This is an article that was originally published on Investment Platforms EU.
Barely one and a half years into operations, Max Crowdfund surpasses ten million euros of funds raised through its investment platform. To scale up quickly, the Dutch company recently handed out four million euros worth of shares. Investmentplatforms.eu spoke to Business Development Manager Jan Angel about future plans.
Investment platform Max Crowdfund is the daughter of Max Property Group, which launched real estate funds for English, Dutch and German markets in 2016. The funds were successful but encountered problems: “Starting a fund is expensive and an administrative burden. Recruiting investors takes time too, which is why we started thinking about automating the investment process.”
After a development period of two years, Max Crowdfund was approved by Dutch market authority AFM in July 2020. Because the platform had experience in England and Germany, it received consent for these European markets too. Now, Max Crowdfund has funded more than 40 projects. Three-quarters of these projects are located in England.
The investment platform specializes in short-term real estate projects, where bridge funding is needed. “The projects are mostly buildings that are to be renovated before reselling. Banks are more hesitant to fund these projects. And working with private investors comes with a big administrative load that holds project developers back.”
Max Crowdfund has an interest rate of ten percent. Internationally it is in line with the market, but in the Netherlands, this is considered quite steep. In England a compensation of at least one percent a month is regular, the manager says. And the English real estate market is not as saturated as its Dutch counterpart. Angel says profit margins for real estate entrepreneurs can be between 30 and 40 percent. “If they have to choose between ten percent of financial costs or rejecting a project, the choice is easily made.”
To scale up more quickly, the platform recently raised four million euros in growth capital by handing out shares. But even with 500 active investors, the platform is performing well. On average, an individual investor funds 17 thousand euros through the platform. In addition, Max Crowdfund invests 10 to 20 percent in every project on its platform.
The average investor puts in 17 thousand euros.
Although most projects are from England, the investors on the platform are mainly Dutch. “Without a European license, we can not actively market outside of the Netherlands. Our international investors are from our own network,” says Angel. He expects the long-awaited European license in the third quarter of 2022.
Where other platforms are not necessarily content about further European regulations, director Angel says he is looking forward to it. “We have built our platform with the idea to become a worldwide market player. Therefore we were prepared for opportunities like a secondary market and auto-invest. Abroad it is already common, but here it is illegal until there are European rules.”
We can’t wait to freely move into international markets.
“We can’t wait to freely move into international markets and connect with more investors,” says Angel. With more opportunities to market outside of their home country, the director expects a user base of at least 2 thousand active investors next year. Max Crowdfund wants to end the upcoming year with at least 50 million euros of funds raised.
In preparation for new European licensing, the platform is already busy attracting partners. “Eventually we want to serve all of Europe, but we are starting with Western and Northern Europe because we have the best connections there.”
Angel says the company wants to enter Australia, Canada, the United States and South Africa as well. “Our New-Zealand platform is currently live. In short, we are eyeing all Western and English-speaking countries. And who knows, maybe after that the rest of the world.”