The future looks crowded for Invesdor
Finnish crowdfunding platform has the EU – and the world – in its sights.
Grab the bull by the horns. Hitting the bull’s eye. Like a bull at a gate. Given the number of similar idioms that apply to the fortunes of debt and equity crowdfunding platform Invesdor, it seems appropriate that the company’s mascot is a bull.
Oh, and it’s also fitting that crowdfunding is one of the hottest bull markets globally right now, tripling in size last year alone to become a 16 billion-US dollar industry.
“Crowdfunding is a digitalisation of the financing process,” states Lasse Mäkelä, Invesdor’s co-founder and CEO. “Now, basically anybody around the world can invest through our platform and companies can target a much wider audience internationally.”
Invesdor’s chief key to success is derived from transcending crowdfunding’s marketing tool confines. Here monies are collected from investors before each offering closes, rather than waiting and statistically losing up to 40 per cent of the initial investment due to lagging interest.
“We have copied this model from what’s been happening in an IPO process in the stock exchange,” Mäkelä explains. “In the largest case we had, there was only one person out of 780 who didn’t want to pay.”
This secure professionalism has seen Invesdor attract more than 60 per cent market share in Finland in three years. The variety of growth companies and entrepreneurs participating is widespread: the film Iron Sky, football club HIFK Fotboll, storage company Cityvarasto and local restaurants are just some to have successfully raised funds.
More than 500 companies have applied to Invesdor, of which 95 have opened their rounds. Some 38 of these have been successful, raising more than 6.5 million euros in total. And the figure keeps growing.
The first wave of Invesdor’s expansion saw it claim a 46 per cent share of the Nordic market. The next step is Europe. As of April this year, Invesdor can now operate freely in all 31 EU and EEA countries.
It is the first crowdfunding platform to have been granted a fully passportable MiFID licence for investment advice, reception and transmission of orders and placing of financial instruments, enabling it to accept target companies from across the continent.
However, in order to maintain Invesdor’s high quality of service, European companies will be subject to the same stringent selection process before receiving the green light.
“We do our own due diligence,” Mäkelä outlines. “We check the backgrounds of the company, credit ratings and so on. If there are some issues or problems we have to say no.”
Not content with transforming the industry by facilitating investment from the comfort of your couch, Mäkelä also has bigger plans in the works.
“There are three things we are planning to do,” Mäkelä explains. “First is international expansion. Second is launching our crowd bond product, a loan instrument which has an aftermarket. The third thing is a service concept where we can actually sell turnkey solutions for our business customers.”
Streamlining efficiency is paramount for the Invesdor delivery channel, affording the opportunity to sidestep bankers and lawyers and simply get down to business.
“We are like the Uber of fundraising, that is what we are targeting,” Mäkelä states.
Text: James O’Sullivan