My Visit with Crowdestor

Crowdestor is a peer-to-peer lending platform based in Latvia. This is a description of my experience when I visited the company in January 2019.

Shortly before Christmas I was invited to visit Crowdestor in Riga, where they would tell me about their P2P investing concept and about the projects available through the platform. A trip to Riga is in itself hard to refuse – even when the thermometer showed -10°C. And the fact we were to talk about P2P investing was definitely an extra plus in my book.

A Trip to Riga

The first weekend in January I flew to Riga. There I met with Janis Timma and Gunars Udris from Crowdestor. Two men with an impressive drive.

From the left, Janis and Gunars

Janis and Gunars went to elementary school together. But for years thereafter they were mostly Facebook friends, until they coincidentally discovered that they shared a common passion for P2P lending. This soon lead to a collaboration where they jointly founded Crowdestor.

Not only are they currently managing a growing P2P lending platform, they are also active investors in many other projects in and around Riga.

Janis in particular is very involved with the energy industry, and during our tour around Riga we went to see the district heating plant that he had built. The plant consists of a tall building with a very small footprint, which can supply hot water to around 6,000 households. Unfortunately the project was funded before the launch of Crowdestor, or it could have been an exciting investment opportunity.

District heating plant, Riga
Before you reach for the keyboard: It is primarily steam coming off that tall chimney.

Investing with Crowdestor

There is a variety of investment opportunities at Crowdestor. Many projects are real estate, including acquisitions and modernization of old industrial buildings and conversion to office premises, as well as development and construction projects.

RIga Office Building, Crowdestor
Former industrial building, modernized and converted into offices.

For Janis and Gunars, project funding with Crowdestor is more than “just” a source of revenue. They always invest a minimum of 10% in each project, and they pride themselves on contributing to financing various initiatives by other entrepreneurs.

One project in particular is very near to their hearts: Restaurant The Catch. A Japanese restaurant funded by Crowdestor, which may be Janis’ and Gunars’ greatest pride. Of course we had to have dinner at The Catch so I could experience the place first-hand.

As Japanese cuisine is usually not my favorite food, my expectations were limited. But my scepticism was put to shame. Dinner was a delicious selection of seafoods served as many small dishes. In particular one of the first, and very simple dishes made from fresh tuna with a hint of spicy oil, left a lasting impression.

Should you travel to Riga for business of pleasure, then I highly recommend that you visit The Catch at 12 Antonijas street.

During dinner we got chatting about this, that and whatever came to our minds. I learned a lot about the political and legal system in Latvia. We also had the opportunity to talk a lot about investment opportunities in Western Europe.

Frequently Asked Questions

As a Dane I offered members of the Danish Facebook group, Crowdlending Danmark, an opportunity to ask Crowdestor any questions. This led to some really good discussions and some equally good replies:

Why are there so many P2P lending Platforms in Latvia?

It began with Mintos. Inspired by Mintos’ success, more and more entrepreneurs were encouraged to start new fintech projects. There is a tendency for companies within the same industry to gather in one place, because it enables them to learn from each other. Places like Silicon Valley and Hollywood.

My original assumption was that Latvia has evolved into a significant P2P lending hub primarily due to relaxed legislation. But according to Janis, it is really quite the opposite. Companies like Crowdestor are challenged by the fact that P2P lending is not regulated in Latvia.

One would think that lack of regulation was an advantage for these businesses. But no regulation means that it is extremely difficult to get a license to run a P2p lending platform as authorities do not know how to categorize or register the company.

This is also the reason why many of the platforms are registered abroad – especially in the neighbor to the north, Estonia, where regulation is already in place.

Crowdestor and Buyback

Crowdestor does not offer buyback guarantee . They believe that buyback creates a false sense of security. Anyone can promise to pay back any amount, but what does is that promise worth if the money is not available?

Large platforms with many loan originators will mostly be able to keep their promise, as long as there isn’t an unusually high need for capital.

However, many smaller platforms will find it difficult to buy back loan shares if even one loan is in default. Unfortunately, such platforms do exist, so be sure to investigate before investing in any platform.

However, Janis and Gunars also acknowledge that buyback is an extremely attractive feature for many investors. Therefore, they are working on developing a kind of buyback fund, from which part of the proceeds from other loans will be used to cover losses from any projects that cannot be repaid – as long as there is money in the fund.

What makes the high interest rates possible?

A commonly asked question about P2P lending concerns the high unusually interest rates. How is it possible to make annual returns of well over 10%?

Some of the projects in Crowdestor are high risk. That is, there are projects rejected by the banks. In these cases Janis and Gunars assess whether they think the bank is wrong. So far they have hit bullseye every time, since no loan has yet defaulted. Of course, they do recognize that this track record is not a guarantee for future returns.

Another reason for high interest rates is related to property development projects: After an entrepreneur has found a good piece of land on which he decided to build, he must seek capital. Undeveloped land often has a very low value estimate which can make it difficult to raise money for
land acquisitions and development. Therefore the contractor borrows the money at very high interest rates from individual investors – e.g. via P2P lending – which is wholly or partly used to cover the initial expenses.

Af ther the land has been developed it’s valuation increases significantly, which allows the entrepreneur to acquire low-interest loan in the bank with security in the property. The development process often takes a year, which is why these types of loans often have terms of 12 months.


I can’t be bribed with a guided tour around Riga and good restaurant food (it takes more than that), and the above mentioned is my honest experience. I got an excellent impression of these two gentlemen from Crowdestor. Perhaps in particular because I can identify with their commitment and drive to creating something big and to make an impact in the world.

Always remember to do your own research before inviting your money.