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Crowdestor Review: What You Need to Know in 2022

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Usability: 10/10
Risks and Returns: 8/10
Liquidity: 9/10
Customer Support: 8/10
Investment Opportunities: 7/10

Updated: September, 6, 2022

Pros

  • High potential ROI
  • No investment fees
  • BuyBack Guarantee fund
  • Transparency
  • Secondary market
  • Securities
  • Cons

  • No auto-invest feature
  • High risk
  • No live chat
  • Crowdestor is a relatively new peer-to-peer crowdfunding platform that connects investors with businesses that seek funding.

    With a combined ROI (return of investment) of €32.1 million (around £27.5 million) on all investments, Crowdestor looks like a promising place to earn double-digit returns.

    But, is it the right platform for you?

    You can find everything you need to know about the platform in our Crowdestor review.

    Read on!

    What is Crowdestor?

    Crowdestor is an online crowdfunding peer-to-peer platform that allows investors to invest in potentially high-yielding business and real estate projects, as well as in start-ups, all while helping businesses in need of funding.

    Did you know that 40% of crowdfunding are business focused and only 20% are raised for social causes? For more crowdfunding stats and facts, take a look at this article.

    Although this platform is relatively new (Crowdestor was founded in 2018), it has gained massive popularity among investors, mainly due to its very appealing interest rates of 12%- 28%

    If you would like to try a more established platform, you could take a look at Zopa, one of the oldest P2P platforms in the UK.

    Crowdestor currently has over 25,000 investors and has managed to raise over €56.8 million (£48.75 million) so far.

    The loan term for all projects on the website ranges between 2 and 24 months and the average annual return is 19.47%.

    The best part about Crowdestor is its dedication to transparency. The company makes an effort to provide all information necessary to both investors and borrowers so they can make an informed decision. 

    The company lets investors lend funds to projects instead of loans, unlike Grupeer that allows users to invest in real-estate development projects and business loans. 

    Per its statistics, the platform has 127 current projects, 157 delayed projects, and 59 in recovery which means that most of its projects are not following their expected schedule.

    How Crowdestor Works

    The Crowdestor platform is pretty simple and easy to use.

    Businesses that need funds to start, operate, or grow can apply on the website to raise funds directly from investors, without having to go through lenders, banks, and other intermediaries.

    Crowdestor’s expert team will analyse and evaluate the borrower’s business plan, financial reporting, and ability to pay the loan back. If their loan request is approved, they will publish the project on the website with a detailed description so investors can start investing in it. 

    Those who want to invest on the platform can browse the long list of projects on Crowdestor’s website. Each project features the location, interest rate, term, and type of property.

    Crowdestor does not charge fees for investing on the platform.

    Not certain that Crowestor is the one for you? Here are a few alternatives to take a look at:

    New user requirements

    To invest in projects on Crowdestor, you need to:

    • Be at least 18 years old
    • Have a bank account in a credit institution in the European Union or the European Economic Area

    If you meet the requirements, you can proceed to create an account with the platform. You’ll need an ID or any other form of identification and will have to invest at least €50 in any of the active projects on Crowdester.

    Types of Loans

    There are two types of loans available on the website, including: 

    Business loans

    On Crowdestor, there are plenty of business projects to invest in, such as small and medium enterprises, and real estate projects, among others. Crowdestor displays the type for every project to allow investors to put their money in an industry they are familiar with.

    Crowdestor Flex

    Crowdestor Flex is a simpler investor product that allows users to invest passively or save up for a specific goal. Investors can withdraw their funds at any time (though they’ll have to pay €1 for every transaction) and adjust their monthly payments at any time.

    Not only is it easy to use, making it perfect for beginners, but it also offers a portfolio of businesses that have a good track and is backed up by a liquidity reserve of 10-20% of invested funds.

    Investment Opportunities

    There are three main project types you can invest in via Crowdestor:

    SME (Small and Medium Enterprise) projects 

    Investors can invest in short-term business loans to small and medium enterprises and earn money when the market grows as a whole. 

    SMEs in the UK reported a combined turnover of over £2.28 trillion in 2020, so it’s safe to say that this is a profitable option.

    Specialised projects

    Crowdestor also has projects from industries like show businesses, forestry, and gaming among other things, that come with additional success rates, higher interest rates, guarantees, profit-sharing options, copyrights, and intellectual property. 

    Crowdestor statistics show that 80% of their total raised capital is for this type of project.

    Real estate projects

    Conservative investors that prefer a low-risk steady-return approach, can invest in real estate on the platform.

    Worth noting: The platform will calculate and provide a credit risk assessment for each project to help investors make a decision.

    Main Features

    Usability

    Crowdestor has a beginner-friendly interface. It shows all numbers and information on the dashboard and makes it easy to track your performance, find investment opportunities, or  check a project’s success rate.

    Liquidity

    Crowdestor was on the receiving end of criticism for some time for not having an early exit option, which affected the investors’ liquidity. The company eventually addressed investors’ complaints by adding a Secondary Market. For now, the platform reserves 10% to 20% to pay out the withdrawals.

    Secondary market

    The Crowdestor Secondary Market gives investors an opportunity to make an early exit from their investments by selling them at a discount or a premium before their maturity date.

    Those who sell a loan on the secondary market on Crodestor are charged a flat fee of 2%. The buyers’ commission, on the other hand, depends on the discount of the loan – if the discount is under 10%, there is no fee. 

    BuyBack Guarantee Fund 

    The BuyBack Guarantee Fund ensures that investors receive compensation for the funds they invested in a project if that project defaults. The money would come from a fund that collects 0.5%-1% commission from every funded project.

    The Crowdestor Provision Fund, on the other hand, covers late payment fees, expenses related to legal enforcement, and capital loss.

    Peerberry, LenderMarket and Ratesetter have similar security policies in place.

    Referral code

    Investors can earn a 1% Crowdestor bonus by inviting friends to join the platform. The person invited will need to use the existing user’s referral code when registering on the website.

    Once that’s done, the new user will get a sign-up bonus and the existing user will get a 1% Crowdestor cashback on all investments the new user will make during the first 90 days on the platform.

    Risk and returns

    Crowdestor is a high-risk high-return website – investors can earn up to 28 % p.a  For now, the biggest risk on the site (when investing) is the possibility that the project may default.

    Other aspects that can affect your capital include market risk, legal risk, and liquidity risk, so it’s vital that you take all of these into account before investing. Luckily in the UK, people are still skittish when it comes to investing—66% are reluctant to risk their money, which makes it more likely that they will exercise due diligence before investing. 

    Is Crowdestor Safe to Use?

    Investing in a P2P platform that offers high returns certainly comes with high risks. In addition to protecting Crowdestor investments, the company also makes sure that all the necessary data is safe and secure. 

    Crowdestor keeps its infrastructure on separate virtual machines, regularly duplicates data, and creates backups. It also uses encrypted passwords, maintains a strong firewall to keep data and codes safe, and only supports HTTPS connections.

    Crowdestor’s Customer Support

    Both investors and borrowers can reach Crowestor’s customer support team from Monday through Friday via:

    The site also has a blog, a FAQ page, and accounts on popular social media platforms like Facebook and Twitter, where customers may find what they’re looking for.

    Crowdestor reviews say that the customer support team is quick to respond and knowledgeable, however, plenty of them noted that the site lacks a live chat feature.

    Bottom Line

    Crowdestor is a great P2P platform where investors can find good deals and earn excellent returns on their investments. The site has a high-risk high-reward approach but it takes steps to minimise the risks for investors, including through a BuyBack Guarantee fund and a secondary market.

    FAQ

    How is my investment secured on Crowdestor?

    Most projects are covered by a provision fund, but there are other securities (depending on the type of investment), such as the borrower’s guarantees or business collateral.

    Is Crowdestor good for diversification?

    Crowdestor gives investors the opportunity to earn excellent ROI, but it has few active investment projects (at publishing time). If you are interested in diversification, take a look at some of the best investment apps available right now.

    What’s the minimum investment amount on Crowdestor?

    The minimum investment amount on Crowdestor is 50€ per project.

    Is there a buyback guarantee on Crowdestor?

    Crowdestor has a Buyback Fund which helps mitigate the risk of investing in projects. If a project goes to default, investors will receive compensation from that fund.

    How much money will I make with Crowdestor?

    Based on our Crowdestor review, you can earn up to 28 % APR (annual percentage rate).

    My name is Marija, and I'm a financial writer at DontDisappointMe. Although finance might not be everyone's cup of tea, my 10+ years of working in one of the biggest banks in my country, and my interest in extensive research on everything finance/investment-related, have made me somewhat of an expert in the field (if I do say so myself). No longer having the passion to work in a corporate setting, I decided that I couldn't let all of this knowledge go to waste so I started writing. And, here I am! Today I try to share my knowledge with my audience in the hopes of making this topic as simple and interesting as possible. In my leisure time, I like spending time with my family and travelling to new locations.