Ever since the acquisition in November 2014, Dutch SME P2P lending provider Geldvoorelkaar (GVK) has been the stellar performer for TrustBuddy. With a market share of around 60% in the Netherlands, GVK is one of the biggest SME lending providers in Europe and continues to grow rapidly.
Many investors are still not aware of the success and importance of GVK for the TrustBuddy case. We have therefore decided to reach out to GVK’s founder and CEO Martijn van Schelven in order to get a better picture. Here is our Q&A:
Nordic Investor (NI): Could you please give us a brief background about yourself and what made you start Geldvoorelkaar (GVK)?
Martijn van Schelven (MS): My personal background is that I worked with the ING Bank for about 12 years and I stopped working with the ING in 2008. The last four years I had my own ING banking office based on a franchise principle. I was the first in the Netherlands to be an independent ING entrepreneur. Unfortunately the franchise formula stopped in 2008 although it was very succesful. But then it gave me te chance to start with Geldvoorelkaar. When I worked as a franchisee, back in 2006 / 2007 I personally experienced, already back then, before the financial crisis, that it was getting harder and harder for SME’s to get a regular credit line through a bank. I started to think how we could re-arrange lending and borrowing in a more transparent manner. That resulted in GVK which went “live” in december 2010. Together with my companion Edwin Adams we worked about 1,5 years getting the platform together.
NI: Describe the typical lender and borrower of GVK
MS: There are no typical lenders or borrowers. We service a wide variety of customers. The borrowers are very diversified in as well size as industry. Lenders are mostly men, well-educated but also here, there is no typical lender.
NI: Why did you decide to become a part of TrustBuddy? What are the main changes for you since the acquisition, both good and bad?
MS: We have a shared ambition. Trustbuddy had already international expertise, something we lack. Also Trustbuddy was a few steps ahead when it comes to IT and development. We saw the possibility to integrate our product into a new platform with a lot of synergy. Off course, when we became part of an international company it was a huge change for us. Integrating systems, integrating financial overviews, communication are all things we need to work on. But we’ll get there.
NI: The Dutch government seems very pro-crowdfunding. As of January 1st, 2016, there will be no legal limit regarding the size of the investment amount in crowdfunding. What does that mean for GVK?
MS: It means that our lenders have no maximum investment of 40k per person any more. A lot of lenders are already at their maximum but still want to invest more. From the 1st of January that’s possible so it means that through our customers a lot of new lending capital will be made available.
NI: Please describe the main characteristics of the Dutch market for us. What are the trends you are witnessing? Who are your main competitors locally?
MS: We see a market which is rapidly developing. Crowdfunding in the Netherlands is more accepted as a serious alternative. There is more professionalism and we are receiving better and more professional applications. There are still a lot of wrong prejudices about crowdfunding however, which we need to take away. A lot of people think that crowdfunding is only suitable in a “kickstarter” sort of way with reward based creative projects. We prove on a day-to-day basis that crowdfunding is however a real solution for regular SME.
NI: It has been announced that your planning to expand to Belgium. How far have you come? Are there many similarities between the Dutch and the Belgian markets?
MS: We are planning to get Belgium up and running before the summer. Off course we want to be completely sure that we do this in a very compliant way, which is suitable within Belgian legislation. We see a lot of similarities but there are, obviously, also a lot of, mostly cultural, differences. The way of funding and setting up businesses are quit the same.
NI: How involved are you in the start-up of the SME business in Sweden and what are you expectations for this market? Will Crowdfunding Society and GVK share the same IT platform?
MS: We are involved in educating people, work on IT, and explaining what we do and why we do it. It’s a complete different way of working for Trustbuddy so it takes some time to get all the people involved on the same line. Basically we will share the same IT platform although obviously the platform will be more suited for the Nordics.
NI: Can you describe the license situation for GVK? What licenses do you have and are they valid throughout the EU? Can your licenses be used to operate Crowdfunding Society in the Nordics?
MS: We have all the licenses we need in the Netherlands, you can verify it in the register of the AFM (financial autority, www.afm.nl). Whether our licenses also are suitable for the Nordics; other people withing the Trustbuddy organisation can explain more about that. What we see is that, untill now, there is no strict European legislation. For all the different countries different rules apply. we think it is very important to be compliant with al the local and different set of rules.
NI: Please shed some light on the seasonality of your business, both in terms of revenue and margin development. The recent Q1 report showed revenues of around SEK 5m and EBITDA came in at SEK 0m.
MS: First quarter of the year is always a bit behind. That has been so over the last years as well, it also makes sense. january is always a slow month, a lot of businesses are just partly open, vacation period in the Netherlands etc. Apart from that companies are busy making up there figures and are focussing on other things then borrowing. Compared to the first quarter last year however we had a growth in volume of I believe approximately 20%. If we look at the last 5 years we have experienced that the last quarter of a year always is the best looking at total lend out volume.
NI: In an interview published one year ago (http://www.p2p-banking.com/countries/netherlands-interview-with-martijn-van-schelven-founder-and-ceo-of-geldvoorelkaar/), you stated that you expect by 2017 that GVK’s funding capacity will be grown towards EUR 100m each year. Is that still valid today?
MS: That is still valid. We still see a growing importance of crowdfunding. We have a cooperating government and more and more we are working alongside with banks. We see a different attitude towards crowdfunding. Potential strategic partners are coming to us for some sort of cooperation which will influence our volumes in a very positive way. Also we see a growing willingness with auditors, bookkeepers, accountants etc to introduce crowdfunding as a part of a total loan. Hybrid loans, in which the bank, the entrepreneur himself as well as GVK are combined are becoming the new standard. This type of borrowing is getting more and more important and we see, also with the banks, an enthusiastic attitude towards this development.
NI: What are you biggest challenges right now?
MS: keeping our market share, diversify our product portfolio, expanding to different countries, grow our volumes, but also upscale risk assessment. we have a lot of ambitions, the challenge is to keep focussed and achieve what we have in mind.