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Wed 8 Apr 2015 03:45 PM

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Eureeca.com receives formal UK approval

Financial Conduct Authority has given the green light to the crowdfunding website, allowing SMEs based in the Middle East to raise funds from UK investors

Eureeca.com receives formal UK approval

Crowdfunding platform Eureeca.com has obtained approval from the UK’s Financial Conduct Authority (FCA) which highlights the high standard of investor protection controls deployed by the company and opens new opportunities for SMEs.

The approval of the UK’s financial regulatory body, which among others regulates The Royal Bank of Scotland, Citibank, JPMorgan Chase Bank and Morgan Stanley, will open up additional cross-border investment opportunities for businesses and investors.

“This is a landmark development for Eureeca, and we are very pleased that our systems and investor protection controls passed the rigorous scrutiny applied by the FCA,” said Chris Thomas, the co-founder and CEO of Eureeca.

Thomas added: “As crowdfunding is estimated to have raised over $5 billion in 2014 alone, and with the size of this market projected to reach $90 billion in ten years, the potential in this space is clearly enormous.

“With the new regulation and the credibility it provides, Eureeca will become more appealing to institutional investors and family offices, and interest from these investors will open doors to funding larger SMEs with bigger requirements.”

Launched in 2012 by experienced investment professionals, Chris Thomas and Sam Quawasmi are aiming to improve online exchanges between Arab businesses and the crowdfunding platform offers early-stage businesses and SMEs an opportunity to raise capital, in exchange for equity.

The first business to raise capital through the website in exchange for equity was Nabbesh.com, the region’s first virtual skills marketplace, which reached its funding target only 12 days after it first launched its search for capital on the platform.

Nabbesh’s funding proposal, which called for a minimum investment of $100 and awarded each investor a share in the business, closed its funding round with 23 investors 12 days later and was considered one of the quickest success stories among all crowdfunding proposals globally.

Commenting on the geographical opportunities that the new regulations may create, Quawasmi, said: “Businesses in the region seeking to expand into the UK will be able to secure capital through investors there.

“Similarly, UK- and Europe-based SMEs with ambitions of entering the Gulf can now access capital and expertise from investors in the region, and by engaging with local investors and obtaining local capital these SMEs would have an easier time with their expansion plans.”