This article is translated from Latvian. It was originaly published on labsoflatvia.com on January 5, 2022. Written by: Anda Asere.

Matīss Ansviesulis and Dāvis Barons, founders of the financial services provider CreamFinance, have launched a peer-to-peer lending platform Esketit. It offers investing in loans issued by CreamFinance and its affiliates. Since its inception in April 2021, the platform has funded more than 100,000 loans worth €18 million.

Over time, CreamFinance’s founders realized that the best way to finance their loans was to have their own platform. So they had it set up to finance the loans they issued. Over time, they will keep adding additional tools and features associated with investing.

Before joining Esketit, the CEO Vitalijs Zalovs worked at Mintos for six years. He explains that, like Mintos and Twino, Esketit also offers investments in loans. “For example, Mintos can finance loans from different lenders, but we are 100% responsible for the quality of the loans we offer to investors on our platform. In this sense, we are more similar to Twino, which also finances loans issued by its group companies,” says Zalovs.

Average Investment Is €14 Thousand

The average amount of investment by Esketit investors is around EUR 14 000. “This is significantly more than in other platforms, where the average amount is often between 2,000 and 3,000 thousand euros. This is due to the good reputation of our founders,” says the head of Esketit.

“The Esketit platform currently has almost 1200 investors, mainly from Germany. There are also investors from France, Italy, Spain, the Czech Republic, and Poland. These are countries where it is common to invest on these platforms. Some of the platform’s investors are also from Latvia.

“So far, we have helped investors earn €300,000,” says Mr. Zalovs.

Recently, the founders of the platform, M. Ansviesulis and D. Barons, set up a lending business in Jordan, so the platform also offers the possibility to invest in loans in that country. They have also recently started a business in Sri Lanka. In the near future, Esketit will also offer to invest in this country’s loans.

The Platform Decides To Register In Ireland

When it was decided to set up the platform, the team analyzed which country to establish it in. The founders decided to register Esketit in Ireland. “When owners start a new business, they look at all the countries that are suitable and available. In this case, the European Union. Ireland has a good reputation with a well-organized regulatory framework, tax system, and business environment. Right next door is the UK, where financial services are well developed, and Ireland has taken the best from that. After considering all the details, pros, and cons, the decision was made to register the platform in Ireland,” says Mr. Zalovs.

This summer, Mintos and Twino received their investment brokerage company licenses. He says that in the current business model of Esketit, the platform does not need such a license. “But we understand that this is important for investors. That is why we are looking at the possibilities in which country to eventually get a license – in Ireland or elsewhere. It will also depend on what additional services we decide to offer,” says Zalov.

In 2022, Esketit plans to triple the volumes achieved in 2021. Mr. Zalovs would like to see four to six thousand investors on the platform very soon. “We currently have around seven million euros under management. We want to increase this to 20 million euros in 2022,” he says. Meanwhile, the volume of loans financed could reach €100 million in 2022.

Planning For New Products

“We are focusing on what products investors need. They are the ones that define our future,” explains Mr. Zalov.

Esketit will also soon offer the possibility of investing in cryptocurrencies – the so-called stablecoin.

A Well-Developed Sector

V. Zalovs says that Latvia has a well-developed fintech industry, including peer-to-peer lending platforms.

“In recent years, Latvia has proven itself as a place where fintech start-ups of all kinds are emerging. Latvia has not only alternative lenders but also other financial services-related start-ups. There are many good examples in the Baltic States, such as Wise. People in our region gain experience working for these companies and often go on to found their own start-ups, using their experience and knowledge,” he says.

Creamfinance Experienced Record Profits In 2021

Consumer financial services provider CreamFinance was founded in Latvia in 2012. The company currently operates in Spain, Mexico, Latvia, the Czech Republic, and Poland under the Crediton, Creditair, Contante, Extraportfel, Ladyloan, Lendon, and Creamcredit brands. It employs more than 500 people, some of whom also work in CreamFinance’s IT center in Austria.

The Group originates €15 million of loans every month. The annual volume of loans is around €190 million, but since beginning its operations, CreamFinance Group companies have granted more than €700 million in loans.

In 2020, CreamFinance had a turnover of EUR 49.99 million. In the first three quarters of 2021, the turnover was EUR 32.26 million.

“CreamFinance is doing well; the third-quarter figures have just been published. They show that 2021 will be the best year in the company’s history from a profit point of view,” said Mr. Zalovs.

In 2020, the company experiences loss due to exchange rate fluctuations in the consolidated annual report. The CEO says that this phase is over, and 2021 gets better every month. In the first three quarters of 2021, the company has earned EUR 2.2 million. 

In 2017, CreamFinance raised €21 million from African bank Capitec in exchange for a 40% stake. At the time, it was one of the largest investment rounds in the Latvian start-up environment. This followed a €5 million investment from the international venture capital fund Flint Capital. So far, no information has been publicly disclosed about other investments.