Crowdpear Review 2023: Successful PeerBerry Spin-Off?

Crowdpear is a PeerBerry spin-off, which started its lending operations at the beginning of 2023. On the platform, investors have access to senior secured real estate loans with an average interest rate of 10.62%. As a regulated platform, Crowdpear offers its investors, in contrast to PeerBerry, a much safer legal and regulatory framework for an investment. 

This Crowdpear review will reveal if the platform is worth your time and money. All the information that are covered in this Crowdpear review are based on my own research on the platform. Please make sure to do your own due diligence before investing on this or any other platform. More information can be found in the Disclaimer.

Further analyses of other platforms can be found on my P2P Platform Review page.

Last Update: May 2023

Crowdpear Overview

Before we get started, here is a quick summary with the most important information about Crowdpear.

About Crowdpear

Crowdpear is a Lithuanian-based crowdfunding platform where investors can invest in mortgage-backed real estate loans from Lithuania and earn an average return of 10.6%.

The platform has been regulated and supervised by the Central Bank of Lithuania since its inception. In combination with the legally prescribed separation of investor and company funds, the safety on Crowdpear is higher than on comparable alternatives abroad.

The platform was founded in August 2021, but the planned launch was postponed due to the war in Ukraine. In October 2022, the platform was activated for the first registrations. The first loans were offered at the beginning of 2023.

The Origin Story

Crowdpear is a spin-off from PeerBerry. This is proven by the fact that two of the three shareholders are also shareholders at PeerBerry and there is also a very strong overlap in terms of team members.

The spin-off was founded primarily because PeerBerry and Crowdpear pursue different business models that are assessed differently from a regulatory point of view. Combining the two platforms under one roof would therefore not be possible.

For the marketplace model practised by PeerBerry, in which short-term consumer loans are offered by external lenders, there is yet no regulation at EU level (PeerBerry had rejected a possible regulation in Latvia). On the other hand, crowdfunding regulation exists for platforms such as Crowdpear, where investments are primarily made in secured real estate loans and business loans.

For this reason, the decision was made to set-up a regulated platform with Crowdpear.

Who owns Crowdpear?

Crowdpear has three shareholders, whose shares are divided as follows:

• Vytautas Stražnickas (50%)
• Vytautas Olšauskas (25%)
• Ivan Butov (25%)

Vytautas Olšauskas (25%) and Ivan Butov (25%) are two shareholders who are also registered as owners at PeerBerry with the same shares.

Vytautas Stražnickas (50%), on the other hand, is a manager at one of the oldest printing companies in Lithuania, where he has been active for 25+ years – Garsu Pasaulis. Vytautas also holds one of the leading positions at the Aventus Group in Poland.

Crowdpear Management

The CEO of the Crowdpear platform is the Lithuanian Vytautas Olšauskas. He is also a member of the board at Mano Bank, which he co-founded. This is why his influence on Crowdpear is more of a strategic nature and less in day-to-day operations.

Arūnas Lekavičius, who should be known to many investors for years as PeerBerry CEO (since January 2019), acts as the external representative.

On the Crowdpear website, investors can find more information about the platform’s team members. It is striking that there is a lot of overlap with the PeerBerry team. Among them is Rita Simanavičiūtė, who is responsible for marketing and PR.

Business Model & Finances

Throughout the process of due diligence, investors should also have a look at the business model of a P2P platform as well as the overall financial situation. How does the company earn money? Does the platform operate profitably? And how well is the company positioned financially? In the following paragraphs of this Crowdpear review, you can follow-up on those questions.

How does Crowdpear earn money?

Crowdpear monetises itself primarily through a brokerage fee, which is charged to borrowers upon successful project financing. This can be between 2% and 5% of the financed loan amount.

Other sources of income include administrative fees, penalty fees or early termination fees. For investors, on the other hand, investing on Crowdpear is free of charge. A detailed overview of the fees charged can be found in this price list.

Is Crowdpear profitable?

Since Crowdpear only financed its first projects at the beginning of 2023, the platform is still far from reaching a profitable level. In order to reach the break-even point, the platform – according to its own information – would have to achieve an outstanding portfolio of around €12 M in order to cover the current cost structure.

This goal is planned to be reached by the end of 2023. However, it has been emphasised that the quality of the loan portfolio is more important than the short-term goal of profitability.

Sign Up and Bonus

In order to invest on Crowdpear, investors must meet two requirements: A minimum age of 18 years and a residence in the European Union or the European Economic Area.

Overall, the registration process is relatively simple and intuitive. After opening the account via email, the KYC (Know-Your-Customer) and AML (Anti-Money-Laundering) questionnaires must be completed. This is followed by the verification of identity and the declaration of tax domicile.

Also legal entities have the opportunity to register on Crowdpear.

Bonus for New Investors

If you sign up for Crowdpear using this link, you will receive a 1% cashback on all investments made in the first 90 days after registration.

Investing on Crowdpear

How does Crowdpear work and what should investors know and consider when investing on the plaform? In the following sections of my Profitus review you will find all the necessary information that you need.

The Loan Offering

Crowdpear offers investments in secured real estate loans from Lithuania on its platform. Due to low supply, there is currently no Auto Invest function. Instead, projects have to be selected manually. A second borrower country, Spain, is to be added in the foreseeable future.

The minimum investment amount on Crowdpear is €100.

A special feature of Crowdpear is that interest is calculated from the first day of the investment. On other crowdfunding platforms, the payment is usually made at the end of the loan term.

It is also important to note that Crowdpear acts as an intermediary between the borrowers and the investors. This means that the loan agreements are concluded with the borrower and not with the platform. So if Crowdpear had to file for insolvency, the claims would still exist.

Costs and Fees

There are no costs or hidden fees for investors on Crowdpear. Both deposits and withdrawals are free, as is investing on the platform itself.

Expected Returns on Crowdpear

The interest rate on Crowdpear is stated to be up to 15%. The average expected return, according to previous loan projects, is 10.62%. Compared to other crowdfunding platforms that can offer a similarly high level of security, this is considered a competitive return.

Crowdpear Forum

If you have questions about Crowdpear, other platforms or different p2p-related topics, you can join the re:think P2P Community on Facebook and engage in discussions with more than 1,000 other private retail investors.

Crowdpear Taxes

Generally, interest income generated through loan financing is considered capital income and thus must be declared as such in the tax return.

As a Lithuania-based P2P platform, Crowdpear is legally obliged to withhold tax – at a rate of 15% – on interest income earned. This is automatically withheld by the platform. Investors can reduce the withholding tax to 10% by filling out a “DAS-1 form” and sending it to the platform.

As there is a double taxation agreement between Lithuania and most European countries, the withholding tax can be offset. This means that it is not paid twice.

Investors can also download a corresponding document for the tax return via the dashboard at the “Statements” section.

Crowdpear Risks

When evaluating a P2P platform, investors should look very carefully at the possible risk factors and weigh them up before making an investment. What do you have to look out for at Crowdpear? Where are the risks and how should they be assessed?

The platform itself offers an initial overview. In this document, Crowdpear lists a number of possible risks, including default risks or recovery difficulties.

Risk Assessment

The loans offered on Crowdpear are 100% secured by first-rank mortgages. In case of payment difficulties or defaults, the sale should lead to a corresponding protection of the investment. According to its own information, the platform only finances loans at a loan-to-value (LTV) of up to 80%.

To minimise the risk of loan defaults, Crowdpear follows a set of regulatory requirements that dictate how risks associated with loan projects must be assessed. This includes that the platform only works with real estate appraisers officially approved by the regulatory authority in the context of real estate appraisals.

In addition, the property valuations are checked by internal risk managers. For this purpose, Crowdpear obtains a range of data and information from public registers and databases to check the borrower’s history, creditworthiness, or reputation.

Once all the necessary documentation has been gathered and all the data has been verified, Crowdpear’s internal credit committee makes a final decision on the financing of the project.

Is Crowdpear a Safe P2P Plattform?

In general, Crowdpear can be considered as a safe P2P platform.

• Regulation and supervision by the Central Bank of Lithuania
• Separation of investor and company funds
• Proven good performance of real estate projects via PeerBerry (0 defaults)

Pros & Cons

In this section I have listed the most important advantages and disadvantages of Crowdpear.

Advantages

• Regulation: Crowdpear is controlled and supervised by the Central Bank of Lithuania.
• Custody of Investor Funds: Legally monitored account segregation of investor and company funds.
• Experienced Team: A large part of the PeerBerry team is involved in building and developing the platform.
• Attractive Risk-Reward Profile: The expected returns are very competitive for the risk profile.

Disadvantages

• Small Offer: Crowdpear is still at the very beginning and thus only offers small amount of new loans.
• Low Diversification: So far, investors can only invest in Lithuanian loans.
• Liquidity: So far, there is neither a secondary market nor short-term loans available.
• Withholding Taxes: Withholding taxes of 15% or 10% are withheld from private investors.

Crowdpear Alternatives

Due to its business model, the currently closest Crowdpear alternative would be Profitus. Also this platform offers primarily Lithuanian and property-secured business loans. Other direct competitors in Lithuania include Letsinvest, Nordstreet and InRento.

You can find other Crowdpear alternatives on the P2P Platform Comparison page.

Why not choosing PeerBerry?

Crowdpear is a spin-off from PeerBerry. This means that there is a high degree of overlap between the two platforms, which is why additional diversification should be questioned. Is it worth investing on Crowdpear as well as on PeerBerry? I think: Yes!

1. In contrast to PeerBerry, Crowdpear is a regulated P2P platform with a significantly higher level of security.
2. The primary lending segment is a completely different field with secured real estate loans.
3. The real estate projects on PeerBerry so far (38 loans worth €27 M) have shown a good performance so far (0 defaults after 5 years).

Summary Crowdpear Review 2023

Crowdpear is still a young P2P platform, but it has the best prerequisites for long-term success: a regulated environment, competitive interest rates and an experienced team in the background that has already carried out successful projects in this lending segment in the past.

With regards to the small supply of loans, investors should be patient and start with a smaller amount for the time being. From my point of view, there are few significant reasons why one should not start with Crowdpear yet, which is why I will also aim for a personal investment.

FAQ Crowdpear Review