Wiseed is not an internationally well-known platform as the website is only available in French. Therefore, investing on Wiseed is more suitable for investors understanding French. Nonetheless, I am speaking a bit about it below so you have an understanding of what possibilities are offered by this platform that is currently the second biggest share of my portfolio.
What is Wiseed ?
Wiseed is a platform offering to invest in 3 types of products:
- Equity of start-ups
- Bonds on real estate developers
- Bonds on start-ups and SMEs (to a lesser extent).
Once you have invested € 20 K or in 20 different projects (all categories included) you become a “premium investor” and have access to more real estate deals. I found the deal flow too scarce until I reached that status.
There are regular offers from start-ups seeking to increase their capital on the platform. Many economic sectors are represented including environment/green energy, innovative/IT, etc.
There is first a voting phase where a summary of the project is available to investors to express interest. Once the project has raised sufficient votes, it moves to the fundraising phase where investors have the fully-fledge information on the project and can decide whether to invest. This phase can last several weeks. In addition to the amount sought, a minimum targeted amount is also provided to consider the fundraising as successful. During this period investors can contact both the platform and the management of the start-up to ask their questions. This is one perk of Wiseed to have put in place such forum (for all projects including real estate) where exchanges are visible to all investors, providing additional information and transparency.
There is no early exit mechanism and investors must be aware of the risk they are taking becoming shareholder of reasonably small and young companies. Even in case of success, it is also important to keep in mind that the maturity of such investments is likely in the 5 to 8 years range.
A 0.9% flat fee per investment is charged by Wiseed, as for all investments on the platform. In addition, a 5% flat fee is charged and allocated to the management of investors’ participation into the start-up (fees attributed to the holding managing this participation) in order to cover expenses for the first 5 years.
Real Estate Bonds:
Wiseed is the largest platform in France for real estate crowdlending. The offer is fairly similar to Fundimmo with real estate developers seeking funds to complement their own funds by issuing full bullet bonds with a maturity of 1 to 2 years and fixed interest rates in the range 8-10%.
The real estate developers are usually of quality and have already secured a bank loan much larger than the amount they seek on the platform. This is usual business practices that banks require a certain level of own funds for the structure (often specially created) realising the project. In order to match that request, or to keep the possibility to conduct additional projects, the developers are looking for complementing their own funds by raising money on Wiseed. Therefore, the reimbursement of the bonds are often subordinated to the bank loans in case of default which make the risk higher in that sense and similar to a mezzanine debt.
It yields less than what you could find in other countries but French real estate market has so far proven to be very resilient and did not experience serious troubles even during the 2008 financial crisis that had hit pretty badly other markets such as in the US or, for EU countries, Spain and Ireland in particular.
The demand from investors is very high and projects are funded pretty quickly. Only the largest ones need sometimes a couple of days. Wiseed has put in place a queuing system so you know how many investors are awaiting the possibility to invest before you and it includes an indication whether you should be able to invest (based on investments’ intentions filled in by the investors beforehand).
A new law from November 2019 allows projects to be financed on crowdfunding platform for up to 6 M€ vs 2.5 M€ so far. This new law should enable the platform to propose new type of assets that were de facto excluded in the past.
From time to time there is the possibility to invest in bonds of SMEs or innovative start-ups. The rates are in the 8%-10% range for a 2 to 3 years maturity. They are sometimes often bullet with yearly amortisation of capital.
Compared to real estate deals and equity start-ups the offer remains limited and I have already seen a couple of companies coming back to raise additional funds after less than a year.
Wiseed statistics and track records:
There are 15,500 active investors on the platform invested in an average 10 projects for € 8.2 K.
Since 2009 there have been 491 projects funded on the platform (all categories), 172 have been reimbursed and 10 have defaulted. Out of the 10 there has been 1 real estate project (Terlat group that has defaulted in 2017, impacting several platforms in France), the rest being start-up failing.
By definition the equity business is much more risky, there is no cap to the returns you can expect from investing in equity of a start-up but the risk of losing your entire investment is definitely correlated.
On real estate, the average project amounts to € 400 K and yields 9%. Default rate in value is 0.46%.
For which investors is Wiseed suitable?
This platform is only suitable to people understanding French since there is no English version.
Depending of your risk appetite you might stick to some of the offers proposed by Wiseed and disregard the crowdequity part. I personally invested in 5 start-ups for a total of € 1,500 and will now simply see what will happen since there is no early exit possible. Most investors are focused on the real estate deals which concentrate the higher demand.
There is a greater possibility to diversify on Wiseed than Fundimmo already on the real estate deals since the numbers of deals is more important (once you become Premium investor) and you can invest as little as € 100 per project (investment per tranche of € 100). However there is a flat 0.9% fee no matter the original yield and the maturity of the investment. In case of short maturity or early repayment this can weight more on the net returns.
Pros / cons:
To summarise at one glance:
|– Enable to invest both on bonds and equity on the same platform on interesting projects (innovative; eco-friendly; etc.)|
– Enable to invest in French real estate market
– Average interest rate of 9% for real estate in France
– Real estate developers of good quality
– Detailed information for each project enabling to make well-informed decision
– Very good track record for real estate
– Possibility to ask questions to the platform (all projects) and to the companies (for equity and business bonds) and to benefit from answers to other investors’ questions
– Possibility to invest from € 100
– Possibility to transfer funds after signing the purchase agreement or to pay by credit card = no cash drag.
|– 0.9% upfront flat fee|
– Number of real estate deals when you are not a premium investor
– Full bullet bonds (for real estate) and no secondary market/ early exit
– Platform lacking basic statistics such as XIRR
– Mezzanine-type of debt since most of the case RE developers have secured a bank loan that has seniority to Wiseed’s bonds
If you are interested and want to give it a try you can visit the platform here. There is unfortunately no special offer/bonus for new (and existing) investors.