As the time of summer vacationing is fast approaching, our new theme for the month of June is travel. Consequently, on behalf of Slovakia, we would like to introduce a crowdinvesting campaign recently completed by the hotel chain Falkensteiner.
What is Crowdinvesting
Crowdinvesting can essentially be considered to be a category of crowdfunding which includes the two main return-on-investment motivated types of crowdfunding – equity based crowdfunding and lending based crowdfunding.
Falkensteiner and crowdinvesting
Falkensteiner Hotels and Residences is brand that needs no long introductions. It’s an award-winning chain of hotels in the category of 4- and 5- star hotels, with strong presence on Slovak, Czech, Austrian, Italian, Croatian, and Serbian market, as well as a managed annual turnover of 160 mil. EUR.
The Falkensteiner group has already completed one crowdinvesting campaign in the past. The first campaign ended up being immensely successful, which motivated the decision to enter a second investment round, as the management sees crowdinvesting as the ideal means necessary to stimulate the growth of the hotel chain.
The recently completed Falkensteiner campaign ran at Finnest , a crowdinvesting platform that concentrates on lending based crowdfunding in Slovakia, Austria, Germany, and Switzerland.
The campaign was open to investors from Slovakia, Austria, and Switzerland. Investors from these countries had an opportunity to offer Falkensteiner a subordinated loan with fixed interest rate of 4% p.a. with maturity of 5 years. The minimal investment was set at 1000 EUR, but Falkensteiner has prepared special VIP bonuses for those who decided to invest more. For example, in case the investment amounted to 5000 EUR or more, the investors could look forward to an automatic upgrade to Gold Spirit Club for a period of 5 years. In the event that the investors loaned 10 000 EUR or more, they were rewarded by an automatic upgrade to a new VIP class ‘Diamond Spirit Club’, also for a period of 5 years.
When it comes to payment of interest, the investors had an interesting alternative, that is to receive the interest payments in form of vouchers for accommodation with a 50% bonus on top. This option was selected by an overwhelming 65% of investors during the second transaction. According to Otmar Michaeler, one of the owners, this points to the marketing potential of the opportunity.
Based on the press release issued by Finnest, it is possible to conclude that the second investment round was equally, if not more, successful as the previous round completed in the autumn 2017, which reached its financial goal of 2.5 mil EUR. The second crowdinvesting campaign running from November 2017 had the same financial goal as the previous one, however, this time the goal was reached within amazing 5.5 weeks, in other words, in roughly half of the campaign time.
Finnest further informs that the average investment amounted to 8000 EUR, exceeding any previous records set by crowdinvesting campaigns completed up to this point.