EvoEstate closes pre-seed round, sets sights on global expansion

Tallinn-based property and fintech start-up EvoEstate has announced a pre-seed extension of 140,000 euros which closes its 320,000 euros pre-seed round. The company has been backed by Lithuania’s Startup Wise Guys, a Hong Kong investment fund and angel investors from France and the Baltic States.

With the pre-seed round closed, EvoEstate will now turn its attention to taking its innovative real estate investment platform global to begin providing services to interested investors all around the world.

Founded in 2019, the company is a real estate crowdfunding aggregator that makes it easy for retail customers to invest by offering investment tiers as low as 50 euros. Consumers can choose to invest in rent which the company describes as owning a small part of a property and is the lowest risk investment available. Users can also choose to invest fixed-interest loans and in equity.

What sets EvoEstate apart from many other crowdfunding platforms is that its founders invest too. This “skin the game” concept means that certain projects are selected by the founders to invest their own money in. The company says this way potential investors can be sure that best project are selected. “We put our money were our mouth is,” say the founders on the company website.

So far, the founders have invested 150,000 euros of their own money.

This approach that puts investors first has made the platform a preferred choice for real estate investment in Europe, despite the company only being a year old. To date, the platform caters to the needs of some 2,500 investors from 50 countries. Within the one year the company has operated, it has helped co-finance 178 real estate projects in 15 countries. Their average annual return on investment is 12.64 per cent.

During the coronavirus pandemic, EvoEstate has proven to be quite resilient. As other P2P crowdsourcers were experiencing heavy delays in interested payments, the company’s portfolio has remained stable by not exceeding the three per cent mark of late payments. During the lockdowns in many European countries, the XIRR (extended internal rate of return) stood firmly on 12.6 per cent while projects from four countries were repaid. And in the first quarter of 2020, the company has reported repayment on six projects in total.

Further innovation undertaken by the company involves the introduction of a risk scoring model for property investments. Powered by machine learning algorithms the model analyses thousands of crowdfunding deals that have been carried out around Europe in the last ten years. Additionally, there are scoring models on the originators to help identify the risk level of the environment the deal is structured in. Investors can find real data on late payments of each originator. With these features, the company is able to offer its retail investors an experience on the level of institutional investment.

Since the company has rapidly progressed in only year since it has been founded, it has earned recognition from the industry and media. Techhill has named it the best fintech business in the Baltic States.

Back in December, Emerging Europe recognised EvoEstate as one of the 10 start-ups in the region to watch in 2020.

With this new investment, the company will focus on its global operations. Even now, however, only five per cent of investors on the platform are local, with the bulk coming from Western Europe and international financial hubs. Seeing the increased demand for crowdfunded investment options, EvoEstate strives to become available to customers in new regions. Because of that, a part of the investment will be spend on further expansion and on securing the necessary licenses to do so.

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