EIF backs lending marketplace Estateguru in launching a new credit fund

Estateguru, a pioneer in online financing for SMEs (small and medium-sized enterprises) in Europe, is preparing to launch a diversified credit fund for institutional investors.The European Investment Fund (EIF) has committed to being a cornerstone investor, using resources from the European Guarantee Fund that was set up to ensure that European small and medium businesses have sufficient financing available to mitigate the economic impact of the COVID-19 crisis and are able to continue their growth and development.

The Estateguru Senior Secured Credit Fund will provide SMEs in Europe with senior financing originated via the Estateguru online lending platform. The fund’s geographical focus will be mainly on Estonia, Latvia, Lithuania, Finland and Germany. The fund is a closed-ended (7+1 year) private debt fund available for qualified investors that seek exposure to this asset class. The fund’s first close is expected around the end of the second quarter of 2022

Estateguru was launched in 2014 as a platform facilitating property-backed loans for SMEs on a large scale. To date, more than 3 300 loans have been originated by the platform for a total amount of €530 million.

“With the fund we are creating an attractive opportunity for institutional investors. It will give them access to the underserved European SME property-lending market estimated at €400 billion. Digital lending platforms like Estateguru are able to serve this market more effectively than traditional lenders and gain market share rapidly, while also offering a good return for senior secured risk to investors,” said Judith Tan, Head of Capital Markets at Estateguru.

European Investment Fund Chief Executive Alain Godard said: “With the backing of the pan-European Guarantee Fund, we are delighted to support Estateguru, a fast-growing marketplace lender that aims to provide quick and flexible financing to companies in the Baltics, Finland and Germany. The small size of target companies means that the loan amounts are small too, so SMEs have limited appeal for traditional banks and are in need of alternative sources of finance. Supporting them is key to overcoming the ongoing crisis caused by the pandemic.”