follow long term plans and maintain the quality of our management. At a more basic level, we have internal written processes and policies for all major business functions.
Good governance also applies to the way we run our processes. For example, all customer money is held separately from EstateGuru’s company money. Therefore, even if something were to happen to the company, all customer money is still separated and won’t be affected.
Not only do we have internal control mechanisms, but we are also regulated by the Bank of Lithuania and are in the middle of the licensing process with both the Finnish and UK regulators, with more to follow. By being externally regulated we carry an extra obligation to follow the rules set up by regulators – mainly user protection, data protection, know your client rules, and know where yours customer money is coming from.
Platform users have probably noticed the extra questions they need to fill out when registering, but this all is needed to follow our know your customer rules. We are using technology to provide the best experience and at the same time ensure the quality in this field is of the very highest standard. For example, we use Veriff and Onfido to help us verify users’ identities. Instead of the user filling out long forms which we then have to process manually (or even asking the client to come to our office), we can make complex decisions in seconds. In the case of documents, the human eye has its limits but machine learning algorithms can find fraud much faster and more accurately. And for the user, the process is easier (because they don’t need to fill out forms but only provide pictures) and much faster. It’s a win-win for everybody.
This example leads to my final point. The core of our business is digital. This means that, even though we have been growing 100% per year from the very beginning, technology helps us to remain lean and efficient. Additionally, smart usage of partnerships enables us to scale the business faster.
All this means that we are not restricted by the need to hire new people to keep on growing and instead can concentrate on hiring the very best specialists who then help us to build the best processes. Because we are a relatively young company we are not restricted by legacy practises, and we can build our processes (using the experience of our talent pool) perfectly, right from the beginning.
Even though work never ends (new regulations emerge, new technologies, the market situation changes) we always want to improve and evolve. We already know where our weaknesses lie, and this allows us to improve those areas quickly. Having this agile structure and following the principles described above should make growing easier and at the same build trust and transparency.
I hope this gave you a slightly better understanding of how we run our business behind the scenes.