By Claire Valdini
Eureeca anticipates up to 100 local businesses will raise capital through the website
UAE-based crowd funding website Eureeca expects 100 local businesses to successfully raise capital via its website during the first year of operation, its co-founder has said.
The website, which plans to launch in September with ten companies, has received enquiries from 65 firms looking to raise capital in the last week.
“We are looking to launch the site with around ten businesses and we would expect that once we hit critical mass over the first year we hope to get around 15 businesses per month,” Sam Quawasmi told Arabian Business.
“Of that we are expecting around half (40-50 percent) to get funded so in terms of the opportunities we would hope in our first year to help 100 businesses reach their funding,” he added.
Crowd funding, a capital-raising strategy in which investors buy small stakes in ventures through various websites, has become an increasingly popular way of raising money for small to medium sized companies.
Would-be-investors can quiz companies about their growth strategy online using social networking platforms such as Facebook and Twitter.
Eureeca said it will charge companies a flat rate of US$250 to cover third party compliance fees and five percent of the total funds raised if a company reaches its target. No funds are released unless a company successfully reaches its target amount.
Several companies have set up regional crowd funding websites in recent weeks. Dubai-based Aflamnah, a crowd funding imitative aimed at helping independent filmmakers and artists raise capital for future projects, launched last week.
Eureeca said it expects a range of start-ups and well-established companies to apply for funding amid a shortage of liquidity in the region.
“We’re expecting funding pitches all the way from ideas to very established businesses but the vast majority that come online will be going concerns, between one and five years [old] who have proved themselves,” said Quawasmi.
“The market is very right for this, if you are a business owner looking to raise funds it’s very difficult: banks aren’t lending [and] venture capitalists are moving to much larger deals, so there is a very big gap that Eureeca.com provides for,” he added.For all the latest tech news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Revolutionary concept, I love it! As a private equity investor, I foresee crowd funding to take over venture capitalism as a new form of fund raising. Congrats to the two gentlemen.