The investment allows the “opening up [of] the Invesdor service in two new European markets” said Mr Mäkelä. Invesdor is a major player in the Nordic market. However, to carve out a market share of the European market will take significantly more firepower. One important step has been made: Invesdor is the proud owner of a MiFID license which allows them to operate across the European Economic Area (EEA) – once the country specific notifications are in place. The platform can receive and transmit orders, organise equity offerings and offer financial advice across the area.
This license is a major step, with Mäkelä describing it as “A stable basis to build our compliance on”.
Invesdor is still required, however, to comply with the independent regulatory framework of each country that it operates in. This means that sizeable due diligence must be carried out before they launch operations in a country. Mäkelä commented:
“It is certainly a hurdle, and in general regulation is probably the number one issue that fintech companies need to know how to navigate to be able to make it”.
For this reason, Invesdor’s expansion will be gradual. First up, expansion into the UK and Netherlands – and the first UK offering should be coming online this Autumn. Fintech companies are famed for the leanness of their operations. However, having a presence across a whole continent and in many countries will require some boots on the ground. As part of their expansion plan, Invesdor is weighing up when to have a physical presence and when to offer a cross-border service:
“One important factor is the maturity of the market. Being the first in the market also brings the burden of educating the market. Once investors are already familiar with the concept of crowdfunding, it is easier to offer a cross-border service as an option to the existing competition.”
It is clear that Invesdor’s expansion has some way to go – and considerable work needs to be done for every country they enter. However, this investment should fuel the beginnings of its expansionist ambitions – although in the end it will take considerably more than €1 million. This is not the only company looking to offer a multinational service, however. Amongst others, Symbid launched its Italian service this week, whilst back in March AltFi looked at Bondora, which is offering loans in Estonia, Spain, Finland and Slovakia. On the horizon, expect more innovation as Mäkelä told AltFi about plans to bring a debt product to market:
“Our debt product is an unsecured, aftermarket-tradable bond whose interest rate is determined dynamically in an auction-like system. It is an attractive funding option for more established companies, and for investors it provides a lower risk means of balancing their portfolios.”
Invesdor certainly aims high – with European expansion and a diversified product offering on the cards. The acquisition of a MiFID license is certainly interesting, and if they can manage the difficult task of gaining a presence across Europe then they will hold a uniquely valuable strategic position. Although this may take a considerable amount of time and a considerable amount of investment, the foundations have been laid.
