Important message relating to Envestio:
The website for Envestio is down following Envestio being reported to the National Conduct Authority
Unfortunately, all investors that have put money into Envestio are faced with no answers as the Envestio website is currently down, and no information has been provided. This is disappointing and also worrying news for current investors who have placed thousands of euros in their care. What will happen to the funds? No-one knows at this point yet.
The below article has been kept as a reference to what Envestio was.
What Is Envestio?
Envestio is a Crowdlending investment platform, which is classed as an alternative investment (compared to things such as share trading, term deposits etc). What is P2P investing you ask? P2P means peer to peer (i.e. from me to you) and allows one a person to take a loan from another person. This means that you bypass a bank or other official financial institution. The result – better loan interest rates for the borrower, and a higher investment interest rate return for the investor. These returns can be much higher than interest, term deposits and other financial investments. Envestio currently offers up to 22% return on various P2P investments!
Envestio (www.envestio.com) is an Estonian P2P platform created in 2018. Envestio works in a similar way to Grupeer, where investors can invest in a select few loans but are able to invest larger sums of money if desired (compared to Mintos for example). The platform offers secured and unsecured loans in various industries such as real estate, crypto mining, energy and other industries. Envestio offers to a repurchase guarantee, however, will take 5% if you choose to sell the loan back. If you hold onto the investment, there are no costs or fees. There are no restrictions on European residency, so everyone can invest at Envestio, with only a minimum investment amount of €1. Bank transfer with TransferWise does work with Envestio.
- Envestio is a private limited company, registered in Estonia in February 2018
- Paid out interest: €1,300,000+
- Average interest rate: 18.44%
- Registered investors: 8500+
- Total funds invested: €21,000,000+
Envestio is looking to introduce a secondary market for selling investments before they reach maturity. No date has been set yet.
Envestio Account Set Up
Envestio Account Setup is simple with a quick application form to be filled in. Required information includes name, country of residence, date of birth, email and password.
Once the investor has completed this process, they are able to access the main page and start investing in loans.
Beware: Before being allowed to withdraw money from your account, Envestio require you to complete a Client Identification Procedure before the withdrawal. The platform requires a scan or photo of a personal identification document (i.e. passport), and a household utility service bill showing your physical address.
The options for submitting the documentation include sending the required information through to [email protected], or alternatively go into the documents tab and choose which documents you would like to upload.
Envestio Loan Types
Envestio offers a wide variety of loans, in industries such as:
- CryptoMining – purchase of equipment and materials necessary to run crypto currency mining activities.
- Real Estate – generally construction of a building or market place
- Energy – such as maintenance or construction of power plants
- Other – generally financing of business activities, such as purchasing product, or fixing current infrastructure.
Envestio classes their projects under two types – secured loans and subordinated loans:
- Secured debt means that the investment project owner has provided additional legal insurance such as a mortgage, mixed collateral or personal guarantee, as well as other essential agreements.
- Subordinated debt means that all essential agreements have been concluded, but no additional guarantee has been arranged.
Using the internationally accepted credit rating scale (https://en.wikipedia.org/wiki/Credit_rating) Borrowers at Envestio are characterised as having a rating somewhere between BB and BBB.
Envestio Buyback Guarantee (also Envestio Repurchase Guarantee)
Envestio offers a Buyback Guarantee, however, it is not the same as the guarantees offered by Mintos and Grupeer. An Envestio investor at any time can see their investment back to Envestio and instantly receive invested money back. The downside is that Envestio will charge a percentage of the return for this service. Generally, the fee is 5% but can change per investment type.
Envestio has stated that they have enough capital to buy back loans immediately. There is an example provided on their blog:
- Envestio investor invests €1,000 into a project
- At any time before the project closes, the investor can see back the share to Envestio with a 5% fee.
- The investor would receive €950 in return. All the interest payments received before selling the investment back to Envestio, are kept by the investor.
Auto Invest Tool
The platform offers an automatic investment tool, allowing investors to automatically invest in loans as soon as they become available.
Find the autoinvest feature under the investments tab at the top. A quick run-through is below. To invest using Autoinvest, investors must:
- Provide a name for their rule.
- Select the loan type, including options for Crypto Mining, Energy, Real Estate, other and Production and Trade.
- Choose whether to invest in multiple loans from the same originator.
I.e. if this box is left empty, then you would not be able to invest in additional tiers of loans. For example:
You invested in “Oil product terminal rent Tier 1”. The investment is still ongoing. Through the settings, if “Oil product terminal rent Tier 2” came up, you would not automatically invest in this as it’s from the same originator.
- Choose how much to invest (either “all funds available”, or set a limit.
- Amount per loan (minimum of €100), expected rate and investment length.
Investors can also set multiple autoinvest rules which work independently of each other. The issue here is that if there are overlapping rules, an investor may end up having multiple orders for the same loan.
This new feature brings both positives and negatives to the platform. The positives are that the tool allows all investors to take part in loans. Investments won’t be missed due to being filled within an hour (much quicker than you can get money into the platform). The disadvantages are that (1) there is a minimum of €100 to invest (investors with lower limits will need to manually invest), and (2) that there is no due diligence that can be done on the loan. The investor has no idea what they are investing in. For more information on the autoinvest feature, see the Envestios helpful blog article.
If the borrower does not repay the money by the final date of the investment, the borrower still has 5 working days before legal proceedings begin. At this time, the delay will turn into a “default” and the platform will execute all guarantees and commence debt collection. The scenario that Envestio describe on their blog is:
- The investor who placed €1,000 into the investment (in this case a secured debt project) will receive 80% of the investment principal on the next working day after the default.
- The other 20% is then decided by the investor, where the investor can choose to
- Instantly get back half of the amount
- Wait until the debt is recovered.
As a result, at least 90% of the investment is fully secured.
If the loan was a subordinated debt project, the investor will have to wait until debt recovery proceedings have been finalised. Find more about the Envestio Buyback Guarantee from the Envestio blog here.
|Open Account, Monthly service fee, Annual service fee||Free|
|Funding via Bank transfer (minimum deposit – 100 EUR)||Free|
|Withdrawal < €5||€2|
|Withdrawal > €5||Free|
My Envestio Review
Envestio is a very interesting new platform in the P2P space. The juicy return coupled with 90% security in the loan makes it very tempting to invest. For some time there were issues and complaints about new investments becoming filled within an hour of being placed in the system. That seems to have been solved now with the introduction of the auto-invest function. However, the main drawback to this, is now an investor has no idea what they are investing in. It may have been wiser to make a system similar to Crowdestor, whereby loans are released a couple of days before investors are able to invest in them. This way, there is time to (1) see the loan and do some due diligence, and (2) deposit money into the system.
Unfortunately I think that with the platform, Investors will be forced to use the auto investment tool, otherwise, miss out on investments altogether. Who knows, with the autoinvest feature, the loans may now be sold out before reaching the platform.
Envestio does have a blog found here, which is usually updated with 1-2 posts a month. Topics include those such as Envestio buyback guarantees, frequent questions from investors and general information about crowd investing.
Envestio, like other P2P investment platforms (Bondora, Mintos, Grupeer etc.) offers a referral program to its investors. The referral system is open to everyone who has opened an account through the platform. The referral system allows investors to earn additional income regardless of purchasing P2P investments.
For simplicity, I will refer to the one referring a friend or other individual as the referrer, and the one who has been referred as the recipient.
Once the recipient creates an account and transfers at least €100 into the account, a €5 “first deposit bonus” will be issued to both the recipient and the referrer. On top of that, there is an additional “timespan” bonus which is a percentage of the net amount invested through the platform in the first 270 after registration.
The percentages paid out are:
- 5% for the referrer
- 5% for the recipient.
The timespan bonus will be paid out before the 5th of each month.
Envestio Referral Link
The Envestio referral link can be found in the Invite section, at the top right of your dashboard. The link would be similar to something like https://envestio.com/?invite=PdGF3N0.
Place the link over an image and it can be used like a widget, or advertisement on your website.
Envestio Special Campaigns
Every now and then Envestio will announce a special campaign for a specific project. The campaign will promote special terms if you have a specific amount of money specified by a certain date.
A recent example:
Envestio announced the special campaign – “Envestio Guarantee” for a power plant development project. Investors were given 1 week to invest a minimum of €10,000 in a specific power plant project, receiving a 100% buyback guarantee in return. Investors who had invested the minimum €10,000 received confirmation letters from the platform stipulating the 100% buyback in case of default.
Please note: Before investing in anything do your own due diligence and research. Nothing in this article is financial advice. Just one man trying to share his working and investing experiences!