Slovaks can become ‘bankers’ as Crowdberry launches debt financing for Pohoda festival with an attractive interest rate

After obtaining a European ECSP license, Crowdberry, which operates the eponymous investment platform, marks an important milestone for both investors and Slovak companies. Credit (debt) financing will now complement years of private growth capital (co-ownership) investing. Debt financing through an investor loan will be first used by Slovakia’s Pohoda music and arts festival, which is targeting €500,000 through crowdinvesting and offers investors an interesting interest yield.

Pohoda festival has agreed a partnership with Crowdberry, an investment platform that brings together thousands of investors who have been investing their funds in Slovak and Czech companies and real estate in the form of growth capital for more than seven years.

Crowdberry has created a domestic investment ecosystem that aims to present to Slovak and Czech investors the attractiveness of the local business environment. For seven years, it has been teaching people to invest locally, transparently and meaningfully. Crowdinvested companies funded by Crowdberry private investors include brands such as Refresher, Isadore, MultiplexDX, DNA ERA, Noili Beauty, GymBeam, Ecocapsule and many others, providing tens of millions of euros in growth capital. This has allowed investors to co-own these companies and participate in their growth and business. Recently, Slovaks and Czechs have also successfully financed the first private prevention and wellbeing clinic in Slovakia, Poliklinika Váš lekár, with €2.5 million in capital.

Established company ‘co-ownership’ is now complemented by credit financing

Crowdberry is currently adding a new debt product in the form of an investor loan for companies and real estate to its established “growth equity” investment opportunities. This lower-risk investment instrument will provide investors with regular interest payments commensurate with the risk, with clearly defined rules. It thus responds to the needs of investors who are looking for more conservative capital appreciation opportunities.

“Simply put, debt crowdinvesting is lending to a company at interest. For the investor, it represents lower risk, fixed maturity and priority in payout compared to equity crowdinvesting (growth equity), where the investor acquires an ownership stake in the company. In the case of debt financing, the investor can obtain guarantees in the form of collateral for the loan,” explains Dano Gašpar, managing partner at Crowdberry.

Debt crowdfunding offers a fixed interest rate return, though the actual return may be lower. The risk is the potential default of the loan or adverse market developments. The solution is to diversify and understand the interest yield with risk and hedge scoring, which we analyse in the investment documentation. This is the domain of Crowdberry – thorough analysis with transparently communicated investment risks.

Financial wellbeing with an interesting yield

Crowdberry launches its first investment financing with the Slovak lovebrand, the Pohoda festival. This debt financing will be used by Pohoda to cover the company's reduced working capital due to the COVID-19 pandemic and to finance an increase in the music and art festival’s capacity.

In simple terms, investors will lend capital to Pohoda via the Crowdberry platform for three years at a pre-determined interest rate, paid in semi-annual intervals. The investors become Pohoda's quasi-bankers by lending the capital in the form of a loan.

The investment opportunity targets a total capital of €500,000 with the possibility to increase the target sum by 50% after meeting agreed conditions and interest. Investors can invest upwards from €3,000 with an approx. 10% annual interest yield, which will be paid semi-annually together with principal repayments over three years. In addition, the investor loan is also secured by the receivables and the company itself.