Q&A with Grupeer Founder Alla Kisik and Executive Vice President Vladislav Filimonov at their office in Riga – review 2019

Q&A with Grupeer Founder Alla Kisik and Executive Vice President Vladislav Filimonov at their office in Riga – review 2019

Listen to the podcast or read below

Resume of key topics in this detailed article

This is a very detailed article about Grupeer, so here is a short resume of the key topics I discussed with them. Remember that you can also hear this as a podcast in the car, on the bus or taking a walk, by using the player just below the header image. I am positive that your time will not be waited if you are considering investing or if you are already using the platform. 

Key topics: 
Secondary market next year, 2-factor verification, security, missing statistics on the platform, example of my own statistics with graphs and Excel document, due diligence, loan originators, future markets, expansion plans, mobile app and auto invest diversification. 

If these topics interests you, you should really keep reading. At the end you can also find a great guide with a lot of screenshots on how to register. 

 

Several visits to the Grupeer office in Riga

I think that Grupeer is an interesting platform that stands out, as they mix both real estate and loans on their platform in their auto invest. I have been invested with them for a while and it is one of my biggest platforms. If you would like to know some more about Grupeer and their success story, there is a very insightful article by Forbes Finland that Grupeer shared on their blog. It is an interesting read. 

I visited Grupeeroffice in Riga to see their operations and do an interview with the Founder Alla Kisik and Executive Vice President Vladislav FilimonovViktorija Bondarjonoka, Affiliate & Community Manager, was also present. Here are the questions I asked and the answers I received. 

The interviews with Grupeer

Vladislav: 
Before we get started, I just wanted to tell you a little about the Danish market. The Danish market is a priority for us, as you are involved with many of the Danish investors I just wanted to give you a small sneak peek of Denmark as such. Denmark is a really important market for many platforms and we are no exception. Denmark is generating one of the highest amounts of investors. Obviously, when we initially started, we were not sure which countries we needed to expand to. As a result of that, we expanded to 78 countries. So when we switched to one of the banks that we worked with before, for example, Swedbank, we chose several payment options with was Baltic International Bank (BIB), and SatchelPay as payment systems. We also understand that in Denmark specifically, there is some internal security in place that is not really connected with realities in terms of, “don’t send the money there”! Internal security in Denmark is strong and the Danish banking system really cares about their clients. As a result of that, we are really working on specifically to provide specific top-up and payment methods that work well. That will firstly include trust with the banks and eliminate the expenses you need to pay for the transfers. So we have a project dedicated specifically to Danish investors as we are getting feedback that one of our payment methods, Baltic International Bank, which is a big trusted bank, is unfortunately not fully trusted by Danish banks. As a result, Danish investors sometimes get the message that they should not send the money to that bank. We sent immediate feedback to the banks and we got the approval that Baltic International Bank is actually a really reputable bank, but due to the Danish filters, that message could still be sent out to investors when they make a transfer to our platform. So we are working actively on providing specific payment options for Danish investors to avoid this in the future. 

Georg: 
That sounds good. I think those messages can really scare new investors when they receive it after making the first deposit. I actually use to get them when I first started using the platform, but I do not receive them that often anymore. 

Georg: 
Are you planning on getting Danish loan originators? 

Vladislav: 
We don’t have any specific goal of limiting the countries. Realistically we could place Danish, Swedish and whatever loan originators on our platform, but if the yields would be relatively small, let us say 3 to 4 percent and the company is not fully trusted or audited by us, I don’t really see an interest, because I am an investor as well. Instead what we are doing is to spend more time on security and onboard those that can provide relatively high interest rates like the ones we have already added to the platform. So quality versus quantity. 

Alla: 
The thing is that the quantity from your country would probably be really good but at the same time, they would not be able to match our current yields. 

Georg: 
That is one of the reasons that your platform is so popular with the Danish investors. There are a lot of crowdlending platforms on the Danish market, but they do not deliver anywhere near the yield you are offering. 

Georg: 
When an investor is looking for a new platform to get into, I think it is really important to know something about the experience of the people behind the platform. Can you tell me a little bit about that?

Vladislav: 
It is my second year working at Grupeer and the initial owners of the platform worked with real estate, which is  why Grupeer is a bit unique in its structure, having not just loans but a combination of both loans and real estate. Our background is not so visible for investors. When we speak about the real estate products, we are not just interested in placing the different buildings on the platform, having a high yield and then getting a commission. That is not what we are about. Every single real estate object has its own little bits and pieces that we have to monitor. For example, if we just send the funds, let us say one million euro, to the real estate company, how can we guarantee that they will use the funds on what they are supposed to and that they will deliver the result on time? That is why when we started to work with these real estate companies we realized that relatively high amounts are involved and we had to expand the control of these companies to be sure that every single euro that is sent to them is used for the project. That is why Grupeer did 3 things. First Primo Invest. We came to the conclusion that we needed to be shareholders in this company. To have, not just physical control, but also control of the cash flow and everything that happens in the company. So we are in that company right now as well. The second thing that is happening is that we have our internal audits on the projects in every single country like Belarus and Norway. They are sending us reports every week about the status. The third thing is that we are dividing the amount as you can see on the platform into smaller amounts. That helps us to keep our developers hungry. For example, if they have a specific order for windows and they need x amount of money, they are only going to get x amount of money and no more. Adding all these small pieces for a project together like this makes me sleep better at night. Making sure that investors who invest in that specific project are more secure. What I also feel is bad from the Grupeer perspective at this moment is delivering this information to investors. As you understand in fintech everything is happening really fast. So what makes sense for us is maybe not that understandable for investors. So I am happy that you are here so we can share this information. We now also have a blog, where we are going to introduce a lot of different things to our community of investors. There is a lot of work happening in the background that most investors don’t know about. But that is the method of control we use. You can also see that some of the loans are placed through the Finsputnik platform. This is another vehicle that we found to be more secure for investors that basically is an affiliated platform to Grupeer. So if you are investing in e.g. 150 loans from individual borrowers it cannot be guaranteed that they will all pay back what they owe. This is normal, as where can be circumstances that prevent them from paying. For example Russia. A lot of investors are a bit afraid of investing there. I am not, as a personal investor, because I understand what is happening there. Imagine that you have an agreement with a company like Finsputnik who said that they are supplying payday loans. We said to them that we don’t want to consider them from every single loan. We want to consider them as a portfolio. In your portfolio, there are unpaid loans of approximately 20 to 40 percent, but we know that you are actually getting 1½ percent per day until the end of the month which is equivalent to 480 percent, so even though you have a high default rate you are still profitable. It is better to have one big business loan. There may be some part that is not paid back, but you still earn profits. So investors should get their money back. So Finsputnik was a way of squeezing all loans together and have one big business loan, send it to the company and make sure that the funds are coming back to us. This is also a way we differentiate Grupeer from other platforms. In every single business, you can choose to do everything very fast, onboard a lot of new business fast and then wait for something to happen to figure out if it was a good decision or not. I think we are a bit slower, but coming to our decisions in a more secure manner. 

Georg: 
I think it is also important to listen to the investors in the platform and not just adding everything at ones. It is better to focus on functionality that is truly useful to most investors and not spending a lot of time on building functionality that is only used by a few investors. 

Vladislav: 
I the beginning we said: “Yeah we want to do everything.” Then we realized that we needed to step back and to just make a few steps forward. First, let us wait for the investors feedback to see what to develop next. I used to be a developer myself and worked for very big companies like Paypal and Mastercard and there is a very clear route on what you need to do and what you need to get into. On a peer-2-peer platform pre-setup rules. It is more about getting experience, make a few mistakes, resolve them and continue until you have the proper product. It is only my second year here at Grupeer, but it feels like I have been here for ten years. So much is happening. 

Alla: 
I remember it well. It was not really mistakes, but more like challenges. The thing is that fintech was growing really fast at that moment and almost every month we saw new products coming. So to beat your competitors in the market you always have to look at things from many different perspectives. There are new banks coming all the time and we always need to look closely at our competitors and move fast. The big companies have their standard processes of business where they have been working in the same way for 10-15 years or more. But in fintech, everything is moving all the time and we have to move with them as well. Grupeer is also growing fast and that of course also gives another layer of challenges. 

Georg: 
As there are a lot of new platforms popping up, investors does not have a lot of loyalty towards the platforms yet. They jump around a lot when small changes are coming, so of course, you step up your game all the time to stay popular. 

Georg: 
How important is it for Grupeer to grow fast, when there is so much competition between platforms? Some platforms are really focused on growing fast and other platforms are showing a bit more caution. What is Grupeers strategy when it comes to future growth? 

Vladislav: 
I would say that we are somewhere in the middle. We, first of all, think about the investors. We see functionality getting released that we have been working on and testing from a legal standpoint for years. We want to place ourselves as a stable platform so we can afford to go fast, but we cannot afford to make mistakes in terms of investors loyalty as well as security. 

Alla: 
I can add to that. We would like someday to become basically an investment platform. So we are looking for different types of markets. Not only in peer-2-peer, and that is why we are not growing as fast as some of the other platforms. At the end of the day, we would like to have a platform where investors have the opportunity to invest in many different options. Diversity is what investors are looking for and in this field, you have to have that. 

Georg:
That is true. To diversify well today, investors are spreading themselves over several platforms, myself included. 

Georg: 
Grupeer is spreading themselves over a lot of projects and loan originators in different countries and of course that requires a lot of expert knowledge about the different fields. How does Grupeer get this expert knowledge? I know you work with some external companies to do due diligence. How do you select these companies? Which resources do you have in-house and what is external? How well do you know these external companies?

Vladislav: 
About the in-house resources. Our internal auditors are from this company and they are doing high-level financial analysis. When we talk about other companies we are hiring internal lawyers. We review what the company is about, people behind the company, and in some cases we also get questions from investors about why we work with a specific company if they have existed only a year or less. The answer here is that it is not about the age of the company it is about the people behind the company. When there is a new start-up with experienced people who have been working in the same field for 10 to 15 years, we trust them. From another perspective, we also want to understand what we are placing on the platform, so therefore it is not enough to just work with internal resources. For external resources, this is particularly for the countries where the loans are placed. We are also using external auditors in the outsourcing that we use. All these factors help to evaluate the risk for investors. There are however no perfect scenarios. We are working a lot with security. How we choose the external resources depends on the markets we operate in. We can also easily speak to owners of other platforms and share experiences about security and about markets. As you said, most investors invest in maybe 10 different platforms. So if I share experiences with another platform, I am not afraid that they will steal my investors. A lot of platforms just want to grow and get bigger really fast. But let us speak about quality. How many quality people do you have on your platform? I could have a hundred, and you could have a thousand. But I will get more funding than you because my guys know about investing and on your platform people are just signing up because you have a beautiful website and some nice words that they put on the website. It is also about educating the community and sharing experiences. About externals, you cannot understand every single country that you are in. If we go into a new market, we need external experts to help us. We will have a team to review them and we will also go there physically to review them. Even if the paperwork looks ok it does not mean that there is a green light. The majority of the incoming requests we have from originators are still declined. 

Alla: 
Our internal lawyers are really experienced and they already have their own market opinion. They already have 10 to 20 years experience, they are used to working abroad and they are always suggesting specific companies to use. With one country it does not mean that we are working with just one company. Sometimes we work with e.g. three different companies just to have different opinions. How many resources we use also depends on the size of the project. 

Georg: 
You said before that Grupeer is communicating with the other platforms. I think that is really positive. Is there a network between the platforms so if someone comes to you with a project and you find out that they are not being honest and therefore reject them, will you share that somewhere in your network? They could very likely try to take the same proposal to another platform after you. 

Vladislav: 
One thing you need to understand about peer-2-peer platforms is that right now you can find more than 100 platforms. The biggest risk I see right now is the new players who are trying to grow fast to catch up. Create a platform and onboard someone that other platforms have dismissed. But the strong players, and I see Grupeer as one of them, can share information about their internal investigations. Sometimes we even ask advice from other platforms or somebody asks advice from us. Of course, there is some very confidential information so we cannot say why we turned a project down. 

Georg: 
I see a lot of new players and everyone is with a buyback guarantee or fund, and they have very lucrative affiliate agreements. That has resulted in a lot of blogs where all platforms are wonderful and look like they are only built to get investors to sign up to the platforms but offer no real value or information to potential investors. Therefore I really like that you are doing your part as well as sharing industry knowledge and educating new investors with for example your blog.  

Vladislav: 
You are absolutely right. There are bloggers who really want to educate people like you and then there are others that are clearly just focused on getting a ton of referrals and they will say that everything is good. Bloggers have a social responsibility to explain: “Listen guys, there is nothing ideal. There is no possibility that everything is going to go well”. What I can say about that specifically is this. Thy to understand who is behind the platform. Stop thinking about the beauty of the coolness of a platform and just jump in because your friend is using that platform. You for example. You came to the office and I assume you have been to other offices as well. Now you are starting to create your own opinions that you will deliver to your audience. That is really important. This is one of the elements of transparency. If a new player appears, send them some questions or go there and talk to them. Ask a few financial questions and when you get the answers you will understand what is going on behind it. 

Alla: 
The “bonus hunters” as we call them, they sometimes come here and ask very basic questions and they don’t really get into the details. They just get some basic information and pictures at as many platforms as possible. 

Georg: 
Grupeer stands out in another way as well. You offer buyback on real estate objects as well. Why do you think that other platforms do not offer the same? 

Alla: 
First of all, we have very good experience in construction. Because of that, we know that none of the construction projects were ever built on the date that they were supposed to be built. There are too many factors involved. If something goes wrong we need to make sure that there is something behind it. If it is in Norway or Belarus, we need to have companies go there and report back each week with pictures and progress. But no matter what, we make sure that there is some kind of collateral behind the object. We are lucky to find these buildings and we are always looking for buildings with some kind of security behind them. I am not sure why the other platforms do not mix loans and real estate like us. It may be that it takes some more work. The other platforms that have real estate, only have real estate on the platform. 

Georg: 
Now let me ask the question that you most likely got a million times before. When will we see a secondary market on the Grupeer platform? 

Vladislav: 
The secondary market is not an option. It is a necessity. So this is something that we want. We have done a lot of testing and we want to make sure that the product works the way investors want. But it is a priority for us. We really hope to have it implemented at the end of Q1 next year. It also has to be adjusted to the new products that we are planning to implement. 

Georg: 
There have been some questions on when we will see some of the longtime requested improvements to the UI? Sorting under investments, statistics, reporting and so on. 

Vladislav: 
We have got a lot of push back from investment bloggers on this topic. They say: “When we look at the website it gives one opinion, but when we come and talk to you we get another opinion of your business”. For me, such words as GDPR, security, DDOS and the rest are not just words. From the background, we are much further than it looks. Even other platforms come to us and ask: How do you secure your data? How do you work with data? We are encrypting our data, we do specific attacks to the website to find out where the vulnerabilities are. For Grupeer, this has a higher priority. I understand the needs and features. But from the investor’s side, we want the personal data to be safe. We want the funds to be safe and we want to give the returns that we promise to the investors. The rest is good. 

Vladislav: 
Maybe I can ask a question back to you, now that you are asking so many questions? 

Georg: 
Sure, I don’t really see how I can say no to that. Haha. 

Vladislav: 
Some releases are connected to the interface changes, some are not. Maybe we should put them on our blog for investors to see, even if they are not that big changes like the secondary market? Would it be good to share that with investors or would that be too much? 

Georg: 
I think it would be an excellent idea to share the release notes from your deployed changes. That will give a good insight into the fact that there actually is some progress. I know your backlog of changes is probably huge and I understand that you need to prioritize. But sharing release notes will most likely make investors understand who they have to wait so long for requested functionality if they see that the changes you did release are regarding e.g. security. It could also give you some valuable feedback from the investors on the new functionality and maybe how to improve them. 

Vladislav: 
Can I ask another question? I am really customer orientated and I think that NPS or Net Promoter Score is crucial when it comes to fintech. NPS is an index ranging from -100 to 100 that measures the willingness of customers to recommend a company’s products or services to others. It could be sent out on a survey. Do you think it is important to make such statistics visible to investors? 

Georg: 
Absolutely. Investors are always looking for other investors opinions about a platform. That kind of information and openness is very valuable to investors. I would love if you would provide NPS to your investors. Are you already gathering data for the NPS? 

Vladislav: 
We already conducted the first round of NPS. We are now setting up recurrent rules for that. We are going to share highlights with everyone and will directly reply to each one who sends us back a survey. 

Georg: 
What is the average investor portfolio size at Grupeer? I know that you cannot give to exact numbers, but just an approximate size? 

Vladislav: 
You are right that I can not enclose a specific number, but an approximate round number is 5000 euro. I will say this. When we talk about P2P lending then you should try to feel the outcome. When I started investing in other platforms I first tried to invest and then get my money back. No matter how much you invest in any platform there is always a risk. You should ask yourself can I afford to invest in this? Can I afford to invest in something where I am not a hundred percent sure that I can get my money back? Personally, I never invest money that if I lose them it will affect my daily life, work, and so on. It should be an amount you can invest and then the investment can either grow, stay the same or you can lose some. Diversification is also a must. Ideally, you also need to do your homework on really understanding how your investments work. I have been getting questions like: “How come the company is getting a return of 200% profit, but on the platform, the investors get only 12% to 15% profit?” You should not look at this as a negative factor, but a positive factor, because there are different risks associated with the companies. 10%+ is actually a good return. I would be more worried if the same company would give me 20%+. 

Georg: 
I understand that Grupeer needs to make money as well. Besides all the investigation that goes into a project and the due diligence done by experts does not come cheap. 

Georg: 
If we talk specifically about real estate investment objects I think that a lot of novice investors just look at how low the LTV is on an object. How can an investor make sure that the LTV is reflected in reality? I mean, how can an investor know that the evaluation is not too high?

Alla: 
We actually do a really good due diligence of the objects. If investors have any questions, they can ask us  and we can compare to the others similar objects on the market. We have all the statistics in the office. We do not want to share all the details we have on the objects on the website, because no one would read it. Every project could have maybe 70 pages of reports that we use internally. But no investors have time to read it. But if an investor is really interested in more details on a specific project we will be happy to send it to them. If you want to do your own due diligence that would require a lot of knowledge and work. You need to look at what is near the building. Are there restaurants nearby? Maybe there is a prison next to it and nobody will buy it. There are a lot of things that can affect the price. So for an investor who lives abroad, it would be quite difficult to do. I think it is also important to look at the experience of the company. If it is a company that just started a year ago, I would not trust them. Unless of course, the people behind the company have 10, 20 or 30 years experience in their field. Then it is fine. But a new company with new people would have too many problems for sure. With the business loans, I think it is a bit easier. But with construction, experience really counts. 

Vladislav: 
You can also look at why the company is taking the loan. The construction could be in the last phase. One of the reasons behind that is that regulatory thing like e.g. Belarus. You will never get your accreditation unless you built your building fully. There are many things to look at, but the LTV should not be the sole trigger to make an investment. Look at the company, the people, the building and the country. Why Belarus for example? Look at the legislation that has recently happened for IT companies. America and Canada pay no taxes and they don’t need visas, so they can just come and work in Belarus. There are hundreds of companies ready to buy real estate there. That is the reality. That is one of the reasons why we have projects in these countries. 

Georg: 
Moving to a whole other topic. The P2P conference that was held earlier this month was the first of its kind, focusing solely on P2P in the Baltics. What did you think of the P2P conference and in retrospect what could be done to improve it if they decide to have something similar next year? 

Vladislav: 
First of all, I loved it! I loved the healthy conversations with investors, bloggers and other platforms in regards to the community. That I would do differently next time e.g. I would be shouting with my team come to us prior to the conference. Apart from the speeches that were on the stages, there was a lot of interesting conversations. I think more investors should come and see the platforms and talk to us. See where you invest your money. It is a great way for investors to start building their education. Are we going to the next one? 100%! There is nothing bad to say about the organization of the conference. Obviously, it was the first one of its kind. so, of course, there are improvements that can be made. But the good thing to see was that every single person was charged. Come and ask the good questions as well as the critical ones. Our list of requested improvements from the community became twice as long and we also removed some of the tasks we had on the list. There were some features we thought that investors wanted, but it turned out that it was not the case. For all platforms, I can say that we learned a lot. We can sit in the office and try to create something cool for the investors, but we learn so much more when we meet people in person. P2P is big and it is growing fast. 

Georg: 
I actually got some negative push back from the community about the conference, especially targeted at Grupeer. You had a bathtub with fake 100 euro bills in it, and some beautiful promo girls sitting in the bathtub filled with money. On the one hand, it was a fun gimmick and it got a lot of attention on Instagram with some cool pictures of people in the bathtub. However to some investors that could be a negative thing. Some people might think that you were not being serious about the topic of the conference and investing. Some liked it, some did not. But I can see how some people may see it the wrong way. 

Alla: 
That is a good comment actually. You mentioned it before to us and we have talked about it internally and have decided not to use the bathtub anymore, as it could send the wrong message. So we actually listen to the feedback we get. But just to clarify, the reality about the fake money was there was a promo code on the back for new investors to get a little bonus to invest, ones they signed up to the platform. On the back it said, “It would be real money if you invested with Grupeer“. We were trying to make it serious, but at the same time fun. We understand that P2P is serious and at the end of the day, it is about investors money. Money invested by people who go to work and put in a lot of hours into earning that money. Our intention was to say: “It would be real money if you invested with Grupeer“. 

Georg: 
Is there any plans to launch a mobile app?

Vladislav: 
Yes, it is already placed in the backlog. But it is not our first priority. We have been asked about this from several investors. But there are good and bad things about it. One investor actually said, “My head wants an app, but my heart does not. Because if I have the app I will be checking my investments every two minutes.” But of course, it is the future to just use your mobile for everything. 

Georg: 
How do you plan to improve your cyber security? Is there anything high up in your backlog with e.g. implementing 2-factor verification with Google authenticator or similar technology? What about brute force attacks and login from a new location?

Vladislav: 
2-factor verification will be implemented and that is definitely on the priority one list of changes. We are preparing our website against DDOS attacks. It is all about security. Our IT department is growing all the time. So security is priority number one for our platform. 

Alla: 
There is already a lot of security in place. If you enter your password wrong too many times your account will be locked and suspended. Then you can wait for a few minutes and you will be able to log in again. If the problem continues, then the investor can just call Grupeer and we can unlock the account when we have identified the investor. 

Georg: 
Why are you splitting up your real estate projects in smaller chunks in the auto invest? I will invest in different chunks, but basically, I invest in the same project. It looks like I am diversified but in reality, I could be heavily invested in the same project. 

Alla: 
The auto invest will be changed in this regards with some filters so it will be easier to diversify. At the moment the reason we slip the project up is that it is easier to control the construction sites. If we receive a report where we can see that they bought windows and then I can send the portion of the money just for the windows. We don’t want to send all of it at ones. They have to be hungry in order to grow, so that is why we are sending smaller portions. Then we know that they will do it and later ask for more funds. We have a legal agreement this the construction company about that procedure. The auto invest will be improved on this point, but if you want better control over it right now you will have to do it manually. 

Georg: 
You speed of deposits seems to be way slower at Grupeer than on other platforms. What is being done to improve on that?

Vladislav: 
That is our absolute top priority at the moment. We already covered this somewhat. Historically we worked with one specific bank, which was Swedbank. Later we switched payment system to improve the transfer time. We started to work with a company called supercapital. Then we started to experience massive delays. Even some payments we are still trying to get back. We decided that we were not going to wait for them to resolve the issues with individual payments. Instead, we put in our own funds and paid investors immediately. Supercapital is no longer a partner with us. Then we started to work with BIB which is Baltic International Bank as well as SatchelPay. But there are still some delays. So we will implement an instrument that will be much faster. We want to have the payment in the account on the same day. The same goes for withdrawals. I believe that it will take some time, but we will definitely add more options to deposit. There are no problems with the funds or anything like that. It is just the time it takes and we are not satisfied. It is something that we will improve on. Specifically for the Danish market, we want to go into business with one of the local players to increase the speed of the transactions. 

Georg: 
I share the concerns of many investors on your platform. You have no statistical data at all on diversification. T
he concern is especially around the development project in the auto invest. An investor could do his or her own statistics, but it would take a lot of work figuring out, how much goes to a single object. They need to click into each single loan and sum everything up in a spreadsheet. Is there any timeline for when you will be adding statistics to the platform? 

Alla: 
That is true. There is not yet statistics available on the platform. I cannot give you a specific date on when it will be available, but it is on the priority one list and our plan is to have statistics available on our platform for investors before the end of the year. 

Georg: 
Talking about the auto invest and the development projects. Is there a maximum amount that can go into one single object at the moment or is there no limit to the amount? 

Alla: 
There is no limit at the moment. If an investor wants full control of exactly how much money goes to each development project, they need to turn the option of in auto invest and invest in the development projects manually. 

Georg: 
I think it would be a great addition to your auto invest if investors could set their own limits to how much funds they want to allocate to a single object, depending on the individual risk level. It could be a field where they could enter a number, e.g. 1000. Then auto invest would exclude the object ones 1000 euros was invested in a particular object. Maybe there should be a minimum on that field as well. If most investors just put 10 euros in the field, then you would never be able to fund a project like the hotel in Belarus. 

Vladislav: 
That is actually a good idea. I will take it up with our development team. 

Georg: 
Speaking in particular about the real estate development of the hotel in Belarus. That is a big project. The currency in Belarus is ruble. That is a more volatile currency than euros. And I guess they pay you in euros. What happens if that currency crashes and they will not be able to pay you back? It is a construction project, so there is no building in place to sell yet, if the project defaults. What kind of collateral is there in this particular project? 

Alla: 
First of all, the ruble they use in Belarus is not the same ruble used in Russia. It is less volatile, but still more volatile than euros. Second, we have a few buildings as collateral and also a shopping mall that can be sold to cover the buyback if the project should default. Like I said before, the developer also just receives the funds little by little as the orders come in. This keeps them hungry to be on time and we can follow the development closely on the weekly meetings at the project. 

Georg: 
In your auto invest, under countries, there are 195 countries listed that can be chosen. This is a bit misleading to investors. We talked about this before and I know that it is in your backlog to change this. How many countries are you operating in? 

Vladislav: 
From the investor perspective, it is 80 countries from where the investors are registered. But if we speak about the projects I will need a little time to check the exact number at the moment. 

Viktorija: 
I will check it. 

Georg: 
Where can investors find financial reports about Grupeers business operations? I can see that there is some information on Lursoft, but it is the basic information that is available for free. You would need to pay to see the annual reports. 

Viktorija: 
Yes, I think it cost 15 euros to get access to the full information. 

Vladislav: 
Yes, but all the information is there. It is legislation. There is nothing available on the Grupeer website yet but it is in the pipeline and this is something that will be available. Financial transparency, as well as technical transparency, is the core for Grupeer at this stage. We are still discussing if the technical transparency should be after each sprint. Of course, some things like security issues will not be enclosed. But all the technical elements regarding functionality, we don’t see any issues to share. Apart from the technical perspective, I think the financial will come as well. At this stage, we are thinking about the annual reports and maybe quarterly but that is more tricky. We don’t really have any good tools for it. Let me tell you why. Any company can be profitable, in the media. Then they start to reinvest the funds into production and then they will not be profitable. It all depends on what kind of company it is. Do they want to stay static or do they want to grow? So for us, it will fluctuate. 

Viktorija: 
By the way, we have 14 countries. Spain, Russia, Belarus, Poland, Bulgaria, Latvia, Lituania, Norway, Estonia, Germany, Sweden, the Czech Republic, Nigeria, and the Philippines. 

Georg: 
Thank you! 

Georg: 
Some of your new loan originators have less than a years track record. How safe are they? E.g. Nordcard. 

Vladislav: 
About each company, we are estimating not just the financial data but as well the resources that they have, including the people, management and the tools that they are using. Scoring systems that they are utilizing and so on. Apart from that, we are also estimating their business model. If someone tells us that they want to go to a specific country in Europe, that we think would be too risky in terms of losing the funds, we become a bit more suspicious. Regarding Nordcard in particular, they are located in Latvia, same as us, so for us, it is very easy to do due diligence and understanding who is behind. The people and the location is important. That does not mean that we stop looking at them after we onboard them. If we see some fluctuations we will start to postpone placing new loans on the platform. We continuously evaluate them. Each platform has to minimize the risk. That is why investors may see a bit lower interest rate than on some platforms, but they go with the platform anyway because they believe in due diligence, scoring, trust, relationship and so on. You have to see full circle when you choose, not just look at the numbers. 

Georg: 
What about the interest rates? Will they go up again? Some investors say that they are considering moving their funds to other platforms. I am not one of them, though. I understand how much work you are doing in the background. 

Vladislav: 
We did not set a target of reducing the rates even though you can see on the market that the rates are getting lower and lower. On some platforms, the interest rates are extremely high. But it depends on the business model. We do not have a strategic idea to lower interest rates. It is a matter of the individual contracts we are signing with the loan originators. I would be really happy if we could offer 16, 17 and up percentage, but in reality, the highest at the moment is 15% including the cash back. I believe that is still high. The interest rates could come up again, but it depends on due diligence, back office work that we need to do and so on. You can do it hardcore as some platforms do, placing the highest yields and crazy projects. Some of those projects we have rejected and later they appear on other platforms. We take a more, let us say German, approach. We estimate a lot before we place a project. 

Georg: 
Is Grupeer planning to put more short term loans on the platforms? Like 1 to 6 months? 

Vladislav: 
Personally, as an investor, I would love to diversify my portfolio with short loans. With new players, you need to feel it. You need to place some funds, receive them back, understand that you can actually earn money from that, and then reinvest. We are looking for partners to place short term loans. The strategy on Grupeer is not to eliminate the short term loans. It is all about loan originator security. I would love to have it, but I will not be able to tell you when it would be. We could place a lot more loan originators. But the way we do due diligence here at Grupeer is really strict. We really want to build our portfolio and be more diversified. However, we are not setting up our target in terms of numbers. We do a lot of market analysis. We spend a lot of time educating ourselves on what is going on on the market. What regulations have come up? What companies merge? Some of the loan originators are already on other platforms and one of our targets is uniqueness from the contract perspective. But there are cases where loan originators are on several platforms. We could also remove or replace loan originators. That is also a health indicator for the platform. 

Georg: 
What will happen if Grupeer as a platform goes into bankruptcy? 

Vladislav: 
We are in the final stages of deciding who will be the middle man if the platform crashes. The company will be protecting investors. This information will also be available on our platform. Second, there is the liquidator administrator who is assigned in each country. We want to be transparent and provide as much information as possible. 

Georg: 
Does Grupeer plan to add some number of count down to when the next project starts? Like Crowdestor have? 

Vladislav: 
Yes, that is something we plan to add at some point. There will be a bit more features added to the functionality. I cannot say exactly what. 

Georg: 
What is Grupeers plan for the next 5 years? What new markets will you go into? 

Vladislav: 
Like we said before we would like to go through a transformation from a P2P platform to an investment platform. We expect to have more investment products. It could also be integrating several platforms into one. We would also like to finally set up the P2P aggregator for the industry, where investors could get more information about who the platforms are, who is behind them, and what the risks are associated with those platforms. We are already hiring people who will do the due diligence of the platforms. The ideal scenario would be that you can just press one button and invest in several platforms without the need of signing in to every single one and passing the KYC, that is “know your customer”, where you confirm your identity with identification documents. That could also eliminate the questions about the new kamikazes that are coming to the market with the highest yields without following the legal procedures and so on. I really hope we will be able to succeed it that project. I would also like us to finalize the unified payment system, that will allow you to use one card to invest with Grupeer and also use for your purchases. We see this going on on other platforms as well. Everything is about the speed of transaction, the security of the funds, and making sure that there are no blockers in the system, such as banks, that can slow down the process. We are also really looking at the new markets in South East Asia, like Indonesia, the Philippines, and Vietnam. We really believe that these aggressive markets with very good legislation could be a good addition to our portfolio. We see significant growth in these markets. There is a high demand in these markets. 

Georg: 
Grupeer Has decided to stop accepting payments via TransferWise. What is the reason for that? 

Vladislav: 
The reason that we stopped for the use of their service, is that they do not provide us with the information we need to be AML compliant. If you use Revolut or a regular bank transfer, then the banks send information about who you are, your IBAN number, and information about where the funds were sent from. With Transferwise we get the name, surname, and ID. Nothing else. According to the AML procedures, we need to make sure that the funds are actually coming from the legitimate owners and countries with whom we are cooperating. We are placing ourselves as a secure company, so we cannot do business like that. They are good lads, don’t get me wrong, and we like their service. But until this issue is sorted we cannot receive transfers from them when it comes to investors. So the service could come back at a later time. 

3 visits to the Grupeer office and a relaxed lunch

Because of all the questions, I ended up visiting the office three times. After one of the sessions we went out to lunch at a nearby Italian restaurant. I actually really like the relaxed family and team feeling at the office. They have a relaxed attitude, but they are very serious about their business and investors. I really feel that I know them,  and their business model well. 

My own Grupeer statistics - How well diversified am I really?

As I have received a lot of concerns about the missing statistics on the Grupeer website, I decided to do I little extra work for this article to create and share my own statistics, so you can see an example of how the auto invest can diversify. Of course this is very dependant on settings, portfolio size, and the time you started investing. But at least it gives some idea of the diversification. I was very interested in seeing how well the auto invest has diversified my funds. My settings were wide open. All loan types including development projects, all countries, all everything. I made these setting to test it for you, and to protect my own investments as well of course. Here are the statistics I made from my data. You can also see the exact numbers in this Excel document

It actually does not look as bad as I expected. However, The Buvika development project done by Primo Invest in Norway has way more funds than I would have had, if I had invested manually. I like to keep my development projects at 1000 euro or lower per project. I have now disabled development projects in my auto invest, to see if that gives my any cash drag. If it does, I will just invest in the development projects manually for a little while to rebalance. However the split between business loans and development projects is pretty good. Besides, I trust that Grupeer choose good projects for the platform and there is also the buyback. What do you think of it? Please leave a comment below! 

New COO at Grupeer!

As you can see at the start of my article, Vladislav Filimonov has now moved to a higher position at Grupeer with the title of Executive Vice President. Grupeer is in the final stages of going through COO candidates. They have identified one very potential candidate and they probably should have a confirmation at the end of July. As it is quite a significant position, Grupeer is testing all candidates before they officially say who it will be. So stay tuned for more information. 

In summary - I will keep investing with Grupeer

I really enjoy using Grupeer as an investment platform. They may not have the prettiest website, but the powers, knowledge and the people behind Grupeer are their true assets. I will continue to invest with Grupeer and I am really looking forward to an early birthday present from them in the form of a release with statistics and other important improvements to the platforms functionality. 

Do you need help signing up? I have included a step-by-step guide for you!

If you are not yet signed up with Grupeer, click the green button below to go to the detailed step-by-step guide on how to sign-up. It includes many screenshots and a description on how all the functionality works, including setting up the auto invest. If you still have problems signing up or questions to the platform, leave a comment below and I will help you. Get started earning passive income with Grupeer today!

Share the knowledge from this article with your friends and network

I put in about 9 days days of full time work to deliver this quality information to you as an investor, or potential investor. My longest article yet. My vision is that you should feel that you are in the room with me, when I do the interview. I when I first saw some of these interviews online I thought: “I have more questions. I wish I was there to ask them.” I now have that option and I want you to be here with me. Asking questions and getting answers. If you liked the article please share it with your friends who may be interested in this kind of investments or just give it a thumbs up on my facebook page, or just like it. I promise to keep delivering valuable articles to you in the future. It helps to keep me motivated to write more and to get more great interviews for you, where the platforms answers, not just my questions, but yours as well! If this article is missing some information about Grupeer that you would like to have, please leave a comment and I will get an answer for you from Grupeer! I really hope that I helped someone with this article, so please let me know if that is the case. 

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