EvenFi has announced the launch of several new features for investors and businesses. Along with new options to generate returns in an automated manner, such as Auto Invest and automated deposits, there are also many new features regarding the types of investments currently available on the platform.
To update users on the evolution of our core business we decided to ask a few questions to Federico Shaw (CFO) and Giuseppe Scapola (Head of Business) of EvenFi.
Up to now the aim of EvenFi has been to make more accessible the financial channel for those productive realities that in most of Europe contribute more to create work and to grow the economy of the territory: Startups and Small and Medium Enterprises. Will the platform's core business remain the same or will it evolve? If so, what novelties will contribute to the enlargement of the market to which the platform has always aimed?
EvenFi's goal is to fund the real economy while generating diversified investment products for investors. We started by financing Small and Medium Enterprises and continued with bridge loans for Startups.
Later we introduced dynamic loans for Ecommerce platforms and finally we launched Venture Debt for Startups that are in a growth phase. Our continuous evolution depends on the fact that we are always looking for new products that support the real economy and allow investors to diversify their investments and generate a double return: economic and social.
The new product we are launching is financing for real estate projects. These are labor-intensive projects, and therefore with a good social impact, and capable of generating, at the same time, good returns.
Not all investors currently enrolled on EvenFi's platform are familiar with real estate related project types. Can you explain more about what this is and what might be the players and forces involved in such projects?
Real estate financing is essentially used to develop real estate projects, for example the purchase of a property in order to renovate it and then sell or rent it.
For this type of project we have chosen to introduce new types of financing: the "Full Bullet" or "Bullet" repayments with periodic payment of interest.
In fact, since real estate projects receive cash flows only when the properties are sold or start being rented, the periods in which interest or principal is paid cannot be monthly as in typical EvenFi loans. The entities involved will then pay the scheduled interest every 6 months or at the end of the project duration, along with the repayment of the principal.
We see several advantages to financing this type of project: a) they are generally intensive on employment, b) they help improve the supply of real estate so that the increase in prices is contained, c) they generate good returns for the investor, and d) the borrower is the owner of the property.
Many investors may be wondering what prompted EvenFi to introduce such products into its offering. Why real estate? And more importantly: with what expectations?
Real estate is the largest global asset class in existence. It was worth $218 trillion in 2016, more than twice the number for bonds and three times the amount for stocks.
We could not have ignored this data, because it would have meant not allowing our investors to access this type of investment and diversifying their portfolio. Obviously, we must always bear in mind that while this asset offers excellent returns and generates a good social impact, it also carries risks, as do all the assets sold on the platform.
However, as our investors know, these are risks that can be mitigated with the right measures. In this regard, let's say right away that the first projects that will be published on the platform will have been realized in partnership with industry professionals who make this type of business their primary activity.
To the question "Why real estate?" To the question "Why real estate?" We answer that it is one more product you can use to diversify your investments.
What will EvenFi's first real estate project consist of?
Generally speaking it will be renovating, and real estate trading operations, but also, in some cases, operations such as the transfer of not fully funded acquisitions that allow the developer to perform real estate operations with less capital and very important results.
One last question. EvenFi's slogan is "Fintech for the real economy." Do you believe that even projects with a focus on real estate can help support and grow the real economy? If so, to what extent?
Definitely, as we said before, we believe that they have mainly two positive impacts: a) they are labor-intensive projects, in the sense that they employ a lot of specialized resources in the execution of the necessary works; b) they generate more supply in the market, thus reducing price pressure (the more financing developers get, the more supply there will be and the less prices can go up).