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Crowdestor review 2020

Check out our Crowdestor review, and see if the platform is for you.

Overview of Crowdestor

Risk/Reward

3/5
We find the return compared to the safety alright.

Beginner Friendly

3.5/5
The Crowdestor platform is beginner-friendly.

Investor Protection

2.5/5
Crowdestor has made some safety measures.

Return

5/5
Investors get an average return of 19.11%.

We Like

  • No investment fees
  • High investment returns
  • Detailed loan descriptions
  • Multiple loan types
  • BuyBack Guarantee Fund

We Don’t Like

  • Lack of diversification options
  • Not possible to use auto-invest
  • No secondary market / early exit

Summary: Crowdestor is a fine candidate for a P2P lending platform within the real estate and business segment. Generally speaking, there is a very large return on the platform and the team behind has done its best to secure their investors. However, the platform lacks a bit in terms of diversification possibilities. But with returns in some cases up to 36%, we understand that people choose to use Crowdestor.

It’s completely free to use their platform

Last updated: October 20, 2020

Introduction to our Crowdestor review

Having their first project in 2018, Crowdestor is still a quite new P2P lending platform.

Therefore, we decided to look into how safe investing via Crowdestor really is. The result of our investigations turned into this Crowdestor review.

We strongly advise you to read this review if you have considered investing through the platform but have not yet decided. We will in this Crowdestor review a closer look at the safety of their platform. Furthermore, we will also consider what purpose the platform best serves for you as an investor.

As you read this Crowdestor review, you should be aware that it contains only our own opinion of the platform, and that the information should not be considered as financial advice.

You are of course welcome to read the review from one end to the other, but if you are just looking for something specific, you can use the navigation below to get to a specific point in our Crowdestor review.

Learn about the following in our Crowdestor review:

What is Crowdestor?

Crowdestor is a crowdfunding platform specializing in businesses. 

Their first project was launched in February 2018, and since then a myriad of projects, like the one shown below, has been funded on the platform:

Crowdestor review

On the platform, you can invest in high-yielding business, transport, real estate, and startup projects.

Crowdestor has raised over €42,000,000 with the help of the 17,100 investors on the platform.

With the minimum investment of €50, you can join the platform at https://crowdestor.com/.

How Crowdestor works

Crowdestor is a platform that allows investors to lend money to project owners.

The project owners on the platform benefit from this, as they can get funding for their projects. This gives them a better opportunity to lead their projects into real life.

As an investor, you can in return achieve a pretty solid investment return from this.

There are zero investment fees on the platform, as the fees are paid by the project owners:

Investor costs

The founders of Crowdestor

Crowdestor was founded in 2018 by the co-founders Janis Timma and Gunars Udris:

Crowdestor co-founders

Judging by their LinkedIn accounts the have had some previous experience in the sectors they are focused on with Crowdestor. 

Therefore, they should have some industry insights and know some of the pain points of sectors like the energy sector. This is a good sign.

They work from Crowdestors headquarters in Riga, Latvia, where the daily operations take place. However, the company itself is incorporated in Estonia.

4-star Trustpilot rating

By taking a look at Crowdestor on Trustpilot, it immediately seemed like the company was very popular among the investors. After all, the company had managed to achieve 4 stars:

Crowdestor Trustpilot rating

After taking a closer look at many of the positive ratings, only a few of them seemed without bias. The others were simply posting links to reviews of Crowdestor on their blog and links for them to make money from new investors signing up.

Without the biased comments on Trustpilot, Crowdestor would probably not have such high a rating. 

Despite the many biased comments, we were able to find a chunk of seemingly genuine 4-5-star Trustpilot reviews.

Main features

In the following, we will walk you through some of the main features on the platform, and why they matter for you as an investor.

1. Crowdestor BuyBack Guarantee Fund

In 2019, Crowdestor introduced a new program called “BuyBack Guarantee Fund”. This fund was made in order to safeguard investors against the potential default of the borrowers.

Crowdestor BuyBack Fund

Since March of 2019, Crowdestor has devoted a commission of 1-2% to the fund from all the projects funded on the platform.

In the case that a borrower defaults, investors will be compensated with a proportionate amount of their contributions to the particular project.

As of May 19, 2020, the BuyBack Fund had a size of €360,611.08 (check the current fund size).

What rate of return can you expect?

On Crowdestor, the average annual return is 19.11%.

Investors on Crowdestor are oftentimes investing in just a few individual projects where the return varies greatly from 9% to over 30%. Therefore, the return you will receive from investing via Crowdestor will probably vary from the average return.

If you go for high-return projects alone, your return will obviously be higher than for a more conservative investor.

Since there are generally few, but large projects on Crowdestor, it can sometimes be difficult to diversify properly. Especially when the investments are high risk, you can thus benefit from spreading your risk to other P2P lending sites than just Crowdestor. 

Who can invest via Crowdestor?

In order to be able to invest via Crowdestor you must meet the following requirements:

  • Be at least 18 years old
  • Have an active bank account

If you meet these requirements, simply follow this registration process:

  1. Go to https://crowdestor.com/
  2. Complete the registration process
  3. Wait up to 48 hours for approval of your account
  4. Invest projects on Crowdestor

If you have any questions regarding the registration or wonder if you can invest, you can simply contact Crowdestor with the information found on at the bottom of this page.

It is possible to send funds to your account with TransferWise and bank transfer. But when withdrawing money from the platform, you can only use bank transfer.

Would you like to invest through Crowdestor? Then press the button below to be taken directly to their website. Here you can sign up as an investor:

Is Crowdestor safe to use?

When you invest your money there is always a risk associated with it.

Typically, this risk also follows the return you get. So when your return is high, the risk will typically be correspondingly high. The high return that can be obtained from Crowdestor, will, in general, also be described as high risk.

Are you wondering what specific risks are associated with investing through Crowdestor? In the following part of our Crowdestor review, we take a look at some of the biggest risks you face on the platform. We also take a look at what Crowdestor has done to minimize them.

The main risk

The biggest risk with P2P platforms with high returns is typically the investments themselves.

The same goes for Crowdestor.

If the projects you invest in through Crowdestor end up failing, then you can lose the entire amount you have invested in the given project.

However, you can of course not lose more than what you have actually chosen to invest in a given project.

Investment risk management

In order to minimize the risk that you take as an investor, Crowdestor has also made some additional measures to protect you.

Among other things, they carefully review every possible borrower before they arrive on their platform. Both reputations, financial background, and current commitments are examined.

In addition, the project owner’s business plan, financial reporting, and loan security are evaluated by Crowdestor’s expert team.

However, it doesn’t stop here. Because in every project offered on the platform, Crowdestor takes part as co-financiers and/or co-developers. Therefore their interest is aligned with their investors.

What happens if Crowdestor goes out of business?

A large part of assessing how secure a platform is is looking at the worst-case scenario. In Crowdestor’s case, this will probably be if they go out of business. Therefore, we have also chosen to take a look at what happens if Crowdestor ends up folding.

One of the most important steps Crowdestor has taken to protect you as an investor is by keeping your assets separate from their own.

They do this by keeping your investments in CROWDESTOR SECURITY AGENT OÜ, which is a separate company. So if Crowdestor goes down with the flag, your investments don’t.

Crowdestor alternatives

One of the things we dislike about Crowdestor is the fact that there usually are very few available investment opportunities at a time.

Therefore, it can be difficult for you to diversify your portfolio properly and get a favorable risk diversification. 

By simply using other platforms in combination with Crowdestor, you can easily gain access to more projects and achieve a greater risk diversification.

Whether or not this is necessary depends on the size of your portfolio.

If you want to spread your risk through even more projects in real estate and business niche, you can take a look at other business / real estate focused platforms like Flender and Crowdestate

Alternatively, you can also diversify your investments at Crowdestor with a P2P lending site more focused on consumers. If you are interested in this, you can check out our Mintos review which covers one of the largest P2P lending platforms in detail. Their P2P marketplace makes it possible to invest in multiple loan types, which will help you spread your risk even more.

If you just don’t want to invest via the Crowdestor, you can also use some of these alternatives instead.

Conclusion of our Crowdestor review

Crowdestor is one of the highest yielding business / real estate crowdfunding platforms on the market. This certainly comes with some risk.

But if you are able to sleep tight knowing that you are investing in high-risk projects, Crowdestor might be the platform for you.

You are not totally unprotected on Crowdestor, as the company has created a Buyback guarantee fund that helps protect investors against the default of borrowers. 

Since the introduction of the BuyBack Fund, the fund has kept growing in size, which is a positive sign for investors.

Overall, we believe that there is a decent risk/reward level at Crowdestor.

Would you like to invest via the platform after reading our Crowdestor review? Then you can press the button to be taken directly to their website. Here you can create an investment account and start investing in the projects on their platform. In this way, you can start benefiting from the high yield that can be achieved at Crowdestor: