How new FinTech startups want to revolutionise financial services
These are tumultuous times for the financial services sector, with significance of the bank as an economic hub decreasing. Advances in technology are enabling innovative start ups to enter the finance sector. Young FinTech enterprises in Switzerland are increasingly turning to crowdinvesting.
CreditGate24 is the market leader in Switzerland for bringing together private parties to lend credit to SMEs and individuals, or “peer to peer lending”. Currently, credit is still predominantly being applied for at the bank, whose profit margins are substantial. At CreditGate24, credit is financed directly from private and institutional investors. A single investor does not finance the whole sum of the credit being sought, but a part of it. CreditGate24 allows investors to gain a competitive rate of return without the cluster risks. CEO & Founder, Christoph M. Mueller, states upon request that CreditGate24 has enabled the financing of over 200 credit projects since its launch in March 2015, of which none, so far, have led to any losses.
Meanwhile, the founders of houseinvest are close to launching their crowdinvesting platform for the Swiss property market, where investors can take part in financing profitable property projects with investment capital starting at 20,000 Swiss Francs. Co-Founder, Peter Eichenberger, explains that his goal with houseinvest is to modernise the market for investment properties. Houseinvest is is making property investment accessible to the general public through crowdinvesting.
Independent property specialists review and approve a property project before it is included on the web-platform and made available for investment participation. Once a project is successfully financed, investors will receive a percentage of the rent distribution annually. Peter Eichenberger sees the advantages of houseinvest not only in attractive equity returns but also in a historically more stable performance of property investment in comparison to stocks and shares.
Companisto is committed to financing startups through the crowd and is, according to Managing Director David Rhotert, the market leader in this discipline in the german speaking area. Startups often need external capital to implement their business ideas. This venture capital nowadays typically comes from angel investors, incubators and specialised large-scale investors. The general public was however until now excluded from financially participating in anything other than stock exchange listed enterprises. Companisto wants to change this utilising the crowdinvesting approach. An investor can invest only a few Francs in a startup, but it is the sum of several investments from “the crowd” that effectively fund the ventures. Investors participate with interest rates and performance-based bonus interests.