In this post I will outline my review of Crowdestate platform after one year of investing.
It is one of the 5 platforms I chose to invest 1000 EUR in September of 2018.
The short version.
I am not sure if I was greedy or unlucky or combination of both, but I can say that this is the least successful investment out of 5 other platforms I tried.
For now I will not add any more investments in this platform.
More detailed explanation
2 projects 1 mistake
I think my biggest mistake was that I my very first two investments were development projects which were offering great returns and thus came with higher risk.
Currently, deadlines of these projects are postponed and thus the expected return rate is 0% or below that.
To make the matters worse. I did not invest in the initial offering. I bought these in the secondary market because I was too eager to invest and there were no initial offerings at the time.
Total expense for these 2 projects is the following:
Secondary market transactions – 67.5 EUR + 64 EUR = 131.5 EUR
Principal – 200 EUR + 200 EUR = 400 EUR
Total – 531.5 EUR
This is more than a half of my total deposit. Result of this is that in the best scenario I am barely getting my investment back in 30 months.
I will try to sell them with a loss, so I could re-invest somewhere to break even.
The rest of the portfolio is late
There are several other projects currently in my portfolio. Unfortunately, all of them are late.
Each project has its own explanation. Here are the explanations.
Successfully finished investments
To be fair, there are 3 projects which finished on time as expected. All bought in the secondary market, therefore the low average return rate.
Risk rating overview for current projects
Most of my current investment volume is under “not available” and B3 risk rating which is in the middle.
Takeaways from investing in Crowdestate
- Minimum investment is 100 EUR. With 1000 EUR it practically gave me a chance to invest in 9 projects. Diversification possibility was too little.
- Initially, I chose Crowdestate because they offered good yields. Drawback was and is that there is no buyback guarantee. From other platform experience, buyback guarantee puts an extra layer of security towards investor. Here it is not the case. Feels like the investor is on its own.
- Communication about late projects will not be smooth. I wrote several times to support asking for more specific information. They would like to answer as good as they can, but they will not risk misleading with false statements. That ends up with responses – “we will let you know when we know”.
- Crowdestate is for more seasoned investors who can better assess the projects and risks involved. Even though I would like Crowdestate team to assess borrowers more thoroughly I do not think it is feasible. Their assessment on the risk is published for almost every project. It is up to me to decide how much risk I am willing to take.
Good news are that Crowdestate does not have any defaulted projects. This means they were able to settle all of delayed cases.
I am sure I could wait out for payments and learn from my mistakes, however, other 4 platforms (Envestio, Mintos, Fast invest, Twino) seem to be much more forgiving. Not to say that they are without flaws.
For now I will focus on those which give best result or take one of the next in line from the comparison list.