In Startup Spotlight we zoom in on numerous Estonian start-ups, to find out more about their business model and how they operate. This time we’re featuring the financial technology platform Investly.
Investly launched its peer-to-peer business lending platform in August last year while on the Startup Wise Guys accelerator program. We spoke with the company’s founder and CEO, Siim Maivel, about what they do and how they are helping small businesses.
Siim, are you typical of a driven startup entrepreneur? Why did you create Investly and what are its goals?
Yes, I think you could say I am pretty driven and extremely passionate about Investly. As an economist, I feel that helping small businesses to flourish in turn drives economic growth for the country. While working for a bank I saw first-hand how banks were finding it increasingly difficult to provide finance to SMEs. The frustration these companies felt pushed me to look for a solution and crowdfunding seemed the answer. People with some spare cash in their accounts who are finding it difficult to get a good return can be connected through Investly to lend to SMEs who pay interest on their loan. A win-win situation.
How does your platform work? Specifically, how do you assess the small businesses?
A small business signs up on the platform and uploads some financial history to show the health of its accounts; this and other factors, like their credit score and the director’s background, feed into our credit risk assessment model to ensure the business is sound and has the ability to pay back the money. Their loan offer and profile is then placed into an auction, where lenders can bid. On the other side of the market place, the lenders sign up and can deposit as little as €10, once their identity is approved they can start investing and earning returns from the month after the auction is complete.
Tell me more about your team; I hear they are from around the globe?
When I started, I could never imagine our team would be from so many different countries and would work remotely for months before meeting. I am an Estonian and Vishal Sahu, our CTO, is from India and has bought amazing talent and previous experience of building a crowdfunding platform to Investly. Ruth Chamberlain is from the UK, there they have an established P2P market so it’s great to have that presence. The first time the founders were in the same room was the first day of Wise Guys. We got along from the outset; it is amazing how strong relationships can be built up even remotely when you have a shared goal and values.
What about StartUp Wise Guys? Would you advise other startups to take part in an accelerator programme?
I think it is really difficult to generalise here. For us, Wise Guys gave the opportunity to come together, really focus and validate our platform with customers and mentors. The planning and support in preparation for a funding round has also been invaluable. We really benefited from being on the program but I appreciate an accelerator is not right for everyone.
How do you fund the business?
Initially we received funding from pre-seed investors and then Wise Guys as part of the accelerator programme. More recently, Singaporean-Estonian entrepreneur Sonny Aswani invested in the company and a funding round is the next step.
What is the most valuable lesson you have learned from the experience of starting up?
I think the main things I have learned are to do with fundraising. It is one of the most time-consuming processes so it is vital to decide (beside the investment) what elements are important to you. For example, how involved do you want the investors to be? What is their culture and ambitions? It is really important to trust your intuition about the connection and relationship you have with the investor too. It’s a long process and so much better if you are dealing with someone on the same wavelength as you.
What pieces of advice could you give to aspiring entrepreneurs out there looking to start their business?
Starting your own business can be a rollercoaster but it’s worth it for the valuable opportunity to learn. Hands-on experience that is hard to get doing anything else!
I think one of the most important areas to focus on is customer validation. This is key when building your product but I have found it so useful throughout the last few months. Every sales conversation, conference or networking event where you can meet and chat to your current or potential customer is a great opportunity to get feedback that can help shape the business.
Where do you see your business in five years’ time?
Investly’s ambition is to launch into new markets over the next five years, so I am excited to think how many small business we will have helped grow in that time. With the support of lenders from around the globe, we aim to really make a difference.
Cover: Investly team – Siim Maivel, Ruth Chamberlain, Vishal Sahu.