6 platforms that help Middle Eastern entrepreneurs secure the funding they need
- 11 October 2018
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The promise of financial independence and of pursuing the work they love and enjoy is leading thousands of Muslim youths around the region to try their hand at entrepreneurship. The startup scene in the Middle East is booming, and it shows no signs of slowing down; reports suggest that, in the UAE alone, startup funding is expected to break a record $1 billion in 2018.
Thanks to growing governmental support, entrepreneurs in the UAE now have access to a commercial license program specifically for startups with an operational license, a registered address, and the option to apply for four residential visas for a nominal fee. There are also a variety of government-sponsored funding initiatives, such as the latest Mohammed bin Rashid innovation fund, that aim to secure access to finance for young businesses.
Passionate entrepreneurs in the UAE now have a choice between government-sponsored funding programs, peer-to-peer lending platforms, crowdfunding platforms, startup accelerators and a plethora of seed-funding programs. Depending on your target market and the type of startup you’re building, some funding options may be more appropriate than others.
“The ideal projects that fit crowdfunding usually contribute positively to the society, as people then have a vested interest to make them a reality,” said Abdallah Absi, founder of Zoomaal, one of the first-ever crowdfunding platforms in the region. That means that if your venture is social, crowdfunding is a very good option.
Here are some of the platforms that are making it easier for Arab and Muslim entrepreneurs to find the funding they need for their startups:
1. MOHAMMED BIN RASHID ESTABLISHMENT FOR YOUNG BUSINESS LEADERS
Established in 2002 as a part of the Department of Economic Development in the Government of Dubai, the Mohammed Bin Rashid Establishment for Young Business Leaders, also known as Dubai SME, offers support, information and outreach for small and medium-sized (SME) enterprises in the UAE. The Fund, a part of the agency, is a dedicated funding program that finances innovative pilot projects from the SME sector by Emirati entrepreneurs.
In July, Dubai SME opened The Co-working Popup, its latest business incubator following its introduction earlier this year of new regulations for incubators and business accelerators operating in the emirate. The new regulations aim to provide support and guidance to SMEs and to encourage business incubators and accelerators to invest in fourth-generation technologies in Dubai.
The world’s first independently certified Shariah peer-to-peer finance platform that is officially authorised and regulated by the Dubai Financial Services Authority, Beehive was launched in 2014 by serial entrepreneur Craig Moore and is based out of the Dubai International Financial Centre.
The platform helps in financing transactions within a community of more than 7,000 investors and startups and entrepreneurs seeking funding. To date, Beehive has facilitated funding of almost AED 250 million and has supported more than 300 businesses funding requests.
“Providing SME finance is key to establishing a thriving SME ecosystem, which in turn helps SMEs increase employment, deliver globally competitive innovation and contribute towards sustainable economic growth,” said Moore.
The company works with Islamic legal advisors and Islamic finance industry experts to guarantee that all investments are Shariah-compliant. All businesses applying for finance are meticulously checked to ensure that the business activity and use of funds comply with Shariah principles.
3. INNOVATION 4 IMPACT
The creation of the Dubai Silicon Oasis Authority (DSOA) and the Dubai Islamic Economy Development Centre (DIEDC) in strategic partnership with Thomson Reuters, Innovation 4 Impact is a competition open to entrepreneurs of all faiths from around the globe.
Taking place at the Global Islamic Economy Summit (GIES), the competition aims to support startups across the Islamic economy’s digital sector as well as to serve as an incubator for them.
During the last GIES in 2016, US-based Divine Connect, which manufactures translation handsets for pilgrims performing haj and umrah, received a cash prize of $20,000 plus business incubator services worth more than $10,000, including free office space for a year in DSOA’s Dubai Technology Entrepreneur Centre.
The next edition of GIES will take place at the end of October this year.
Founded in 2012 by Egyptian entrepreneur Tamer Taha, Yomken is the first crowdfunding and innovation platform that specifically targets SMEs innovating in areas that mainly involve low-tech and informal manufacturing industries, such as creative industries, handicrafts, materials for workshops as well as artisanal goods.
“If we pave the way for open innovation among artisans and manufacturing site owners, by spotting the challenges they face and sharing them with everyone on the Yomken platform, we will find the right ideas, and we will find the best talent to face those specific challenges,” Taha said at Yomken’s launch.
Yomken also features a marketplace that links local creative talents to technical solutions and service providers that can help them go to market and overcome their industrial challenges.
The platform cooperates with local partners and organizations that support SMEs and operates in Egypt, Saudi Arabia, the UAE, Tunisia, Jordan and other countries in the region.
Based in Lebanon, Zoomaal started in early 2012 as one of the first-ever crowdfunding platforms in the Arab region. It was founded by Abdallah Absi, one of Lebanon’s Top 20 entrepreneurs of 2013.
Zoomaal encourages Arab entrepreneurs and creatives, including artists, filmmakers and authors, to submit their project pitches for funding by supporters from all around the world.
Supporters can contribute any amount they like to projects of their choice, and the startups’ founders offer rewards to supporters based on their contributions. The initiative is supported by four major Arab investors: Wamda (UAE), Middle East Venture Partners (MENA region), Cairo Angels (Egypt), N2V (Saudi Arabia), and Sawari Ventures (Egypt).
The concept of a dedicated real-estate crowdfunding platform is still very young in the Middle East region, but Durise is changing all that. Launched in Dubai in April 2014 by Waleed Esbaitah, it allows people from the region to invest any amount of money in any of the real-estate properties featured. The platform offers a variety of properties as well as the flexibility of choosing the duration of the desired investment.
Thanks to the platform, investors earn from properties that are normally only available to more cash-rich investors. The “raise investment” option, which will soon be added, may offer a means for real-estate startups and smaller developers to raise investments through crowdfunding to build bigger projects that would otherwise be unfeasible.
Esbaitah cited Millennials as the reason for launching the platform. “The makeup of the Middle East is overwhelmingly young, which translates into technology-savvy investors who are comfortable with technology and the concept of crowdfunding,” he said. “At the same time, for many young investors, the price point for entry into the real-estate market is far too high, which is why Durise is the perfect option for them.”
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