Corporate bond offerings were always one of the most compelling ways to invest. Usually, it is considered a big players game. But Lithuanian real estate development crowdfunding startup Röntgen is about to disrupt that stereotype. The platform successfully distributed 14-months bonds worth half a million Euros at 12 percent yield in just 12 days.
REWO, a real estate development and investment management company, was the first to make the corporate bond offering on Röntgen. In total, the company has sold bonds worth 3 million Euros to help finance the new real estate project. One-sixth of all raised money came from 43 small investors, who discovered the opportunity on the crowdfunding platform.
Martynas Stankevičius, the CEO of Röntgen, believes this was the first time in Europe when corporate bonds, registered at the Central Securities Depository of Lithuania, PLC, were offered to investors using both conventional and crowdfunding channels.
"Our analysis and practice show that combining these two channels is highly beneficial to the bond issuer. Firstly, it gets more good publicity, which positively affects company's image. Secondly, a company can raise more money, because investors come not only from within a closed investor's network but from all across the internet", said M. Stankevičius.
According to him, the success of the first corporate bond offering on Röntgen is a clear sign that small investors are ready to make this kind of commitment. "Real estate is one of the main asset classes, yet it is still difficult to access for many investors. They have been waiting for technology and law to catch up with their needs. When it did, we made sure they could enjoy all the benefits of the fintech progress, making investing in the corporate bonds process as simple as shopping online", emphasized Röntgen's CEO.
As unbelievable as it is, with Röntgen it takes only about 5 minutes to invest in non-listed corporate bonds while sitting on the couch at home or waiting for a flight at the airport. And that includes the registration process, enabled by mobile signature and smart person identification system.
Lithuania is undoubtedly one of the fintech stars shining brightly in the European sky. The Baltic state even has its law on crowdfunding, and that makes all the difference to startups like Röntgen.
"I doubt we would be pulling off the necessary deals with all the contributing parties if it weren't for the law on crowdfunding. Proper legal regulation and support from the Bank of Lithuania were crucial to our project success. It gave assurance to all investors that their money is safe. And that's huge, because credibility, in my opinion, is a highly valuable resource these days", said M. Stankevičius.
At the moment Röntgen is in talks with numerous real estate developers who are also interested in using the platform as a corporate bond distribution channel. According to M. Stankevičius, now that there is a success story, the pace of negotiations will increase and quite soon there will be more corporate bond offerings on Röntgen.
The Lithuanian fintech startup, which became operational only this year, has its place in debt-crowdfunding business too. In less than a six months it helped to debt-crowdfund two different real estate projects, bringing in about 1 million Euros.
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