April 14, 2024

Uncovering the five topmost reasons of why the SMEs or firms can shift their base towards Crowdfunding


Only time will prove that if in case more firms or SMEs would follow the instant verdict taken by the UAE based Udrive for inviting a large chunk of investment from the general public or large number of individuals as an initial part of its Series-A Fund drive or for accounting better finances.

This may be the most uncertain times as the global scenario finds itself in middle of a huge economic crisis that is all set to be a never-ending COVID-19 Pandemic, however, it also provides plethora of investment opportunities that can be taken into core objective towards attainment of better finances or funding round.

Few of the tools that are hugely lucrative for raising adequate funds are assets like Gold, while the finance continues to flow through stocks, bonds, even art as well as characteristic Cars. Another kind of investment opportunity that has hugely become popular is crowdfunding-wherein the businesses get alongside the cooperation of general Public or large section of individuals for keeping a check on their financial status, and wherein it acts as a huge potential tool with the powerful aid provided within the Internet revolution or tech savvy era.

The UAE-backed Pay-Per-Minute Car rental Service giant Udrive has opened up a part of its business towards public as its latest initiative for inducing fresh capital within the firm. Udrive has around a potential of One Lakh and Eighty thousand registered consumers across Dubai, Abu-Dhabi, Sharjah as well as Ajman and has partnered the initiative of crowdfunding with the crowdfunding outfit Eureeca, providing anyone with the prospect to invest as a part of a Series A round of funding for the start-up.

With the return for an investment, the crowdfunding investors are provided with huge range of benefits, in form of a director financial returns as well as other gains. Pondering into this topic, the query arises is that why is it hugely turning into so popular?

The reasons are as follows: –

Affordability: –

The whole concept is easy by by means of a dedicated platform that supports the equity crowdfunding process, like the Eureeca Wefunder, StartEngine or Fundable. A lot of such firms don’t charge up a set-up fee and yield a small percentage of funds raised.

Competence: –

By optimally utilization of a crowdfunding platform for ranging a huge audience it frees you up to emphasize upon structuring your business rather than trying to figure out how to discover the great investors, get an introduction and present your terrain.

Brand promoters: –

Your investors can be diplomats for your business. With crowdsourcing, you can figure a great team of investors, which means you’ll have many people out there chatting up for your business.

Market research: –

Your investors are the initial adopters of your visualization and your product. If they don’t like something about the company or service, they can provide valuable response, which can allow you to make essential variations without the brand being dented.

Control: –

In terms of equity crowdfunding, the establishment valuation remains under your control and you can determine the share prices. Also, because it is made up of numerous minor investors, there will be no majority stake to influence decisions.

Hasib Khan the CEO as well as founder stated that “Potential Investors can actively contribute as little as $500 for the firm’s expansion initiative, and as such in present situation, there is absolutely no upper limit that can be contributed or provided when it comes to the overall investment figures.

He also was prompt to state that “Way back three years ago in 2017, there is a positive association and talks that happened with their crowdfunding partners Eureeca, and who as founders as well as their core management has always shown their keenness to get connected with them and which has hugely benefitted them as lot of their own workforce, individuals are optimally utilizing the technology and the mobility generated and that they as partners are quite amazed that we are participating in the crowdfunding prospect which seems a lot optimistic till date and they have huge expectations of securing to play their part in the crowdfunding round.”

As per the report by KPMG, around half of present car owners in the present situation will no longer wish to own a vehicle within 2025, thereby depicting a definitive surging trend of on-demand transportation services. A further report by ResearchAndMarkets, revealed the car rental market is predicted to expand at a CAGR of 11.6 percent from now until 2022.

Khan said he hoped the funding round, which is due to close in the next couple of months, can generate as much as $5m, which will help boost the fleet in the UAE up to 550 vehicles and fund expansion plans, which a view to entering Saudi Arabia or Turkey by the end of the year.

He also added that “They’re basically fortifying those funds to bounce back into the expansion drive mode, to get back into developmental aspects, as they already have intended back in March 2020 before the coronavirus came. Their core intention is to instantly grow back the fleet with the funds that they would generate, to what it was and above that.”

“The other initiatives they have outside of the UAE is expansion plan into Saudi Arabia and into Turkey. They have robust agile partners who are going to aid them with this expansion. They have prevailing partners who will be able to take them there.”

“Their core intention is to get into one of those two countries before the closure of this year, basically within the next two months. They have already finished requirements regard licensing and they’re ready for it, the only thing that needs to wrap out is the funding round for them to be financially better to opt for this step.”



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