In 2014, Finnest started with their debt and mezzanine capital products and gave SME/”Mittelstand” companies access to alternative financing. So far, they have helped SMEs from Austria and Germany in over 70 campaigns.
During the current pandemic, Finnest adapted its products and services to offer solid SMEs fast financial help: e.g. Finnest has adjusted their “opening hours” to 8am-10pm to serve their clients & is giving a priority lane for loyal customers. Fast, efficient, and unbureaucratic.
Finnest has also successfully launched a campaign with di-soric, an SME focusing on automation in assembling & packaging. They raised their funding goal in half the expected time frame to further their product line.
The reason is simple: Finnest is giving the community what they want. A study conducted by them among their community resulted in the following top findings (n=500): While investing in sustainability is key, the 3 top sectors interesting now are medical care products & medtech; bio-nutrition; (high-)tech industry. The image of the company is more important than the region; however, most investors feel they currently do more than crowdinvesting; they can actually contribute to secure jobs and keep the economy from a standstill.
Wonderful initiative. Who is behind all this you wonder? We have asked Finnest 8 questions for you to get to know the team and understand their ultimative mission:
Q: Guenther/Michael, could you please introduce yourself shortly and explain what mission you are onto with Finnest?
MAK: Michael A. Koch, CEO of Invesdor Group.
GL: Günther Lindenlaub, COO of Invesdor Group and Founder of Finnest
MAK: Our core activity is to help funding companies mainly in the Mittelstand / SME segment – through crowdfunding funding. Our initial mission was to help those companies to develop their full potential by offering them a fast and hassle free access to debt and mezzanine capital. Furthermore, we enable those companies to use the funding rounds also as a booster for their brand awareness and loyalty within their communities. From May on, we will also offer securities, first exclusively in Austria, then a bit later in Germany. Our Goal is to be a “One Stop Shop” for funding SMEs and Growth Companies with the widest possible product portfolio.
Q: How would you rate your achievement so far, what is the success rate, and why do you think that is?
So far in our core business debt/ and mezzanine capital in the DACH region we have a success rate of 99,4%. Why?
We only allow companies on the platform who have a proven track record of more than 10 years. They are profitable and decide to do Crowdinvesting to engage with their community or strengthen their balance sheet for further growth or innovation. This is what our community expects from us. We are confident that our security products – launched in May – will have a similar success rate.Günther Lindenlaub, COO
Q: According to the most actual statistics of the BMDW, in 2017, 67% of the total employable population in Austria were employed by the SME sector. Why are KMUs such an important part of the Austrian economic landscape?
MAK: Austria is a comparably small country with many regionally rooted hidden champions characterized by their strong innovation rate and export orientation. They grew mainly organically handing the business over from one generation to the next with a high level of entrepreneurial spirit. Those SMEs companies are clearly the backbone of our Austrian economy.
Q: From your insights, how has the Covid-19 pandemic impacted this landscape? Could you pls elaborate.
GL: Clearly, the first weeks insecurity had a grip on everybody. Now we feel that people have heard enough “bad news”. They want to get a chance to do something about it. And we from Finnest / Invesdor Group see it as our job to open doors again. We see our mission in helping companies, even under the most difficult conditions, to fulfill their complete potential, since many SME’s products and services are very important for society right now. For example, we opened a new funding campaign for a Mittelstand company recently, and within a week we collected more than 50% of the target amount. This, honestly, was surprising even to us.
Q: Which measures has Finnest specifically taken to combat this rising factor/issue?
MAK: Based on clients insights as well as two surveys that we launched right at the start of the Corona Crisis, we developed a special initiative called “Finnest unterstützt”. We focused our activities on companies positively challenged by the crisis in industries like health, organic food, and technology as those are also of prime interest to our investors – especially now. We brought down further hurdles, increased our service level and developed product solutions specifically adapted to the current crisis. We are also lobbying to get access to state and federal guarantee programs as our processes are often faster then the traditional channels and allow the crowd to profit from advantages that currently are reserved only for traditional financial institutions.
Q: What kind of solutions do you offer KMUs in need at the moment?
GL: For a KMU older than 10 years and with more than 10 mln revenues, which has a healthy business and outlook but is coming under pressure due to the current situation we can help to raise funding and simultaneously foster the relationship to its community. We also opened a “fast track line” for our existing customers for setting up campaigns. And we opened additional channels for communication with companies and investors, we went the “extra mile” and extended our call center times substantially into “after office hours”. We also want to help companies that are especially important for society at these times, so we exclusively lowered our size requirements (10 years, 10 mln revenues) for these companies.
Q: What keeps you going under such extraordinary circumstances and what message would you like to give your FinTech fellows (or KMUs?)?
Our mission is to support companies to realize their potential. Right now, everybody has to contribute. That is also what keeps us going. We had to quickly adapt to the new market environment from an organization, cost but foremost product & service structure. “When the going gets tough, the tough gets going.”Michael A. Koch, CEO
Q: What lies ahead in 2020 for Finnest, (and for the Austrian FinTech sector as such, from your point of view)?
MAK: In 2020 we want to expand our market share by launching a suite of security products first in Austria and later in the second half of the year also in Germany. We are convinced this will create additional value to our partner companies and also open more opportunities to private and professional investors. We believe this new offer will be an exciting “game changer” for the SME & Growth company financing market.
Q: What are the three ingredients that make a FinTech successful in Austria?
MAK: Next to the quality of your team
- A solution responding to a real demand and offering a clear USP
- A scalable business model – ideally combined with an early internationalisation
- Good financing partners (like Speedinvest)
Thank you very much & congratulations to achieving such success!