Interview with Indemo

interview with indemo

Hello everyone! Yesterday I already published an abridged version on Instagram, today I'm publishing the full interview with Indemo* and CEO Sergejs Viskovskis. I'm also taking a closer look at the new platform in my P2P portfolio. Enjoy reading!


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Indemo – An overview

Defaults are as much a part of the life of a P2P investor as cash flow in the form of interest. You first have to understand and internalize this when you start investing in this niche. But of course you should always keep an eye on the “in default” loans/notes etc. when you are on a platform. Ideally, these are in a low range and simply need time before they can be recovered (in the best case without loss of capital).

However, the fact that you can and want to invest explicitly in loans that have already defaulted is new. Nevertheless, at the end of last year I invested my first euros with Indemo in so-called notes (i.e. debt securities) in the form of discounted debt investments, which offer exactly this type of investment. But how exactly does it work?

Indemo* offers investments in defaulted real estate loans, so-called non-performing loans (NPLs), among other things. Together with partners in Spain, Indemo buys the most attractive ones from the local banks at a large discount via a special purpose vehicle (SPV), as the banks are required to remove such NPLs from their books if borrowers fail to make payments for a certain period of time. My investment therefore serves as financing for the SPV, which can then buy more NPLs at a discount.

As a rule, up to eight such NPLs are bundled into one note and then offered for investment on the platform. Notes are securities and also have classic characteristics such as an ISIN.

So what does the SPV do with these NPLs? Well, it has more options than the bank. The focus is always on reaching an out-of-court settlement so that the property (these are almost always second homes, by the way) can be sold on the market. In exceptional cases, however, it can also go to court, which results in higher costs and a lower profit share.

Have I heard profit sharing? Exactly! As investors in notes, we receive a 50% profit share on the difference between the NPL price (which has already been bought at a discount, usually around 40%) and the proceeds from the sale of the property.

As investors, we do not receive a regular cash flow, which must be taken into account, but rather repayments or a corresponding profit share whenever one of the properties in a note is sold.

The status of the respective NPLs can be seen quite clearly in a progress diagram. The platform has designed this clearly.

Indemo – The interview

Hi Sergejs! Meanwhile almost a full year passed that we met in Stuttgart at the INVEST. I hope you’re doing well! So as a start, could you please tell my audience in one or two sentences what Indemo* is and why it’s special in the P2P industry? 

Yep, I'm good, thanks. By the way, this year we'll also be attending Invest Stuttgart 2024. So, if any of your community members would like to meet up and chat, feel free to drop me a message on LinkedIn or Telegram.

Indemo is an innovative investment platform offering access to asset-backed investments, particularly in Spanish real estate discounted debts, democratizing access to lucrative opportunities previously reserved for institutional investors. 

What sets us apart in the P2P industry is our focus on secured NPLs, collaborative approach with professional partners, and forthcoming secondary market feature, revolutionizing the investment landscape for retail investors.


In the last month a wave of new P2P platforms started. A lot of them had the goal to grow fast and take care about platform UI/UX, regulation things later. You did quite the opposite. Was that on purpose and if so what’s the reason?

Absolutely, our approach to prioritizing regulatory compliance and user experience from the outset was intentional. By securing full licensing and regulation in the EU from the start, we've ensured that all our investment products adhere strictly to EU laws and regulations. This not only instills confidence in our investors but also underscores our commitment to transparency and integrity.

Additionally, our adherence to the EU Investor Compensation Scheme provides added peace of mind for our users, ensuring that their cash and securities are protected up to 20.000€. While some platforms may focus solely on rapid growth and UI/UX improvements, we believe that establishing a solid regulatory framework and ensuring investor protection are paramount for sustainable long-term success.

From the business perspective, the MiFID license that Indemo has allows us to operate and attract investors in all EU markets, and of course we have wider access to better and low-cost banking services all over the EU.


Let’s dive into the offered investment products, DDI (or NPL). Can you explain to an interested investor the process until such a DDI can be listed on Indemo*?

Banks place loans that no longer align with their interests on the market at reduced prices. In Spain, banks are obligated to sell non-performing loans if a person who bought real estate is not paying the bank for 12 months. The volume of such debts' secondary market in Spain amounts to around 60 billion euros annually, making it the largest in the EU.

It's important to note that only debts backed by real estate properties or simply mortgage loans are offered on Indemo. Our Spanish partner, a licensed and professional debt servicer, meticulously selects the most desirable loans on our behalf. They specifically target properties situated in well-priced and demanded locations throughout Spain, with an emphasis on secondary residences to enhance their allure and investment potential.

Our Spanish partner also adds value through its expertise within the legal and financial due diligence process before acquiring the debt from the bank. Through this careful selection process, we ensure that our investors have access to high-quality and secured assets with promising returns. The Spanish partner invests its own operating capital to acquire the debt, and only after that is it listed on Indemo for our investors to invest.

Indemo verifies that the debt listed by the cooperation partner adheres to all qualification criteria, such as ensuring the Price-to-Value ratio does not exceed maximum thresholds, attaching an independent valuation not older than 6 months, confirming the property insurance policy is in place, and proceeding to listing only after these criteria are met.

Indemo aggregates several of these debts into a Note (securities) that offers diversification and more consistent returns on your investment. These Notes become accessible to individual investors like you through the Indemo platform.


And now the DDIs are listed on the platform and I can invest my money. What’s the term for such an investment? What’s the minimum investment amount?

Discounted Debts are equity investments. Which means that upon the sale of the real estate linked to the debts at market  or if the debt is sold at the later recovery stage to another servicer, you will be eligible for a share of the generated profits. You’re entitled to proceeds from the sale of the property/debt, typically providing two digit returns in 12-18 months.

The minimum investment amount on Indemo is just 10 EUR. Regarding the term, a projected annual return rate of 15.1% is expected based on the moderate scenario for Discounted Debt Investment products. In this scenario, 90% of the outstanding mortgage debt is anticipated to be settled within 18 months of the investment date. 


As a cash flow focussed investor my money is bound for some time. Are there any options to have some sort of repayment or is there a secondary market planned?

At Indemo, we understand the importance of flexibility for cash flow-focused investors. While there are currently no options for repayment in place, it's important to note that each Note embodies eight debts, and each debt has its own legal recovery stage. This means that one debt can be repaid or recovered earlier or later than others, resulting in eight bullet payments within the projected 24 months.

Also we're excited to announce that a secondary market is on the horizon and we plan to launch it in fall 2024. Our Product Owner is currently conducting an in-depth analysis to identify the best solution for our investors.

What we can promise is that this secondary market will function similarly to a stock exchange, providing investors with the ability to buy and sell their investments and follow the market quotes. The seller will set the price according to market trends and the legal recovery stage where his debt now sits. On the buy side not only others platform users will be able to buy the debts, but other debt servicers from Spain will be buying debts which approach the recovery stage and price which suits their investment policy. We've already validated our idea with discounted debt experts in Spain, and we're confident that this feature will be revolutionary.


At the moment you focus on the Spanish market only. What are the main reasons that make this market more interesting than others?

At present, Indemo's focus on the Spanish market stems from several compelling reasons that make it particularly intriguing. To fully grasp the significance of our presence in this market, it's essential to contextualize within the broader banking landscape.

According to 2023 data from the European Central Bank, major banks across Europe collectively hold a staggering Non-Performing Loan (NPL) portfolio of 343 billion €. NPLs pose a significant challenge for banks, requiring substantial resources in terms of capital, time, expertise, and management focus to address effectively. Banks, driven by the imperative of maintaining profitability, are eager to swiftly reduce their NPL share. Consequently, many opt to offload these debts to specialized entities, diverting attention from their primary activities.

In Spain, the fourth-largest economy in the EU, from where Indemo sources its debts, NPLs totaled 42.1 billion € in 2023, representing 3.56% of banks' total credit. Banks in Spain are actively reducing their NPL stock, with significant transfers in 2022 amounting to 11 billion euros.

Indemo's USP lies in its focus on the secured NPL sector, leveraging real estate assets located in Spain to differentiate the debt and generate healthy returns. What sets Indemo apart is our collaborative approach. We don't independently select and bring debts to the platform; instead, we collaborate with a professional partner – servicer – who is a debt market expert in Spain. By aligning our strategy with this partner's goals, we enable them to share profits with investors while expanding their portfolios and diversifying funding sources.

The decision to focus on the Spanish market is bolstered by several key factors:

  • An established, large, and liquid market, with significant players who dictate the rules of the game.
  • A favorable climate in the real estate market, where Spain stands out amidst the decline in central and eastern Europe.
  • The expertise and understanding of the market by our partners for over 8 years, to whom we entrust the selection and management of the product.

In essence, our focus on the Spanish market is driven by its unique position within the broader banking context, coupled with the strategic advantages it offers for asset-backed investments.


I guess that you already have other potential markets in mind. Could you briefly tell us about them?

Expanding into other potential markets is indeed a consideration for us at Indemo. However, replicating what we've accomplished in Spain requires meticulous planning and significant time investment. Our servicing partner boasts a track record of over 8 years in working with discounted debt investments, providing us with invaluable expertise and insights. They have successfully managed portfolios exceeding €65M, showcasing their expertise and reliability in the industry. 

While we are open to exploring opportunities in other countries, our approach to expansion is strategic and cautious. We recognize the importance of partnering with strong, reputable entities with extensive track records in each market. Finding the right partners is essential to ensuring the success and sustainability of our operations as we scale into new territories.

Also, we do not want to repeat the mistakes other P2P market players made when chasing pure geographical expansion without the expertise and experience in new markets.

In summary, while we have other potential markets in mind, our focus remains on maintaining the high standards of quality and excellence that define Indemo. We are committed to expanding our footprint only when the conditions are optimal, and we can forge partnerships that align with our values and objectives.

So during 2024 we plan to focus on the market of Spain.


(Especially German) Investors are quite risk-averse. If we imagine a worst case scenario in which real estate valuations fall by, let’s say, 20-30%. What impact does such a scenario have on my Indemo investments?

In our opinion, our product is well-aligned with these risk considerations. As mentioned previously, investors acquire mortgage debts at a significant discount, typically ranging from 30% to 40% below the real estate's market value. The valuation, which is available on Indemo, reflects a distressed property assessment. This means that the property is in poor condition due to the debtor's circumstances, resulting in an adjustment of approximately -10% from the property's market value. In total, this creates a cash buffer equivalent to around 40% to 50% of the property's market value.

Given that Discounted Debts function as equity instruments with varying risk-reward ratios, we analyze different scenarios. For instance, in the worst-case scenario, or what we term the “Stress scenario,” investors may experience a loss of just 6% of their investment. It's worth noting that this assumption is quite extreme, suggesting that it's nearly impossible to sell the pledged real estate property for almost three and a half years from the investment date, with the property's price declining by 44% of its appraised value. It's noteworthy that a 44% price drop represents the maximum observed during Spain's mortgage crisis between March 2008 and September 2014, according to Eurostat.


And also for my (especially) German audience, I have to ask. Where are my funds held? Of course, there’s no buyback guarantee, isn’t it?

For our German investors, I understand the importance of transparency and security when it comes to investment platforms. Rest assured, your funds with Indemo are held securely. We do not offer a buyback guarantee, as all our investments are real asset-backed. Also an average 40% discount from the real estate market price mentioned above serves as a significant security buffer.  This means that your investments are backed by tangible assets, providing an added layer of security.

In terms of the cash flow, Indemo as a MiFID investment company is bound by EU provisions on investors' funds protection and segregation. It implies annual external audit by the financial auditors to check all the procedures and accounting books and records. Audit report shall be provided to our regulator.

As for the location of your funds, they are kept in account at the LHV bank, a leading bank in Baltics and the UK with 7+billion assets. All money that has been transferred to Indemo investor accounts is kept in a secure separate Indemo investor omnibus bank account, which is legally separate from Indemo's own account and has no other function. This arrangement ensures that your funds are held in a regulated financial institution, offering peace of mind and security for our investors.

With the EU Investor Compensation Scheme on top, protecting investors' cash and securities up to €20,000 if something goes not according to the plan.


I could ask about your complete roadmap, but I just want to know, what’s the one thing on your roadmap you are really focussing on?

In our roadmap, we are placing a significant focus on the creation of a secondary market module. The development and launch of this module will bring several key benefits:

  • Enhanced Product Offering: It will enable us to provide both mid-term and long-term investment products without compromising on liquidity features for the investor. This means offering a wider range of investment options while ensuring investors have the flexibility to access their funds when needed.
  • Customization: The secondary market module will allow investment products like mortgage NPLs to be customized into short, medium, or long-term offerings based on the client's personal preferences. This level of customization ensures that investors can tailor their investments to align with their individual financial goals and risk tolerance.

Overall, the introduction of the secondary market module represents a significant advancement in our platform's capabilities, providing investors with a wider range of investment options, improved performance metrics, and greater flexibility in structuring their investment portfolios. 

Aside from the secondary market, I'd like to offer a sneak peek and announce that we will be introducing two more significant features.

  • Integration with Leading Real Estate Services: We are excited to announce our integration with leading real estate services in Spain, Italy, and Portugal, including Idealista. This integration will provide access to different layers of big data, including real-time property valuations and other valuable statistics, enhancing our investors' decision-making process.
  • Mortgage Loans Investments: We will introduce a new investment opportunity focused on mortgage loans. These investments will involve scheduled and regular cash flow, originated by our cooperation partners in Spain. These loans will be backed by low Loan-to-Value (LTV) real estate properties, providing added security and stability to our investors' portfolios.


Last but not least, the stage is yours. Why should I invest on Indemo and in DDI in particular?

Firstly, Indemo offers a unique proposition in the investment landscape. We provide access to asset-backed investments, particularly in Spanish real estate discounted debts, which were previously reserved for institutional investors and high-net-worth individuals. By democratizing access to these investments, we're opening doors for smaller retail investors to diversify their portfolios and potentially achieve higher returns.

Secondly, DDI presents a compelling investment opportunity. With the secondary market set to be added in fall 2024, DDI or mortgage NPLs will definitely outperform the leading P2P market product — short-term consumer unsecured loans — across all crucial metrics: yield, collateral/security, and liquidity.

Moreover, our track record speaks for itself. We've achieved remarkable milestones, including securing a European MiFID investment firm license in record time, gaining approval from the Central Bank for our innovative approach, and attracting over 600 customers and 1.6M EUR AUM across the EU within just three months after our launch. These achievements underscore our commitment to excellence and our potential for continued success.

In summary, investing in Indemo and DDI offers the opportunity to be part of a groundbreaking venture in the investment landscape. With our innovative approach, strong track record, and commitment to democratizing access to attractive investments, we believe that Indemo presents a compelling investment proposition that shouldn't be overlooked.

Indemo – The summary

All in all, I can only say that what Indemo* is offering is exciting, very exciting. As an investor who pays a lot of attention to diversification, the investments offered in NPLs/DDIs are very interesting. The secondary market itself is now state of the art. However, the way Indemo has designed it, with the inclusion of external buyers, is new in my opinion and makes perfect sense. The fact that the investment products are not currently geared towards a steady cash flow is fine, especially as a corresponding product has been announced with the mortgage loans. What I also like is the focus on the Spanish market. Other platforms have often started their expansion too early and/or chosen the wrong partners. Cobbler stick to your last!

Overall, I will expand my investment bit by bit and report on it in the monthly P2P portfolio update.

Indemo – Register here

If you want to invest on Indemo*, you are welcome to register via my link*. I will receive up to 1% cashback.

Social Media

On my own behalf, I would like to mention that I also present new projects on Twitter (kaph1016) and Instagram (investdiversified) in which I invest myself. Also, on Facebook I have a page. There are also a few insights into how I invest in other areas. So just follow me :). *Some links in my posts are affiliate or referral links. That means I get a little bonus. For each of those who use these links, however, there are no costs or other disadvantages. On the contrary, there is usually a start bonus or cashback. So if you use these links, you support my blog and for that I say thank you in advance!

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