bettervest GmbH AI Overview on 09/2025

Bettervest Overview 🌍

Bettervest is a German crowdfunding platform (founded 2012) that finances sustainable projects worldwide with retail investor funds. It primarily facilitates loans for renewable energy, energy efficiency, and other impact ventures, allowing everyday investors to support green projects while earning interest. The platform’s model pools many small investments (minimum €50) into crowdfunded loans or bonds for project owners. Reported historical returns average around 6–7% annually for investors (as of Sep 2024), reflecting the platform’s focus on moderate but stable yields. Key advantages include low entry amounts, tangible environmental impact (over 1.6 million tons CO₂ saved since inception, according to 2024 data) and alignment with U.N. Sustainable Development Goals. However, investments are high-risk and illiquid – funds are typically locked for several years, and if a project fails investors can lose their entire principal (⚠️ total loss risk). Bettervest mitigates risks through careful project vetting and recently introduced insurance guarantees, but it remains an alternative investment with no bank protection or guaranteed returns.

Bettervest Investment Products 📈

Bettervest offers debt-based investments in the form of subordinated loans and corporate bonds issued by sustainable project companies. Investors earn fixed interest, usually in the 5–8% range, paid annually along with amortization payments. Loans are used to fund projects that generate cost savings or revenue (e.g. energy cost reductions, sales of clean energy), which are then used to repay investors with interest. Legally, most deals are structured as Nachrangdarlehen (subordinated profit-participation loans) or small bonds; for larger financings, Bettervest can issue a mini-bond (Anleihe) that investors purchase into via their brokerage accounts. The platform sets up a German special-purpose vehicle for many projects, which borrows from the crowd and then lends to the project developer as a senior, secured loan. This structure helps secure collateral and facilitate partial guarantees. Geographically, Bettervest started with German energy-efficiency projects but now finances ventures in 21+ countries including many in Africa and emerging markets. Typical loan terms range from about 1 to 7 years, and minimum investment is €50 for loans (or €250 for bond offerings). By law, retail investors can invest at most €25,000 per project (to protect unsophisticated investors), and investments over €1,000 require a self-certification of sufficient assets or income. There is no secondary market or early withdrawal, so investors should be prepared to hold until maturity. Major risk factors include borrower default (projects can become insolvent, especially in developing markets), subordination (loan repayments rank behind other debts in a bankruptcy), and lack of liquidity. Each investment comes with a Key Information Document (VIB/WIB) detailing these risks and terms, and Bettervest prominently warns that loss of the entire investment is possible in a worst-case scenario.

Bettervest Company and Management 🏢

Bettervest is operated by bettervest GmbH, based in Frankfurt am Main, Germany. The platform was co-founded by Patrick Mijnals (a futurologist) and Marilyn Heib (a renewable energy engineer) in 2012, making it one of the pioneers in European impact crowdfunding. As of 2025, the company’s CEOs include Benedikt Hoffmann (who joined in 2025 with a background in impact investing) and Andy Goodwin. Co-founder Marilyn Heib served as CEO for much of the platform’s history and remains a key figure driving its mission. Bettervest’s shareholder base includes strategic partners: in 2018 the Triodos Bank – a leading sustainable bank – acquired roughly 20% of Bettervest’s equity, aligning with a cooperation to promote green finance. The company has also received support from EU programs (e.g. a Horizon 2020 grant) and awards from German institutions for its sustainable business model.

Legal Structure: Bettervest GmbH itself is a vertraglich gebundener Vermittler (tied agent) under German law. This means it operates under the license and liability umbrella of a regulated financial institution – specifically Effecta GmbH – rather than holding its own full license. Effecta GmbH is supervised by BaFin (Germany’s Federal Financial Supervisory Authority), ensuring that Bettervest’s investment brokerage activities comply with national and EU financial regulations. In practice, this setup requires Bettervest to follow strict know-your-customer and anti-money-laundering rules, and to present investment offerings in accordance with the German Vermögensanlagengesetz (Asset Investment Act) and the new EU crowdfunding regulations. The platform and its subsidiaries (including project-specific SPVs) are audited and must report to BaFin via Effecta, providing investors some regulatory oversight.

Overall, Bettervest’s team combines expertise in renewable energy, finance, and IT, and the company partners with organizations like African Guarantee Fund and development banks to enhance its impact (for example, by obtaining guarantees or co-funding for projects).

Bettervest Volumes and Performance Results 💹

Since launching its first project in 2013, Bettervest has grown steadily in both funded volume and user base. As of mid-2024, the platform reported €25+ million total funding raised for sustainability projects – up from around €20 million in early 2022 – indicating continued growth. Over 129 projects had been successfully financed by August 2024, and by late 2024 the total count surpassed 140 projects. This includes a diverse mix of solar installations, energy-efficient infrastructure, clean cookstove programs, electric mobility, and more across Europe, Africa, Asia, and Latin America.

The investor community is sizable: Bettervest surpassed 10,000 registered investors in 2021, and that number has expanded further (the platform’s press releases noted a healthy increase in active investors and reinvestment rates). In terms of returns, Bettervest advertises an average realized return of roughly 6.9% per annum for investors (historical average as of Sept 2024), though actual yields vary by project. Many projects pay interest annually and repay principal in installments, so investors often start seeing cashflows within a year of investing.

Importantly, project outcomes have been mixed: most projects have repaid as planned, but some have encountered difficulties. According to Bettervest’s founder, about 15% of all projects funded to date ended up defaulting (as of 2024). These failures were largely among older projects (particularly in developing countries pre-2018), whereas projects launched since 2018 have so far avoided insolvency cases. Nonetheless, a portion of investors have experienced losses – highlighting the need for diversification.

Bettervest also tracks impact metrics: by 2022 it had helped avoid an estimated 860,000+ tons of CO₂ emissions, a figure which grew to over 1.6 million tons by 2024, reflecting the substantial environmental benefits of funded projects. Default and loss rates are a critical metric for investors: Bettervest’s published default rate (15% of projects) is high compared to traditional investments, but the platform emphasizes that new risk management measures have improved recent performance. Many investors mitigate risk by spreading small amounts across numerous projects; in fact, Bettervest cites that investors with a diversified portfolio often still earned positive returns overall despite a few defaults.

The top investor returns on single projects have been around 8–9% p.a., while the worst-case outcome is a total loss (which did occur in some early cases). These figures underscore that Bettervest’s impact investments can be rewarding but require a high risk tolerance and a long-term horizon.

Bettervest’s Risk Management Approach 🔒

Bettervest places strong emphasis on project selection and risk mitigation, given the inherently high risk of crowdfunding ventures. The platform has a rigorous due diligence process: projects must meet strict social and environmental criteria (e.g. no fossil fuels, no weapons, positive contribution to communities), and they undergo a thorough evaluation of technical feasibility and economic viability. For energy projects, Bettervest often brings in an external energy consultant to validate the projected energy savings or generation figures. Only about 5–10% of proposed projects reportedly pass the vetting to be listed.

Beyond initial screening, Bettervest has implemented several risk management innovations since 2018. It commonly uses a Special Purpose Vehicle (SPV) structure: for international projects, a German-domiciled SPV (often a UG) is created to act as the borrower of crowd funds, and it then lends the money onward to the project company abroad. This structure allows the loan to be secured with collateral or guarantees in favor of the SPV (and ultimately the investors). For example, assets like solar equipment can be pledged, and SPVs may hold step-in rights if a project falters. Bettervest also often requires a debt service reserve or liquidity buffer – a portion of the raised funds (e.g. €25,000) is set aside to cover any short-term repayment delays or costs in case of trouble.

Since 2020, the platform has pioneered the use of third-party default insurance (termed Ausfallgarantie in German) on some projects. In partnership with organizations like the African Guarantee Fund (AGF) and development banks, Bettervest secures guarantees that cover typically 25–70% of any loan losses. For instance, a large cookstove project in 2023 was backed by an AGF partial guarantee – meaning if the borrower defaults after all recovery efforts, the guarantor will reimburse a significant portion of the outstanding capital to investors. These insurance mechanisms, while not eliminating risk, substantially improve recovery prospects in default scenarios. It’s worth noting that such guarantees usually exclude political risks (e.g. war, expropriation in the project country), so those remain a factor for projects in developing markets.

Bettervest’s team continuously monitors active projects: borrowers are required to provide regular updates and financial reports. If a project shows signs of distress (e.g. missed interest payments), Bettervest will engage with the borrower to find solutions such as restructuring, while keeping investors informed via the platform’s dashboard and emails. Internally, Bettervest does not publicly assign a credit rating or score to each project, but the project pages detail risk factors and mitigation measures (like guarantees or co-funding) so investors can gauge risk level.

The focus sectors – renewable energy, energy efficiency, clean cooking, etc. – themselves carry certain risks (e.g. regulatory changes in energy tariffs, operational challenges in remote areas), but also benefit from impact-driven grant support and high social priority, which can improve outcomes. Overall, Bettervest’s approach is to minimize default likelihood through careful project selection and structuring, but openly acknowledge that risk remains (even the CEO notes that a residual risk “always remains – as with any investment”). Investors are urged to diversify and invest only money they can afford to tie up long-term.

Bettervest Platform Features and Functionality 🖥️

Bettervest’s platform is a web-based investment portal with a range of features to help investors manage their impact investments. The platform supports two languages (German and English), catering to users in Germany and across the EU. All investments are made in euros (€) – investors from the Eurozone can easily transfer funds via bank (the platform uses a licensed payment service provider and trustee accounts to handle money flows).

The user interface provides an investor dashboard where one can browse available projects, view detailed project profiles (including business plans, impact metrics, and risk disclosures), and track their portfolio. Investors see the status of each investment (e.g. amount funded, interest rate, repayment schedule) and can download documents like the VIB (Vermögensanlagen-Informationsblatt) or bond term sheet.

Auto-Invest: At present, Bettervest does not offer an auto-invest or robo-invest feature – all investments are made by actively selecting specific projects. This is intentional, as many projects are unique and investors often like to choose those aligning with their personal impact goals (e.g. solar energy in Africa vs. energy efficiency in Germany).

There is also no secondary market on Bettervest, meaning investors cannot freely trade or sell their claims to others through the platform. However, bond instruments purchased via Bettervest could theoretically be sold through the investor’s own brokerage if a buyer is found, but in practice these mini-bonds are not exchange-listed and thus quite illiquid. Bettervest focuses on a primary marketplace model: new project offerings are listed, usually for a fundraising period of a few weeks, during which investors can subscribe until the target is reached.

The platform provides tools like project filtering (by sector, country, status) and notifications (investors can subscribe to a newsletter or alerts for new projects). Each project page often includes an “Impact” section and sometimes short expert commentary or third-party validations (for example, if the project received a grant or support from a development agency, or an engineering study backing its projections).

Diversification assistance: While there isn’t an automated diversification tool, Bettervest’s communications encourage spreading investments across multiple projects. The site’s FAQ and blog give tips on diversification and note that investing small amounts (e.g. €50–€200) in many projects can reduce risk exposure.

Account management: Investors must complete a one-time KYC/ID verification (via online PostIdent or video identification) when making their first investment. Once verified, they can invest in any open project with a few clicks. The platform provides portfolio reports for tax purposes: interest income and repayments are summarized, and German investors receive an annual tax statement (note: Bettervest does not automatically withhold taxes, so investors are responsible for declaring interest income).

Currencies and payment methods: Investments are typically made by SEPA bank transfer; some projects or the platform may also allow direct debit. Currently, everything is euro-denominated to avoid currency risk for investors – the borrowers bear exchange risk if they operate in local currency, or Bettervest and partners hedge it in the loan structure.

Mobile access: Bettervest’s website is mobile-friendly, though there isn’t a dedicated mobile app. Other notable features include a referral program (“Customers recruit customers”) where existing users can refer friends for bonuses, and periodic impact reports/news to keep the community engaged.

The platform does not provide insurance or buyback guarantees to investors by default (unlike some P2P lending sites); any guarantee is project-specific as described earlier. Overall, Bettervest’s functionality is straightforward and geared towards transparency – each investment is a direct engagement with a project, supported by documentation and updates, and investors have the tools to monitor their returns and impact over time.

Bettervest Fees and Pricing 💰

One of Bettervest’s appeals is its transparent fee structure – investors pay no fees to use the platform or to invest. Creating an account, browsing projects, and making investments are free of charge for retail investors; 100% of an investor’s principal goes into the project (aside from any payment transfer fees your bank might charge).

Revenue model: Bettervest earns its revenue from fees charged to the project owners (fundraisers). According to company disclosures, Bettervest takes a success-based commission of around 10% of the funded amount from the project side. For example, if a project raises €200,000, the project owner might pay approximately €20,000 to Bettervest as a platform fee (this is often factored into the project’s funding target or costs).

Ongoing service fees: In addition, Bettervest charges the project an annual service fee of ~1% on the outstanding loan principal. This annual fee covers the ongoing administration of the loan – such as processing repayments (which Bettervest handles via a paying agent bank), investor reporting, and any follow-up or monitoring. Notably, these fees align with industry norms for crowdfunding (many platforms charge 5–12% upfront to borrowers).

Investor costs: There are no hidden fees for investors:

• Interest rates listed on projects are net to the investor, and Bettervest does not skim any percentage of the interest.

• Investors do not pay any withdrawal fees – when interest and principal payments are made (usually annually), the funds are credited to the investor’s wallet or bank account without charges.

• Reinvesting returns into new projects is also fee-free.

• Exit fees don’t exist since there is no formal secondary market. The only “exit” is waiting for loan maturity.

Early repayment: In the event of early repayments by a borrower, Bettervest does not charge investors any penalty, though investors would stop earning interest from that point. Some projects may include early repayment fees that benefit investors (like a minimum interest guarantee), but this varies case by case.

Borrower-side costs: Bettervest may pass on third-party costs to project owners – for example, if a bond issuance requires paying agent bank fees or listing fees, the issuer (project) bears those. The platform’s terms and conditions (AGB) outline such charges.

Taxes: From an investor perspective, taxes are relevant. Bettervest itself doesn’t deduct German withholding tax, so German investors need to report interest income in their tax returns (subject to the 25% capital gains tax after the €801 exemption). Non-German EU investors similarly must report earnings under their local tax laws. No VAT is charged on investments.

Summary: Bettervest’s revenue model relies on the success of funding campaigns – this incentivizes the platform to carefully select quality projects that can attract investors. The clear separation of fees (projects pay, investors do not) and upfront communication contributes to Bettervest’s reputation for pricing transparency. Potential investors can take comfort that they won’t face surprise fees eating into their returns; the interest rate advertised is what they get, with Bettervest’s cut coming from the borrowers who benefit from the capital.

Negative Publicity about Bettervest ⚠️

While Bettervest has a positive mission, it has faced some challenges and criticisms over the years, mostly related to project outcomes and investor losses.

Early project defaults (2014–2017): Several African and developing-world projects defaulted in the early years, leading to real investor losses. One notable Trustpilot review in 2023 claimed an investor had backed 13 projects in 2016/17, of which 11 became insolvent and 2 stopped payments – resulting in a ~90% loss of their capital. Forum users on Finanztip also pointed out that the platform’s completed projects list once showed nearly as many “Ausfall” (defaults) as “getilgt” (fully repaid) in older cohorts. These defaults were often linked to external risks such as currency devaluations, political instability, or bankruptcies of German energy-efficiency startups.

Management acknowledgment: Bettervest’s CEO Marilyn Heib admitted in late 2022 that “in the beginning, about 10% of projects we financed went insolvent” and investors lost money in those cases. This prompted a major tightening of due diligence, the use of SPVs, and later the introduction of partial insurance guarantees. By Bettervest’s account, no projects financed since 2018 have gone insolvent – a claim consistent with recent track records, though it remains to be confirmed over the longer term.

Regulation and compliance: There have been no regulatory sanctions or warnings against Bettervest. The platform operates under BaFin oversight via Effecta GmbH, and it was even commended for compliance when adapting to EU crowdfunding regulations in 2019–2021. Stricter KYC and standardized disclosure documents were introduced without incident.

Communication and transparency: While Bettervest is seen as transparent, some investors have criticized the handling of defaults. Complaints on forums include a lack of timely updates and the very long wait times for insolvency recoveries in certain countries. In response, Bettervest now sends periodic email updates about recovery progress. Still, the lengthy and uncertain process of recovering funds in jurisdictions like Nigeria or Kenya has frustrated some investors.

Public perception: Trustpilot shows a middling rating of around 3/5. Negative reviews – particularly from those who suffered large losses in early projects – weigh heavily, while many satisfied users do not leave reviews. Sustainability bloggers and financial journalists tend to describe Bettervest as a “high-impact, high-risk” platform. Publications like Finanztip warn readers not to confuse these investments with safe savings products: investors should adopt a venture capital mindset and accept that total loss is possible. Some critics argue that those motivated purely by climate impact may be better off making donations, while those seeking returns should diversify broadly and size investments carefully.

Summary of red flags:

• Historically high default rate (~15% of projects overall, concentrated pre-2018).

• Risk of total loss remains, despite improved safeguards.

• Illiquidity: investments are locked in for years with no reliable secondary market.

• Investor frustration over slow communication during defaults.

Despite these issues, Bettervest has strengthened its credibility through strategic backing (Triodos Bank as shareholder), new guarantees, and a more rigorous selection process. The platform now balances strong impact credentials with a clearer acknowledgment of risks. Investors are reminded: don’t be swayed by the green mission alone – diversify across projects, invest only what you can afford to lose, and approach Bettervest as a high-risk, high-impact investment opportunity.

Would you like me to also create a balanced “Strengths vs Weaknesses” summary table for Bettervest (like a quick reference for investors)?

Bettervest Success Stories and Milestones 🎉

Despite the risks, Bettervest has many success stories and notable milestones that underscore its pioneering role in sustainable finance.

Growth and Reach: The platform has funded projects that brought solar power to off-grid communities, energy savings to schools and businesses, and even innovative cleantech startups that later scaled up. By mid-2021, Bettervest crossed 10,000 investors, reflecting strong public interest in impact investing. By late 2024, it had financed around 140 projects worldwide, channeling over €25 million into climate-positive ventures.

Award-Winning Impact: In December 2023, Bettervest won the prestigious German Sustainability Award (Deutscher Nachhaltigkeitspreis) in the finance category. This national award recognized its role in financing climate solutions and its socially responsible business model – a significant milestone, as Bettervest outperformed larger banks and financial institutions to secure this accolade.

Institutional Partnerships: A major success was building strong institutional ties. In 2018, Triodos Bank, one of Europe’s leading ethical banks, acquired ~20% of Bettervest’s equity – validating its business model and providing growth capital. In 2023, Bettervest partnered with the African Guarantee Fund, becoming the first crowdfunding platform to work with this development guarantor to insure loans. This was a breakthrough for de-risking African projects and enabling larger-scale funding.

Funding Its Own Growth: Bettervest has also used crowdfunding creatively for its own financing. In 2020, it raised an “Eigencrowd” loan from its user community, which was repaid in full with interest by 2022 – even through COVID-19 challenges. In August 2024, Bettervest ran an equity crowdfunding campaign on Crowdcube, successfully raising €210k at a €6M valuation. The company disclosed it was already profitable, making this a milestone that set it apart from many fintech peers still operating at a loss.

Project Success Stories: Numerous funded projects showcase Bettervest’s dual promise of returns and impact. A 2017 biogas plant in Kenya continues to pay 7% annually while providing rural communities with affordable energy. A 2019 Nigerian solar installation has reported strong output and timely repayments despite currency volatility. In Germany, Bettervest funded the retrofit of a cinema with modern heating systems – reducing CO₂ emissions sharply while returning 5.5% annually to investors. These examples highlight the platform’s “win-win” model: steady returns plus measurable social and climate benefits.

Recognition and Innovation: Bettervest was one of the first to let retail investors back energy efficiency projects (2013) and was awarded Ort im Land der Ideen in 2015 for innovation. It also received EU Horizon 2020 SME Instrument support to develop its technology and expand cross-border financing. Over the years, the platform has been featured in major outlets like ZDF, ARTE, Handelsblatt, and Die Zeit. Additional accolades include the Werkstatt N label from the German Council for Sustainable Development.

Summary: These milestones show Bettervest’s journey from a niche impact startup to an established, award-winning platform. Its combination of community growth, profitable operations, successful project exits, and respected partnerships with banks and guarantors gives retail investors confidence that, alongside the risks, many positive financial, social, and environmental outcomes are being achieved.

Is Bettervest safe and regulated?

Bettervest is a regulated platform in Germany – it operates under BaFin supervision via a licensed partner (Effecta GmbH). This ensures compliance with financial laws, but investments are not covered by deposit insurance. Safety depends on project success; while Bettervest vets projects carefully and has introduced guarantees, you can still lose money if a borrower defaults.

What returns can I expect on Bettervest?

Returns vary by project. Historically, investors have earned around 5–8% annual interest on successful projects. The platform’s average advertised return is ~7%. Each project lists its interest rate (typically fixed) – e.g. one project might pay 6% p.a. over 5 years. Remember, these returns are not guaranteed and past performance doesn’t ensure future results.

What are the main risks of investing through Bettervest?

The primary risks are: Borrower default risk – if the project fails or the company goes bankrupt, you could lose some or all of your money (this has happened in about 15% of projects historically). Illiquidity – you can’t easily sell or exit, so your money is locked for years. Subordination – many loans are subordinated, meaning in insolvency you’re among the last to be paid, increasing loss likelihood. Currency and country risk – some projects are in developing countries; currency fluctuations or political instability can affect their ability to repay (Bettervest sometimes mitigates this with guarantees, but not always fully). No guarantee or insurance – unless explicitly stated, there’s no guarantee fund protecting your investment (it’s not like a bank deposit). Each project carries a risk of total loss, so diversification is crucial. Also, returns are not compounding – if you don’t reinvest payouts, your money may sit idle. In summary, Bettervest offers high-risk, high-impact investments – never invest more than you’re willing to potentially lose, and spread your investments across many projects to manage risk.