Crowdfunding is usually associated with internet start-ups in urban hipster hubs – not with luxury hotels on romantic lakes.
But the firm that owns Schlosshotel Velden, a palatial pile on Austria’s lake Wörthersee, has just used the crowdinvesting platform Finnest to raise €2.5 million ($2.9 million) to fund future growth. Previously, the hotel’s claim to fame was its role in a popular Austro-German TV comedy drama from the 1990s.
Investor response was so enthusiastic that Austria’s Falkensteiner group, which owns 32 four-star and five-star hotels, easily reached its funding target. In fact, the offer was oversubscribed by more than €1 million within days.
Falkensteiner’s loan was the biggest crowdinvesting project of its kind among the German-speaking Mittelstand, or small and mid-sized businesses, said Günther Lindenlaub, founder and boss of Finnest. In fact, the hotel couldn’t have raised more cash because German rules, in force since 2015, limit each crowdfunding to €2.5 million unless the issuer opts to publish a detailed prospectus. (However, a German startup called Protonet raised €3 million through Seedmatch in 2014, when the two-year-old IT company enjoyed the hype about its secure cloud computers.)