Dubai-based company looks to fill the gap of funding for startups

Suparna Goswami Bhattacharya

August 13, 2015: Ask any startup what is their biggest hurdle and more often than not they will unanimously say funding. The story is the same in every country and, more so, in countries where the startup ecosystem has just started to evolve.

Despite venture capitalists, tech giants like Google, Microsoft among others coming forward to invest in startups, there exists a huge gap. Hence, online crowdfunding platforms are gaining traction as they allow startups to reach out to a larger audience.

Sam Quawasm, co-founder and MD,
One such platform is Eureeca, a Dubai-based crowdfunding company. It acts as the bridge that brings together people looking to invest in SMEs and businesses requiring capital. “We connect investors with businesses and facilitate the equity investment process all the way to the issuance of shares. For investors, we improve deal flow by providing steady access to exciting, vetted businesses,” says Sam Quawasm, co-founder and managing director, Eureeca.

When it comes to businesses looking for investors, Eureeca ensures that they are fit for funding — their financials, business plans and pitch are well conceived and executed. “Additionally, they get access to our network of over 10,000 investors.”

Platforms like Eureeca pretty much allow anyone to invest, alongside angel and institutional investors, in businesses with potential for high yield.

For businesses, efficient and convenient access to capital — the lack of which is one of the most prominent reasons for failure — is the primary goal and benefit of using equity crowdfunding to raise funds.

Additionally, unlike debt financing, equity crowdfunding does not entail taking a loan or issuing bonds. “Taking a loan or issuing bonds require regular interest payments, which can affect a young business’s cash flow. This model allows investors to buy stakes in businesses, or for businesses to raise funds by selling off company shares. It is essentially the private equity investment process brought online,” says Quawasm.

“The concept is really taking off globally. In fact, the industry grew 182% in 2014, and helped raise $1.1bn for businesses across the globe. The United Kingdom has established itself as the global leader in equity crowdfunding (year-on-year growth in the UK has been around 400%).”

Startups like Nabbesh, which connects freelance talent with job opportunities, successfully raised funds on Eureeca and since then tripled its user base. Similarly, Search in MENA, a B2B marketplace that helps businesses increase their online presence, provided the first exit for investors using the Eureeca platform.

Eureeca now wants to reach out to startups and businesses in Oman. “Oman is an emerging SME ecosystem, and as it begins to mature, we think that equity crowdfunding can — just as it does in other markets — serve as ideal means of helping Omani SMEs secure the funding they require to develop and scale,” says Quawasm.