"The idea to apply an innovative financing solution for the acquisition of debts and their portfolios came from monitoring the growing potential of the debt market and receiving requests from partners to help finance transactions. In the first half of 2021 alone, more than € 20 million debt portfolio acquisition transactions were offered on the Lithuanian market. Our business model is based on a crowd-investment platform, where, after a rigorous risk assessment, debt or their portfolio can be acquired from private investors. During the first half of the year, we have already acquired about € 3.8 million debt portfolios from legal entities - the value of the largest debt portfolio acquired by the investor this year amounts to € 3.3 million," says Dovydas Varkulevičius, the head of DebtProfilers.
According to D. Varkulevičius, there is currently no similar platform in the European Union. What makes this platform so unique is the ability to buy debt quickly and easily.
"The platform's solution helps to avoid the confusing bureaucratic process in financial institutions or the time spent negotiating trying to prove to business partners and the company's shareholders that a loan for such a transaction will pay off. Often when there is a need to finance such a transaction, an application is made to the banks or financial institutions, making the loan lending process longer. Although the person concerned usually needs a quick solution and a source of financing,” Mr. Varkulevičius comments on the challenges the Lithuanian platform helps to solve.
The head of DebtProfilers emphasizes that the platform applies strict risk assessment procedures: "For the risk assessment process, we use a risk assessment model developed by experts with more than 15 years of experience in the debt market. This model allows assessing the risk of the debt portfolio as well as the investor and buyer. Before submitting financial terms, we make sure that clients have enough experience in debt collection. We also use anti-money laundering solutions on the platform to protect our and our customers' reputation”.
Currently, the main groups interested in DebtProfilers' services are lawyers, debt collection companies, or individual debt collection professionals who can acquire and collect debts or their portfolios.
The minimum amount of investment in the platform starts at € 250, and the annual return reaches up to 15% from the amount invested. "The return to investors is really high - it is significantly increased by theoretically relatively higher risk, although in practice, with an advanced risk management model and many years of experience in this field, DebtProfilers experts are able to significantly reduce risk," points out D. Varkulevičius.
The Lithuanian-based financial technology company currently has 4 employees. Its founder, Dovydas Varkulevičius, still runs the international debt collection platform Inform Debtor, which offered the market a new solution for debt collection worldwide through finding the most suitable partners using virtual auction process technologies and enabling debtors to be informed in various languages worldwide 2 years ago. During this period, Inform Debtor has already helped more than 600 businesses collect more than € 35 million in debt.
