Heavy Finance Analysis

HeavyFinance is a Lithuania-based platform that was launched in June 2020. The platform is regulated by the Bank of Lithuania and the European Securities and Markets Authority (ESMA) as a European Crowdfunding Service Provider. It connects small and medium-sized farmers with investors to finance sustainable agricultural practices and generate soil carbon credits. The platform offers loans to European farmers, primarily in Poland, Portugal, Lithuania, Latvia, and Bulgaria. HeavyFinance’s vision is to remove one gigaton of CO2 emissions by 2050 by supporting climate-friendly agricultural practices.

Companies and individuals are allowed to invest on the platform. Residents of countries that are not listed on the EU and UN sanctions list can invest on the platform.^[1] Since its launch, HeavyFinance has raised over €50.41 million, maintaining an average monthly volume of €1.53 million over the past twelve months.^[2] The platform has a community of 11,053 investors.^[3]

• HeavyFinance connects farmers with investors to finance sustainable practices, aiming to reduce one gigaton of CO2 emissions by 2050.
• The platform offers European agricultural debt investments starting at €100, secured by collateral like heavy machinery and arable land.
• Company is founded by an owner of another successful marketplace lending platform and Heavy Finance is backed by international VC capital (€1.3m, seed round)
• HeavyFinance currently offers interest rates of 12% to 15.9% with loan durations from 8 to 56 months. Repayment follows a bullet loan structure, with full principal and monthly interest paid at the term’s end.
• HeavyFinance's secondary market hosts 650 loans with terms of 14-48 months, some with delayed payments of up to 27.4 months.

HeavyFinance offers debt investments focusing on European agricultural loans. These debt instruments are backed by collateral such as heavy equipment, arable land, or other assets, including farmland machinery, sales agreements, or subsidies. HeavyFinance loans range from €13,000 to €80,000.^[4] You can conveniently browse all live Heavy Finance projects directly at P2PMarketData.

Lenders can invest a minimum of €100 per project. The loan durations for current campaigns range from 8 to 56 months.^[5] Repayment terms typically follow a bullet loan structure, with monthly interest payments and the principal amount repaid at the end of the loan term. Investors enter into contractual agreements directly with HeavyFinance, which then extends loans to farmers secured by collateral.

HeavyFinance offers a secondary market where lenders can exit their investments early. Currently, the platform lists over 650 loans with term durations varying from 14 to 48 months. Some loans have delayed payments of up to 27.4 months.^[6] Transferring investments on the secondary market incurs a one-time fee equal to 1% of the nominal value of the transferred right of claim. An auto-invest feature is available on the platform.^[7]

HeavyFinance also provides tax incentives for investors from countries having a double taxation agreement with Lithuania. Lenders can reduce withholding tax by submitting a DAS-1 form and proof of tax residency, avoiding paying income tax twice. Also, the platform does not deduct tax from cash back bonuses.

Among the current 24 active campaigns, HeavyFinance offers interest rates ranging from 12% to 15.9%.^[8] Since its inception, the platform has returned €18.01 million in principal and paid out €5.90 million in interest. While HeavyFinance has not disclosed its delay rate, it does report a default rate of 12.03%, amounting to €5.52 million out of an outstanding principal of €28.04 million.^[9]

HeavyFinance imposes various fees on investors, including an administration fee for overdue payments by the borrower set at 0.1% of the overdue amount per day. On the fundraisers' side, the platform collects an operator's fee, typically ranging from 1% to 8% of the amount financed during the project, determined on an individual basis.

Primarily, HeavyFinance generates revenue via fees charged on loans. Additionally, it operates a referral program, rewarding existing users for referring new clients. In the long term, HeavyFinance aims to expand its revenue streams by reselling its carbon credits.^[10]

Laimonas Noreika, Darius Verseckas, and Andrius Liukaitis founded HeavyFinance. Noreika, serving as CEO, leads sustainable agricultural investments with his renowned fintech expertise, following his successful exit at FinBee, another marketplace lending platform. He holds a position as a member of the Forbes Business Council. Liukaitis, the CFO, applies his knowledge in financial management and risk mitigation, gained from his background in FinTech and P2P lending. Verseckas, as the CMO, advocates for sustainable farming practices and promotes green loans.

HeavyFinance, incorporated under Heavy Finance UAB, has not explicitly detailed its shareholders. However, the company has conducted two VC funding rounds, raising a total of €1.3 million. The main backers include Estonia-based start-up accelerator Startup Wise Guys and Polish VC fund Black Pearls VC. Mantas Mikuckas, co-founder of Vinted, invested €1 million in the company.^[11]

In 2022, HeavyFinance earned the title of Fintech Company of the Year at the Lithuanian Fintech Awards. As of 2024, the company is actively raising capital. In January 2024, HeavyFinance secured a notable €54.47 million funding round.^[12]

Looking forward, the company plans to generate its inaugural batch of nature-based carbon credits in the first half of 2024. Audited by Audito Aspektai, UAB, HeavyFinance disclosed a net turnover of €1.36 million in FY22, surpassing the €700,793 net turnover reported for FY21. Nevertheless, the company incurred a net loss in both fiscal years, amounting to €1.10 million in FY22 and €617,141 in FY21.^[13]