Driven by the desire to protect their savings from current inflation, as well as to increase their wealth in the future, more and more people are becoming actively interested in topics such as financial literacy and investment.
In addition to traditional investments in stocks, bonds and funds, increased interest of small and novice investors is also observed in the so-called alternative assets. They are a popular way to diversify the investor’s portfolio and often include assets such as watches and other luxury products. A feature of alternative assets is that they are usually less liquid than traditional ones, but offer high returns.
Although alternative asset markets are no longer reserved for large players, smaller investors still face some constraints. They can be reduced to two main problems. On the one hand, buying luxury watches and other alternative assets for investment purposes requires a good knowledge of these products. Expertise in this field is an important quality that helps you choose luxury goods, the price of which has the potential to increase in the future and will bring you high dividends.
The other significant limitation is their accessibility. Unfortunately, finding such exclusive watches is complicated, and in addition, I must emphasize that their prices start at several hundred thousand euros.
A European startup aims to eliminate these restrictions and democratize access to alternative assets. In the following lines, we will look at what Konvi is and how this platform works.
IMPORTANT: Before we go any further, it is important to note that this article does not constitute investment advice. I recommend that you do thorough research and assess the risk before investing through Konvi or another similar platform.
What is Konvi?
Konvi is a European startup platform whose mission is to democratize the alternative assets market by allowing smaller investors to add rare luxury goods to their portfolios. How is this possible?
The main idea behind the platform is the so-called crowd-owning. Explained in plain language, this means that a product can be owned in part by multiple investors. The advantage that Konvi provides in this way is the significantly lower initial investment you have to make to become a co-owner. In the case of Konvi, the minimum investment starts at € 250. This makes investing in luxury watches and other similar goods significantly more affordable.
Currently, the alternative assets offered by the platform are limited to exclusive watch models and alcoholic beverages. The founders of Konvi plan to offer access to other types of exclusive goods with potentially high returns in the future.
The platform started operating on 01.07.2020 in Berlin. According to Crunchbase, the company has received investments from Invest Northern Ireland (01.03.2021) and APX (01.09.2021), and the amounts have not been announced. The team is small and young, and the platform has not yet proven itself in time. This makes Konvi risky for investment at the moment, but the model is innovative (I have invested a small amount to test it).
What assets can you invest in Konvi and how are they selected?
Konvi allows you to own high-end luxury watches with a minimum price of € 100,000. One of the logical questions you will probably ask yourself is how exactly Konvi selects rare models of luxury watches that have the potential to bring a high return on investment in the future.
To this end, the platform has partnered with The WatchFund. This is a popular fund created by the watch expert Dominic Khoo in 2013. The fund provides its investors with access to limited and rare watches.
The models they choose for investors fall into several categories: hard-to-reach and extremely limited models, exclusive watches purchased before they are put on the market, models with historical value, and watches with underestimated value, which are expected to increase their price in the future.
The expected return of The WatchFund is 20% per year (according to them). I note that these are estimates based on all previous years since the fund’s inception. So far, the lowest annual return on the fund is 11%. For example, the FP Journe Resonance watch, bought in 2016 for 53,900 SGD, sold for 150,000 SGD in 2020. Keep in mind that every investment carries risks and this return is not guaranteed.
The fund has a network of over 9,000 collectors who buy watches directly from investors. Due to the high investment in The WatchFund, which starts at a minimum of € 250,000, the customer base is very limited to very rich people.
The partnership between Konvi and The WachFund allows investors who use the startup platform to access this type of watch, but without having to invest a quarter of a million euros.
Another opportunity that investors in the platform currently have is to diversify their portfolio with investment wines. Konvi has partnered with CultWines to offer its customers exquisite and carefully selected luxury wines. Founded in 2007 in the UK, the fund allows investment in premium and carefully selected wines, with an initial investment of £ 25,000. Konvi consumers have the opportunity to become co-owners of this type of wine, investing a significantly lower amount. CultWines has a historical return of 8.9% per annum, and the waiting period before the asset is sold varies between 1-10 years.
How to invest and what are the steps to register in Konvi?
To invest through Konvi, you must first download the application and go through a few basic steps (registration can also be done through their website) to verify your account. When registering, you can also use a code to receive additional privileges. You can register via this link https://konvi.app/refer-and-earn/?code=K4Z83E or use promo code K4Z83E to receive a 10 € first investment bonus.
When you register, you will get access to the platform and you can see assets that are currently undergoing crowdfunding. We must clarify that you will not know in advance what specific model you are investing in, but you will know all the other details: its price, the expected return, appreciation period, etc.
Here it is important to explain another feature of how the platform works. You and all other verified co-owners invest to purchase the asset of your choice. Once the goal of financing the item is achieved, you will receive an official notification through the Konvi app.
As soon as the group financing is over, you will become a shareholder in a company (SPV) whose purpose is to own, manage and sell an asset. The percentage of your participation in the company is determined based on the amount of investment made. As already mentioned, the minimum value of the investment is 250 €.
The asset will then be legally owned by all shareholders involved in the crowdfunding campaign, while the asset will be acquired and safely stored and insured with Konvi’s partners.
Then begin the appreciation period, after which the watch will be sold (presumably at a higher price). This is also the moment when all shareholders will receive a return on investment.
In general, this is how Konvi works. The great advantage of this platform is that it manages to make luxury watches an affordable asset that anyone can include in their portfolio. If this opportunity has attracted your interest, I recommend that you get acquainted in more detail with the requirements and the way the platform operates and carefully consider the risks associated with your investment. The company is still new and yet to be proven.