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How can FinTech Companies Raise Capital and Secure Investment?

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The UAE is emerging as a global fintech hub, with insights firm Deloitte noting that ‘across the GCC, banks in the United Arab Emirates have taken the lead in embracing fintech’; a move that has thrust fintech startups to the forefront of the economy.

However, the current global landscape has created a new challenge. With many organizations choosing to shift their financial services to the digital space in a bid to reduce reliance on face-to-face transactions, fintech firms now need to do more; they need to ensure they’re in a position to expand to meet the growing demands of their customers. These businesses are actively seeking new ways to raise capital, secure investment, and grow rapidly. But just what are the best ways to achieve all of this?

  1. Crowdfunding

The UAE government is yet another example of the emirates’ willingness to embrace fintech, and new regulations have been introduced permitting the use of crowdfunding platforms for businesses to raise capital and secure investment. Eureeca is one of most well known platforms in the UAE today, with 90 day campaigns and no target limits.

  1. Loans

Traditional bank loans are an option, although the rejection rate for SMEs can be as much as 70%. However, there is an alternative. Known as peer-to-peer (P2P) lending, these platforms allow for businesses to borrow from individuals or other organizations. As of 2019, more than 250 funding requests had been approved through the Beehive site.

  1. Venture Capital Networks

The number of venture capital networks in the GCC has been growing at an almost unprecedented rate. It has been reported that, since 2017, at least six dedicated fintech venture capital funds have been launched across the UAE and Bahrain, collectively raising over $1.5 billion in capital for promising fintech institutions.

  1. Local Events

The annual FiNext conference in Dubai is just one example of the many local events that could help fintech businesses secure future funding and learn from the best in the industry. Research suggests that only 14% of UAE fintech investors come from outside the area, highlighting the vital importance of making solid local connections.

  1. Investment Programs

Specialized investment programs and fundraisers are also worth looking into. In 2020, it was revealed that the Dubai International Financial Centre (DIFC) had invested $100 million into local fintech startups under their new support program. The StartAD accelerator also launched the Runway Grant to help raise funds for local businesses.

  1. Personal Investments

Raising capital and securing investment doesn’t have to be complex. Fintech firms can look closer to home for the help they need, reaching out to friends and family for financial support to grow and develop. Investors are usually offered something in return, including shares in the organization, decision making privileges, or honorary titles.

Investors Are Looking for New Opportunities

The good news for fintech businesses is that today’s investors are actively seeking to direct their funds into this rapidly emerging industry. In 2017, it was reported that 30 fintech firms in the Middle East raised almost $80 million. By 2022, it is estimated that more than $2 billion will be raised by upwards of 465 local fintech organizations.

While the current global situation has solidified fintech as a vital sector, it has also created a new and urgent need for fintech firms to adapt to meet the rapidly evolving needs of their clients. For many, this will mean raising capital and securing new rounds of funding to make things happen. These 6 methods for boosting financial resources can significantly help to provide promising businesses the resources they need to thrive.

 

 

 

 

Hicks Crawford is an Outreach Media Editor for the past 10 years, He's worked closely with clients from all over the world to help them get more results from inbound marketing and blogging at 9listed. Through experience, He has mastered some of the most powerful Tech, Content Marketing, and Social Media Platforms.

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