Dubai: Crowdfund your startup – Dubai’s efforts at opening up new funding channels for its entrepreneurs is building up scale.
The ‘Dubai Next’ project allows these entrepreneurs to go online and make themselves seen and heard by prospective investors. More than 540 campaigns have been launched and of which 44 have gone live.
If earlier people with ideas had to secure funds from banks and specialist investors, “what we have done is somehow democratized this more,” said Abdul Baset Al Janahi, CEO of Dubai SME. Dubai Next has received Dh27.7 million in funding requests so far, along with 72 contributions from 58 supporters.
Easier for talent
“In the post-COVID era, talent and capital are likely to be even more footloose, especially in target sectors such as digital and creative industries,” said Scott Livermore, Chief Economist at Oxford Economics Middle East. “Therefore, simplifying the startup process will improve Dubai’s competitiveness in this area.
“Recent moves in Dubai and across the UAE are aimed at encouraging innovation - and often such innovation is through startups and SMEs.”
Crowdfunding model used
Dubai SME has used an “all-or-nothing” model to protect campaigners and to minimize risk for everyone. By not releasing funds unless a project meets its goal, this ensures that Dubai Next sponsored entrepreneurs have enough money to do what they promised and they are not expected to complete a project without the funds necessary to do so.
What are the fees?
Dubai Next is a non-profit platform, and there are no registration fees. However, a 5 per cent service fee is charged for successfully funded projects
How is this platform different?
It is the first UAE-based crowd funding platform for startups and is operated by Dubai Government. Unlike other platforms, campaigners keep 100 per cent ownership of their project; there is no loss in equity or any form of ownership in shares or profit.
Currently, the website only supports UAEPASS, a national digital identity solution.
Once the funding goal reaches 100 per cent, the amount will be released through Dubai SME, which will provide the necessary support to launch and grow the business - from trade license issuance to training and incubation.
“We expect to see a flood of young creatives taking advantage of a previously unavailable stream of funding that will expedite their growth,” said Scott Cairns, Managing Director at Creation Business Consultants.
A crowdfunding platform allows entrepreneurs to reach thousands of potential investors from that single platform, drastically increasing the options.