After a lengthy preparation process and a slow but steady dip into Europe’s biggest economy, EstateGuru is ready to officially launch its full service in Germany.
To find out about this momentous and important step for the company, we sat down with German country head Nicola Picone to get the details behind the launch, the plans for the country, and EstateGuru’s expectations over the next few months.
Q: Hello Nicola, thanks for taking the time during what must be a really busy period for you. To kick us off, tell us a bit about yourself and your journey to joining EstateGuru
A: I was born in Rome in 1990. During my youth, I was a professional swimmer, and after some really enjoyable and successful performances around Europe, I decided to dedicate more time to my studies. I received my Masters in Law in 2014, and, after completing my dissertation I moved to Berlin where I started my professional career in the real estate and financial industry. I am proud to say that I have a track record of around €750M in transaction volume achieved through my corporate and advisor experience. In 2019, I completed my MBA, a degree that completely changed the way I approach my professional and private life. Now I am excited and eager to head up EstateGuru’s expansion into Germany. I relish the opportunity.
Q: EstateGuru has actually been operating in Germany for some time, why has the official launch taken so long?
A: What I love about EstateGuru is that the company believes in taking the time to do things in the correct and systematic way. There were some “trial deals” launched to check out the market, but the company is officially active only since the 15th of October 2020. Laying the groundwork for the launch took a long time due to the usual bureaucracy and the acquisition of licenses, and establishing a partnership with our fronting service, Varengold Bank.
The first project from the new German office was released on the platform on the 5th of November, 2020.
Q: Why does EstateGuru see Germany as an important market?
A: The German real estate and investment market is one of the biggest and most established in Europe and one would even classify it as one of the most solid and important in the world. Consider that, even if there is a world pandemic situation as we are experiencing at the moment, the numbers leading to the end of September 2020 shows us that the economy still recorded a record in the first half of the year, and overall, even the ten-year average was exceeded by 7% (source BNP Paribas Real Estate).
Considering the economic environment, which is still marked by the effects of the corona pandemic, it is clear that investors have great confidence in the German market and economy. As a Pan-European company, EstateGuru sees establishing and growing our German presence as a vital step in our long-term growth plans.
Q: What sets you apart from other alternative financing options in Germany? Why would a borrower choose EstateGuru rather than a bank?
A: In Germany, the country of banks, it’s not so easy to get a loan. Yes, it’s true that for long-term loans there is a really low-interest rate, but the borrowers that are looking for short-time loans don’t have many options. Added to this is the fact that many of these borrowers are small or medium-sized enterprises, they have even more trouble securing access to credit.
We are also more flexible and happy to do custom deals based on the borrower’s needs, so they will have more options, flexibility and opportunities with us, instead of with a bank or a private equity partner.
Q: Your business model relies on both borrowers and investors. How active is the German investment community?
A: Our platform is a balanced system, it grows organically. If we get more borrowers/projects, we need more investors, if we get more investors, we need more borrowers/projects and so on. Our German community of investors form a big part of our investor community, in fact, they are the largest community of investors at EstateGuru and they are really active and also really keen on our structure. We think that this community will exponentially grow after our market launch. We are also looking for institutional investors in the German market and we already have some good and positive feedback in this area.
The bigger the market, the bigger the investor endorsement and also the potential environment.
Q: Do you expect this to change once the platform offers more German projects?
A: I expect obviously a bigger impact of the German projects on the German investors. Probably we will see more German investors who invest only in German projects, but we see that diversification, not only in terms of the asset class but also geographically, is really important and is our market advantage. More investors will automatically come from the market launch in Germany. Until now, we haven’t done much marketing to attract them proactively to our platform, as we were legally prohibited from marketing activities. One great thing is that many German financial bloggers found us, approached us, and promoted EstateGuru due to real enthusiasm for the product. So they have effectively been marketing on our behalf in a very positive way.
Q: What makes EstateGuru attractive to investors?
A: EstateGuru is cooler than the competition. This is the first impression I got when I started to invest in EstateGuru before starting to make contact with the company about this new opportunity. I think we are pretty intuitive and fast. There are many options and opportunities, as well as the amazing customer service that we provide. We have a great service and platform, the numbers are pretty attractive, not only for the high return possibilities but also for the security given.
Q: What challenges do you see in establishing EstateGuru in Germany?
A: Germany is a low-interest market, so it will be difficult to convince the borrowers that have good contacts with banks to get in on our product. The bureaucracy is a mountain that has to be climbed every time, but we are well set up to deal with that as well. We are entering in a new market during a difficult global economic situation, but we believe that this is our market advantage and also a plus for our investors, who will have a simple and safe way to invest because, from the borrower side, we are dealing with companies and not private individuals and the real estate market, as I said earlier, has not suffered too much of the coronavirus fallout.
Q: Do you think that the fact that EstateGuru is an Estonian company will help or hinder your efforts?
A: We can not anymore define EstateGuru, after 7 years of activities in all Europe, as a pure Estonian company. We are a big team of experts coming from many different countries and many different experiences. I would like to highlight us as Europe’s leading platform for alternative financing, and yes, our HQ is in Tallinn. As a fintech company, we should be proud to have been founded in the world capital of fintech companies.
To be continuously mentioned in the TOP 100 Worldwide Fintech companies also provides its own answer to the question.
Q: What influence do you think the upcoming EU regulations for crowdfunding/alternative financing will have on your efforts to grow in Germany?
A: This new regulation will help us significantly. We will be able to change strategy, lower our actual costs and so forth. We are all waiting for it eagerly. The growth will probably be exponential not only for Germany but also for EstateGuru as a whole and in all our operating markets, giving us the opportunity to create new awesome services for all our clients and partners.
Q: Thank you very much for your time Nicola and best of luck with the launch.