The courts are circling real-estate platforms, but the real issue may be the product they built the market on. Lessons from an ongoing court case in Germany.
Germany’s real-estate crowdfunding sector is having its post-boom reckoning. Literally. A cluster of legal disputes involving platforms has brought uncomfortable scrutiny to the sector. Investors are suing. Courts are signalling scepticism. Assets have changed hands. Insolvencies have surfaced. The market is just short of mayhem.
It would be easy to frame this as a story about individual platform failures. Blame the managers. But that misses the real issue. More accurately, this is a story about a flawed financing structure that defined an entire market cycle: the qualified subordinated loan, or Nachrangdarlehen.
For a decade, that instrument powered Germany’s crowdfunding boom. Now it sits at the centre of a legal stress test as the real estate market folds. And this is not just a property problem: the risks inherent in the product extend to all innovation and start-up investments offered under similar structures.
Happening right now
The most closely watched proceeding is unfolding in Hamburg, unfolding as of this week, where investors in a stalled development are pursuing claims linked to an offering via Exporo. Judicial signals suggesting substantial settlement discussions may be appropriate have been widely interpreted as an indication that courts are scrutinising risk disclosure practices closely.
The debate is not about whether real-estate projects can fail. They can, and do. The question is technical and consequential: did retail investors fully understand that they were subordinated creditors, ranking behind banks and secured lenders in insolvency scenarios?
In structured finance terms, the risk was arguably explicit. In retail marketing terms, it may have been less intuitive, as early readings of the court hearing suggest.
Exporo today operates under the EU’s harmonised crowdfunding regime, ECSPR. A good and professional regulatory rule book. But the offerings under dispute originate from the pre-harmonisation era, when Germany’s national framework allowed considerable flexibility in structuring subordinated debt products. The litigation is, in effect, a retrospective audit, not just of Exporo, but of the products still sold by most German so-called crowdfunding platforms.
The Paradox of Harmonisation: A Loophole in the Heart of Europe – Germany
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Consolidation and Asset Redistribution
The insolvency of EV Digital Invest in 2025 marked another inflection point. Once associated with the Engel & Völkers brand, the platform saw parts of its viable assets acquired by Bergfürst and Exporo, while unresolved exposures remain tied to projects financed through subordinated loans.
Several lower-court rulings have sided with investors in specific disclosure-related disputes. Again, the argument in these court cases is not that subordinated loans are generally unlawful. The question is whether the economic implications of subordination were clearly communicated to non-professional investors.
When property markets were rising and refinancing was abundant, these structural details attracted little attention. As refinancing conditions tightened, construction costs rose, and liquidity thinned, the hierarchy of creditor claims moved from theoretical to tangible. Subordination became real. Goodbye, dear investment.
Zinsbaustein’s merger into WiWinn illustrates another dynamic: consolidation and repositioning, cutting operational overheads. The successor entity also operates under the ECSPR framework, distancing itself from earlier practices. But the reputational legacy of the subordinated-loan era lingers.
Economic stress for platforms is not unique to Germany. Across Europe, platforms that expanded rapidly during periods of cheap capital are now navigating the consequences of tighter credit cycles. Germany’s distinction is the degree to which its market standardised around a single product type, and potentially one that was not fit for retail investors.
Nachrang: The Wrong Model
The appeal of the qualified subordinated loan was structural efficiency. Under Germany’s Vermögensanlagen framework, platforms could structure real-estate investments as subordinated debt, avoiding full securities prospectuses while offering fixed interest rates attractive to retail investors.
The trade-offs were embedded in the capital stack:
- Senior lenders held collateral and priority.
- Subordinated lenders, the crowd, stood behind them.
- In distress scenarios, recoveries were uncertain at best.
For years, buoyant property valuations masked that asymmetry. Development timelines extended, projects refinanced, interest payments were met. The model appeared validated. But it was not stress-tested. When the market turned following Covid, subordination ceased being a legal technicality and began determining outcomes for retail investors.
The European Crowdfunding Service Providers Regulation (ECSPR) introduced a harmonised regime across the EU. The intent is simple: reduce fragmentation and strengthen investor understanding. ECSPR does not eliminate risk or guarantee repayment, but it imposes uniform disclosure and supervisory clarity, which is why opting out now can signal operational cost or lack of professionalism. Yet most German platforms avoided transitioning.
As of 2026, only Bergfürst, Exporo, and WiWinn seem to hold active ECSPR licences. The majority of German platforms, even those under familiar bank brands, opted out. The market is confronting yesterday’s product design under today’s transparency expectations.
The Association Question
One striking feature of this recalibration is the silence of sector associations, particularly the Bundesverband Crowdfunding (Digital Invest Germany). While individual platforms have responded to claims and insolvencies, there has been little coordinated industry communication and no communications on the associations website on:
- The structural risks of subordinated products
- Legacy remediation approaches
- Differentiation between Nachrang-era offerings and ECSPR instruments
In other European markets, trade bodies have actively framed post-crisis adjustments. In Germany, courts are setting the narrative. This silence may prove costly: reputational damage rarely distinguishes between product generations. The failure may be, in part, self-made. A feast for consumer protection activists.
A Structural Correction
It would be reductive to cast these cases as a morality play. Subordinated loans are, for now, legitimate instruments in Germany. Retail participation in development finance is not inherently flawed. Crowdfunding remains an important channel for SMEs and projects, investing over €4bn across Europe in 2024.
But Germany’s experience illustrates a lesson for all alternative finance markets: when a sector standardises around a product that shifts structural risk onto retail investors, downturns translate technical subordination into legal and political scrutiny.
The recalibration under way is not a collapse. But it is a correction. Platforms operating under ECSPR are now subject to explicit categorisation, standardised disclosures, and, at least on paper, a more transparent capital stack. The remaining question is whether the sector treats court cases as isolated legacy disputes or as an opportunity to articulate a clearer, more durable financing model.
Because if the product remains misunderstood, no amount of platform rebranding will prevent the next cycle from ending in the same courtroom.
Meanwhile, competition from the rest of Europe is watching closely: new entrants are beginning to explore Germany’s investor base and opportunities, ready to offer alternatives where the incumbents’ reputation has been shaken.
