Tribe Funding interview with CEO Aleksandrs Pirhs

December 13th, 2021
13 minutes read

Tribe is a new and promising aggregator for investments in crowdfunding. The platform makes it possible to diversify investments across different crowdfunding platforms through a single account, which could prove an attractive approach for investors wishing to simplify their investment strategy in the crowdfunding space. In this interview, we ask the CEO of Tribe, Aleksandrs Pirhs, why he decided to build a marketplace for investing in deals from crowdfunding platforms, the people running Tribe, how the business model works, and much more. 

This is a written interview with Tribe Funding. P2PMarketData does not receive statistics data to perform in-depth checks of the information and numbers presented by Aleksandrs.

You can learn more about Tribe by visiting the Tribe platform page here on P2PMarketData.

The Story of Tribe Funding

Could you tell us a little about when and why Tribe was founded?

We established the company in April 2020 but launched the platform in October 2021. We got the idea of launching a marketplace/aggregator in late 2019. At that time, I was a product owner for DoZarplati, one of the leading microfinance companies in Russia. We were developing a P2P loan platform. My partner was working for another microfinance company that was involved in attracting financing via different P2P loan platforms. 

So, we were pretty familiar with the current situation in the marketplace, especially since we had also been investing on multiple P2P loan and crowdfunding platforms for some time. We had several lengthy discussions about the difficulty of investing in the crowdfunding space, even for individuals like us that were tightly involved with the space. Our conversations helped us break down the current market issues into three broad areas: 

1. Fragmentation and Saturation – The lack of unified regulation meant that crowdfunding services were restricted to local markets and could not develop into the European Union's single market. Yet, there were over 400 platforms already operating in Europe alone as of 2018. We realised how ineffective this saturation was as investors were bombarded with hundreds of offers from hundreds of different crowdfunding platforms daily.

2. Few choices (per platform) – The significant majority of crowdfunding platforms focus on originating investment opportunities in specific countries, industries, and product types.

The effect of this is that these platforms could only release a very limited amount of deals a month. On average, just up to 7 deals a month. Thus, investors looking to diversify their portfolio would have to join between five to seven different crowdfunding platforms AND keep jumping acros

Picture of Aleksandrs Pirhs as CEO of Tribe Funding

s those accounts looking for deals and monitoring their investment’s performance.

3. Fraud – The buzz of the marketplace here in the Baltics made it easy for false platforms with no track record to collect money to embezzle. They collected the funds and used them for “personal needs” instead of the projects they had presented to the investors. 

Thus, it became clear to us that the market needed a platform that could solve 

the problems of access, choice, saturation, and security – an aggregator

Tribe Ownership Structure

How is the ownership of Tribe structured? Are you and your co-founder Igors Demchakovs the sole owners of the platform?

Yes, Igors and I own the platform solely. 

Tribe Management Team

What is your own background, and how did you become interested in the crowdfunding industry? 

I have always been interested in money – how it works and how to get it. I also realised at an early age that those that had the most money had the most control. They dictated what we did, where we went, how long we stayed, etc. 

I discovered Forex Trading at the age of 13, and it was very attractive to me at that age. The discovery gave rise to my interest in investing. Unfortunately, I could not open a real trading account at that age, so I traded on DEMO accounts. Meanwhile, I kept reading books about trading and finance, which fueled my interest in the field even more. 

During my research, I found out how the planet's most prominent institutions, such as banks and significant investment funds, make money. For example, they lent to operating businesses and invested in high-quality cash-flowing assets such as residential real estate. I was fascinated, but I also saw the tremendous amounts of money required to do that. So I filed the information at the back of my mind.

After making some money working different jobs in my teenage years, I opened a trading account in my mother’s name – with her permission, of course. Further, I took various courses on trading and finance, discovered stocks, ETFs, bonds, and other financial instruments. 

I discovered crowdfunding in 2016. At that time, alternative investing had really started to grow in Europe. That was when I realized that crowdfunding or alternative investing is a technology that would enable a regular Joe like me to make money like the wealthiest institutions on this planet. This was when I started “crowd-investing”.

In 2018, a well-known Loan Originator in the P2P loan investing, DoZarplati, approached me with an offer to take a Product Owner position. I was to be in charge of the launching of their own P2P platform. Unfortunately, they decided to close the project when the second wave of COVID-19 hit. At that stage, we were already quite close to launching Tribe.

Who are the other management members?

Igor Demchakov: Cofounder and Strategic executive of Tribe Funding. Igor has more than 20 years of experience in the business. He’s a founding member of Booking Group - a major aggregator in the hospitality industry. Booking Group has a presence in over 150 countries and 20,000 locations globally. 

Anatolijs Saksaganskis: Financial Controller at Tribe Funding. Highly experienced finance professional – an auditor.

Sergejs Kazakevics: Business Development Director at Tribe Funding. Sergejs has been involved in finance since 2008, working in various banks, including one of Europe's leading investment banks – Saxo Bank.

Ivan Dorohov: Chief Information Officer at Tribe Funding. Besides being an experienced Software Engineer, Ivan has also participated in building several companies, acting as CTO and CEO.

Mihail Levencik: Chief Technology Officer at Tribe Funding. He is a very talented software engineer and experienced entrepreneur, and one of the hardest-working people I know.

Do you think the skills needed to run an aggregator platform like Tribe are different from a crowdfunding platform that offers investments directly? 

In my opinion, the skills are quite similar; we just focus on slightly different things. When running a marketplace, naturally, you’re going wider than a regular crowdfunding platform. Hence, you must have a team with a broader scope of competencies to deal with the different investment types, structures, and business sectors, all under various legislations.

Another requirement is a deep understanding of different business procedures and control measures in these types of businesses, such as – deal origination, due diligence, funds issuing, monitoring, recovery, etc. One also needs to know how to measure their effectiveness against historical and current performance.

Creating a solution to a common problem in the crowdfunding space

As mentioned above, Tribe is a crowdfunding marketplace that aggregates investments from different crowdfunding platforms. Why did you choose this business model instead of building a crowdfunding platform yourself? 

We never even considered launching a crowdfunding platform. Our less-than-satisfactory experiences as investors in the alternative investing space made it an unacceptable option for us. Instead, we were passionate about creating a solution to those problems, plus it seemed like a more significant business opportunity. Additionally, the fact that there was no other model like this on the market fueled us with excitement. 

Investing on the Tribe Crowdfunding Marketplace

Could you briefly explain what type of investments you offer at Tribe? 

  • Agriculture loans: loans related to farming activities, ranging from buying equipment and lands to working capital loans. The investments are backed with collateral, such as heavy machinery, immovable property, or crops. In some cases, they are also backed with individual state guarantees and sole accountability from the borrowers.
  • Sustainable projects: Investors lend money to companies with a positive impact on the environment, for example, solar energy panel installations or reforestation projects.
  • Equity crowdfunding real estate projects: these opportunities are different from real estate crowdlending because they allow investors to buy into future real estate developments. Under this arrangement, investors might own a stake in a new condo, shopping mall, or high-rise building, for instance. The returns on these types of projects are also usually higher than fixed-interest loans, sometimes up to 20%.
  • Construction projects: Investors lend money to professional developers in stage payments to purchase land, development on the property, and further construction. The loans typically mature between 8 and 48 months.
  • Buy-to-rent real estate projects: here, people invest in properties that are rented out and get their returns as a piece of the rent proportional to their principal investment.
  • Real estate development projects: These are typically smaller ticket deals, and the money is allocated to develop a particular estate. The estate that is under development will be pledged as a guarantee to investors in the deal.
  • SME loans backed with real estate.
  • Factoring: here, investors purchase owed invoices at a discount. In return, they are entitled to receive full invoice payment at face value from the debtor company. The investors’ profit is the difference between the discounted rate paid for the invoice and the invoice's face value paid by the debtor. There are different types of invoices:
    • Insured invoices (protected with Trade Credit Insurance) – they come with credit risk protection provided by an insurance company.
    • Uninsured invoices;
    • Public administration invoices.

If I decide to place money at Tribe and build a diversified portfolio, how much can I expect in net yearly return after losses and delayed payments?

Besides making sure that investors on Tribe get access to diversified supply deals, we had some other goals. One of them was to make sure that investments in the marketplace were protected and carried reasonable risk. Since risk is strongly correlated with returns, we can generally not offer investments with a higher yield than 14% p.a. But some other investments can yield higher returns. For example, equity crowdfunding projects can return yields as high as 20%. Another example is factoring, where we can apply double the interest rate if there is a delay in repayment.

Thus, to answer your question, your annual return on investment will depend on your investment strategy and risk appetite, and it could be averagely estimated at 11%.

How do you calculate your returns? What method do you use to decide when a loan must be written off and accounted as lost or with minimal chance of recovery? Do you use an objective or subjective way of deciding when to write off loans in the actual returns?

We use the Net Annualized Return formula. The rate of return is calculated based on the amount of principal invested and actual interest payments received over the lifetime of an investment, net of any fees and write-offs.

We look very carefully into what procedures our deal partners have for dealing with late payments and defaults. Additionally, we look at the historical loan portfolio performance to see how effective those procedures actually are. 
With deals available on Tribe, a loan can only be written off if all guarantees has been realised, and there is no longer a possibility to recover the principal amount. Therefore, we are constantly on the lookout to ensure that the protection, whether it is insurance, pledge of assets, or any other type of guarantee, covers the loan amount in full.

How Tribe Handles Risk

You currently offer investments from Max Crowdfund, LendSecured, Emprestamo, HeavyFinance, Housers, Raizers, and ROIER. How do you choose which platforms to collaborate with? And how do you ensure that the investments offered on the Tribe marketplace are safe for investors to put money into?

One of our goals at Tribe is to offer investors something we call “supreme” diversification. It means that we ensure a constant supply of crowdfunding projects in different assets, countries, sectors, and industries. So we look for our partners based on that criterion, and, of course, we release deals to investors only after we have completed our due diligence on the partner.

Our due diligence consists of evaluating a partner's:

  • financial position;
  • portfolio performance, and
  • internal loan procedures

Once we have that information, our due-diligence team reviews the documentation and assigns a score to the deal partner. We repeat this procedure as often as is necessary. 

Regarding projects: Before we onboard a deal partner, we align the partner's scoring model to our own. We then check if the score assigned to a project corresponds to the partner’s scoring criteria and perform our own checks on the project. Those checks include deal structure, guarantee type (+structure), project owner's financial reports, track record, etc. It is only after we are satisfied with our findings that we publish the project. 

98% of all investment opportunities on Tribe Funding come with protection ranging from a pledge of assets to personal guarantees and insurance.

If Tribe, for some unlikely reason, should go out of business. What will happen to the investors’ money?

Tribe's operational funds and client funds are separated. Therefore, if Tribe goes bankrupt, investors’ money will be safe and still be accessible. We have a strict agreement with our payment service provider about funds segregation and where those funds can be transferred. It usually moves from the customer to a dedicated account, from there only to the respective partner, and back to the investor. If there is a default, an insolvency administrator will be appointed to manage/distribute investors' current assets and future proceeds. 

Industry Outlook

You work with a wide variety of crowdfunding platforms, which must give you a broad insight into the industry. What do you think the future of crowdfunding will look like? Which challenges do you see for the industry in the coming years?

Crowdfunding in Europe is undergoing considerable changes that are hard to miss and impossible to ignore. The events of recent years, in particular the pandemic, further contributed to the development of this area by disrupting traditional financing options. The time for crowdfunding is exciting, with the market experiencing increased interest and acceptance around the world. US, UK, and China's experience shows substantial room for growth, e.g., there are individual platforms in the US with investment volumes exceeding total EU crowdfunding volumes.

Take a step back and think about this: micro, small and medium-sized enterprises (SMEs) constitute 99% of companies in Europe. They provide two-thirds of private-sector jobs. Yet, close to 60% of SMEs are rejected when applying for financing via traditional funding sources. Financial markets have failed to provide SMEs with the financing they need. Access to finance has been identified as the second-largest problem individual SMEs face. This gives crowdfunding an astonishing room for growth.

Additionally, crowdfunding unlocks asset types for regular individuals to which they might not have had access. For example, with as little as 500 EUR, a regular person can invest in real estate, a market that was and is still dominated by banks and investment funds such as Blackstone. This alone is a deca-billion EUR market opportunity just in Europe. 

From a regulatory perspective, the progress is enormous. Now, it's the private sector's turn. The regulation itself helps platforms with opening new markets and makes the space substantially more attractive for institutional money. On the other hand, it drives up the operating costs and increases the competitive rivalry that also leads to cost increase. Thus, it seems to me that since it is becoming increasingly more difficult/expensive for platforms to compete, we will see a lot of mergers and defaults in the coming years. And, of course, we will see many interesting new projects, such as - niche platforms like HeavyFinance and LendSecured, and big marketplaces like Tribe Funding.

The key to success will be to educate people about crowdfunding and give them the UX level they deserve. 

The future of Tribe

What’s next for Tribe? Where do you see the marketplace in 5 years?

I could write a separate article about where I see Tribe, but to keep it short, we see ourselves actively competing in the marketplace. Our goal at Tribe is to popularize and make crowdfunding one of the most popular investment tools in Europe, then other regions. So, we have a long road ahead of us filled with developing and adding new features to the platform, educating people about crowdfunding, adding new partners, working with regulators, etc.

Our long-term play is to become an “Umbrella” brand offering different services, including Banking and Stock exchange.

You can lean more about Tribe by visiting our Tribe platform page or you can go directly to the platform at