Newly-born Estonian fintech platform Bondkick aims to take crowdfunding to the corporate bond market.
Bonds as an investment instrument is generally much less known than shares, but compared to equity, there are 5-10 times more bonds issued each month for example on the US market.
Bondkick launched in April this year and at the moment one can invest in a bond of plastic component supplier Basco Baltic, which seeks up to 51,300 euros, offering 11 percent yield.
Valentin Ivanov, CEO and co-founder of Bondkick, shared with us some insight into the new platform.
The idea to create Bondkick was born from the recognition that the alternative financing market for corporations lacks a proper bond-like solution for those who may not afford themselves an expensive and rather complicated bonds issuing process.
Further product line development has extended the list of debt solutions and will extend even more.
What makes you different from current competitors?
We proceed from the fact that a business manager, who considers its business funding via alternative financing, has no intention of running around between dozens of different sources, offering either a business loan or invoice financing or funding only real-estate projects. We want to develop a united environment, where companies in their different stages of life and growth could address their different cash needs and funding requests – all in the same place. And where investors would thus have a wider selection of investment opportunities.
We are trying to automate the entire process of the whole service, making it as quick and easy as possible. Many of the current alternatives seem to have a lot of expensive manpower behind the facade of a beautiful website or platform. We try to minimise it in order to win in the speed and the quality of the service. The human role remains the important part of our compliance, but in all other respects, we keep saying that an electron makes fewer mistakes, and it moves faster.
And thirdly, unlike most other competitors, we do not cast our amateur assessments on the loan applications or applicants. Instead, we use the assessments of independent professional credit risk assessors.
What’s the thinking behind Bondkick?
Our main focus has always been on the free exchange of the capital across the borders – both inside and outside of European borders. Our whole service is designed according to this. At Bondkick, the capital does not know borders. This means, your business’s fund-raising campaign will be available in many countries at the same time.
The borrower can be a business from almost any part of the world and the investor can be either a business or a private person from all over the world.
There is no reason to hide the facts. The future, even taking in account the current economic stagnation and immigration crisis, is still in globalisation, globally connected and functioning markets. If we are not the ones taking down the barriers of moving capital, talent, knowledge, services and goods — our sons will be the ones doing it. And the shame will be on us.
There is also no reason to hide another fact, that western world and the world in general, are in an ageing spiral and also very soon will be in a shrinking spiral. Soon we won’t have enough capable workers. For that reason, our philosophy has always been – leave the work to machines and the joy of creating the robots and other beautiful things to people.
The whole loan application and the investing process has been made … mostly automatic.
What kind of loan products do you offer to European businesses?
Bondkick does not compete on a micro-business funding market, where the capability and the need for funding stays below 15,000 euros. We are mainly focused on short-term, year-long debt products with bullet loans of different kinds. The borrower may choose, whether the interests are paid back monthly or at the end of the year-long term. It is also possible to apply for 1 to 5-years annuity loans. The loans below 50,000 euros may be unsecured, however, higher amounts are usually secured by real-estate, guarantees, securities or shares.
We do specially welcome those businesses that would otherwise consider expensive and complicated bonds issuing. Many of our debt products are similar to bonds and most of the work can be done conveniently via Bondkick environment and without unnecessary extra fees. More to that, it is possible to start private debt fundraising campaigns for the closed circle of investors.
Our very special hybrid debt product is “Convertible Loan”. That is a loan that is convertible to equity and is meant for new or smaller companies starting or developing new businesses with no other possibility for collaterals than shares.
Who are behind Bondkick?
Bondkick belongs to a British parent company of the same name, which in turn is owned by British, Swedish and Estonian entrepreneurs. Among the British owners, Fergus Elder has held senior positions in JP Morgan, UBS and ANZ, Chris Pelly is an international VC entrepreneur operating mostly in the technology sector, and Kurt Pakendorf has 25 years of experience as a London business lawyer; Hillar Loor, however, is a Swedish IT entrepreneur. Estonian owners include, in addition to the founders Valentin Ivanov and Aadu Oja and several key employees, also Margus Linnamäe, owner of Eesti Media and Magnum Medical.