Interview Series #2: Interview with P2P Platform Wisefund

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As an investor, I want to get to know the platforms I’m putting my money in. One way to do this, is to interview the CEO of a platform and that is exactly what I’m going to do in my new interview series. Here is my interview with a new platform called Wisefund.

This posts may contain affiliate links. You can read my full disclosure here.

Interview Series Wisefund

Introduction to Wisefund

Wisefund started a couple of months ago with their platform. They offer loans from small and medium sized businesses in Europe who seek to expand their business activities. They offer attractive interest rates and a buyback guarantee.

In August I decided to transfer a small amount of money to see for myself how their platform performs. And I reached out to Wisefund and they were willing to answer my questions. They answered everything and I’m allowed to share the answers on my blog so you can all learn more about Wisefund.

I’m going to write a review about Wisefund soon, but first I want to build up some experience with their platform to be able to write a useful review.

Do you want to check out Wisefund for yourself? Each investor who signs up with this link gets 0.5% cashback on all investments made during the first 270 days.

The questions

1: Can you tell something about yourself / what is your education and experience in the P2P industry?

Company owner and the person behind the business, Olga – she has a vast experience in financial analysis and investment portfolio management.

She delivers her experience in the important tasks of the company and platform, oversees the general development and has the final decision on changes presented by the CEO.

Rinalds, CEO – experienced business development executive with Business Psychology from RISEBAA higher education institute which is backed by years of experience in real estate business management.

He’s been exclusive RE/MAX group representative in Baltics for years now, and to Wisefund he brings the power of managing team’s work and presenting the development task toward the shareholder.

Ingus, CMO – educated in BA School of Business and Finance, with work background as legal advisor for the notary, as well as managing the purchase and growth execution of an international SaaS business.

Experience allows him to work on Wisefund platform development online tasks, growth planning and execution of important tasks approved by the top management.

2: When and why did you start Wisefund?

Company was founded in 2019. To be exact, March of 2019. But the idea was there for couple of years already in the mind of each of the team members.

We saw how Mintos and Crowdestate grew, not even mentioning Funding Circle, October and Linked Finance. They all have different approach and eventually they grew into great companies.

Together our team somehow came to an idea to found the company, with Olga as the leader and funder of the project, Rinalds with background in commercial partnerships and real estate development, and Ingus, with experience in online platform operations and legal activities.

What we were missing was a technical development and professional legal assistance. Once those parts were covered, we could start talks with businesses looking for loans and go live with the platform for the crowd.

The main idea always stays to create a trusted funding partner for growing businesses. Our belief is that businesses create added value which allows the economy and overall prosperity of people to grow.

3: What is the key element in your platform that makes your platform excel?

First of all, those are Loans listed. The portfolio is diversified across Europe, and as lenders come from all of the countries in Europe, many will be more interested lending and supporting their own country businesses.

The transparency of who is lending and for what purpose is a must that the platform is presenting on each loan opportunity.

What we have different is the guarantee and protection of lenders.

We don’t just promise the buy back from funds we don’t have or couldn’t have. We have a backer with carefully drafted (by professional commercial lawyer’s) buy back guarantee agreement – legal back up which constitutes for maximum safety.

We acquire funding for businesses from the crowd, but we do everything to protect the funds. Also each borrower goes through thorough due diligence process before the loan is presented to lenders.

4: How does your platform differentiate from all the other platforms?

Well, this is probably mentioned above. We present loan opportunities from across the Europe, from various business ventures, allowing lenders to diversify their investments.

5: How many employees does Wisefund currently employ? How many experience do they have in this industry?

Currently, we’re six people, just as the About us page shows. There is owner, CEO, marketing and platform operations, customer support, tech guy and partnerships manager on the borrower side.

6: How many registered investors do you currently have on the platform?

455 registered users as of August 23

7: How is the platform regulated?

Platform operations are based from Estonia. Wisefund has introduced its business model and legal setup to Estonian Financial Supervisory Authority and has received a confirmation that the current setup does not require the authorization from the FSA supervision.

Considering the rapid growth of crowdfunding industry, there may be introduced regulation and licensing in near future.

8: What are the main advantages for borrowers?

Borrowers can expect quick due diligence and approval process. And depending on the activity of investors, rather quick financing. And they can obtain loan without securing it by real estate which usually banks ask.

9: What are the main advantages for investors?

For investors this is high return portfolio they can invest in, and for sure, short term of the loans is a big advantage. The additional security of buy-back guarantee is also a big advantage for the lenders.

10: What return can investors gain on your platform?

With current listed loans the interest is above 18% annually. Wisefund works to deliver loans who will pay 20%+ interest rates in the near future.

11: Are you planning to add an auto-invest feature in the future?

It’s possible, and we’ve thought about that. But there’s no need for it yet, at the beginning of the operations.

We’ll integrate it once loans start meeting their targets quick enough, and there are requests for this feature from investors.

12: Are you planning to add a secondary market in the future?

Yes, certainly.

Once the platform operations expand, we’re looking to introduce secondary market so the investors can benefit in short term or would not have to choose to exit with a fee if such a need appears

13: How do you pick which projects are good enough for the platform?

Wisefund strives to diversify its portfolio of listed loans. Professional lawyer takes care of the risk analysis and provides us with final suggestion on each loan request. Of course, there are many things considered in the approach.

The analysis for each industry and amount of the loan is taken individually. Good background on the activity of the company, funding project behind the loan request, history and background of the management – those are just a few factors we look at.

14: Where do you see the platform in 5 years?

Well, this is many years to look at. Certainly, we’re looking to become a place where businesses can find assistance from the crowd.

There are some very good success stories on the market, like Linked Finance. Recently, they achieved 100M milestone, and they’ve been backing Irish businesses for quite some time.

Wisefund hopes to match their success within this time scope.

15: What happens if a project fails / defaults?

Borrowers who have defaulted will be pursued with debt collection.

But for the safety of our investors, we’ve entered into an agreement with a third party investor who guarantees to buy out any loan that is late for more than 60 days at the rate of remaining principal, and will pursue debt recovery actions themselves.

The investor bears no responsibility on defaulted loans which are covered by the buy-back guarantee. The borrower will have to meet all the costs, as investors aren’t liable for any additional expenses.

Currently all loan opportunities listed are covered by the buy-back guarantee.

16: How does your buyback guarantee work?

Guarantee provider and Lender/Investor signs (all done on the platform) an assignment agreement. Lender sub-account is credited with the principal, and Guarantee provider receives full claim of the loan and further on deals with the borrower without the involvement of the Lender.

Wisefund protection fund covers the interest rate accrued for late/defaulted loans.

17: Is there enough liquidity to pay the buyback guarantee to all investors if one or more large projects fail at the same time?

Current buy-back guarantee agreement covers maximum of 250’000 EUR principal buy-out. This is backed by the agreement mentioned before.

Wisefund is working with guarantee provider to increase the limit as more borrower’s will be listed. If requested, Wisefund can present a letter of assurance from the guarantee provider.

18: What happens to investors’ money if the platform goes out of business?

Investor’s money is held separately from platform operator business. If any claims ever arise to the platform, none of investors money is under risk.

Additionally, platform business plat is made in the way that we’ll be keeping as little investor money as possible – either invested into loans and transferred to the borrowers or withdrawn to investor bank account.

Still standing money possess no interest for the investors, and is a burden on platform’s shoulders.

19: Does Wisefund also invest in the projects?

No, Wisefund is a platform, and our income generates from fully funded loans.

Do you want to check out Wisefund for yourself? Each investor who signs up with this link gets 0.5% cashback on all investments made during the first 270 days.

Conclusion

So far the platforms looks good to me. They answer fast to questions and their platform is easy to navigate and everything is very clear. I can’t say anything yet about the performance as I just started investing in them last month.

I hope you learned more about the platform through this interview with Wisefund and got excited! Check back soon for my review on Wisefund.

Do you have more questions about Wisefund?
Let me know, so I can ask them for you.

Which platform do you like me to interview next?
I’m planning to do interviews on a lot of platforms to give you a great overview of them, so you can make a good choice where to put your money.

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