Page Summary
This guide helps investors to find the best equity crowdfunding platforms in UAE. Equity crowdfunding is gaining popularity among public investors in UAE as it offer the potential for great returns. It also offers the option for portfolio deverzification, investing as an accredited investors and generating passive income.
With the growing number of fintechs (transparent as well as scams) that offer access to equity crowdfunding in UAE, it can be hard for investors to choose the ideal platforms for their financial goals and needs. By comparing, reviewing and evaluating different providers, the guide helps investors to avoid selecting platforms with high risk of losing money to fraud, lack of liquidity, and limited information on listed companies.
To help users make an informed decision, the best equity crowdfunding platforms are ranked, reviewed and compared considering availability of markets, minimum investments, auto-invest options, secondary markets, buy-back protection and average default rates.
The Top 6 Equity Crowdfunding Platforms in UAE
- Crowdcube – Best Crowdfunding Platforms in UAE Overall
- Pepins – Best for Guaranteed Funded Projects
- Funderbeam – Best For Secondary Market
- Invesdor – Best for Fixed-income Investments
- OurCrowd – Best For Pre-vetted Startups
- SeedBlink – Best for Tech Startup Investments
The 6 Best Equity Crowdfunding Platforms in UAE Reviewed
The best equity crowdfunding platforms in the UAE are reviewed in more detail below.
1. Crowdcube – Best For Investing in UK and Irish Businesses
Crowdcube is a British equity crowdfunding platform founded in 2009. The platform allows investors (accredited and non-accredited) to invest in promising British and Irish start-ups. The minimum investment requirement on the platforms is $10. Crowdcube has a great reputation with a score of 4,4 out of 5 stars on TrustPilot (across 7,204 reviews).
Crowdcube has a long standing history with more than 300,000 users that invested over £1 billion in over 1,200 start-ups. The platforms helped to fund 4 unicorns, including Revolut.
Key features of Crowdcube are listed below.
- Avg. Return: 6%
- Launched: 2009
- Minimum investment : $10
- Auto-invest: Yes
- Sec. Market: Yes
- Protection: Principal buy-back
- Bonus: No
- Average investment default rate: between 1% and 10%
- Markets/products offered: Early-stage and Growth companies
2. Pepins – Best for Guaranteed Funded Projects
Pepins is a Swedish crowdfunding platform founded in 2011. It is regulated by the Swedish Financial Supervisory Authority (SFSA). It allows users to invest in up-rising and promising companies around the globe. The platform accepts investors (non-accredited and accredited) from various countries including the United Arab Emirates. Pepins requires a minimum investment of $150. It protects users with a 100% buy back guarantee if a project listed on their platforms fails.
Pepins has a great reputation among UAE investors as it is featured in Arabian Business, Bloomberg, and several other prominent news outlets. It has over 58,000 users worldwide and it raised over $18 million and funded over a hundred companies.
Key features of Pepins are listed below.
- Avg. Return: 25%
- Launched: 2011
- Minimum investment : $150
- Auto-invest: No
- Sec. Market: No
- Protection: Guaranteed project funding
- Bonus: No
- Average investment default rate: 1%
- Markets/products offered: Startups and Growth companies
3. Funderbeam – Best Secondary Market Crowdfunding Platform
Funderbeam is an Estonian crowdfunding platform founded in 2013. It is regulated by the Monetary Authority of Singapore (MAS). The platform requires a low minimum investment of $250. Users have access to a variety of private market investments including startups.
Funderbeam offers high average projected returns of over 9%. It has a great secondary market that allows investors to sell their shares. Funderbeam has a solid track record with over $120 million raised across 79,000 investors and over 100 funded startups. Additionally, Funderbeam has great reviews on sites like TrustPilot, Glassdoor, and VCstack, making it a trustworthy equity crowdfunding platform for UAE investors.
Key features of Funderbeam are listed below.
- Avg. Return: 20%
- Launched: 2013
- Minimum investment : $250
- Auto-invest: Yes
- Sec. Market: Yes
- Protection: No
- Bonus: No
- Average investment default rate: N/A
- Markets/products offered: Startup companies across international markets
4. Invesdor – Best for Fixed-Income Investments
Invesdor is a Finnish equity-based crowdfunding platform founded in 2012. Invesdor allows users to make EUR-denominated investments starting from €100. Users can invest in a wide range of products including start-up companies, equity investments, and fixed-income products. The platform conducts strict due-diligence and only lists high-performing companies with real progress. The average annual interest rates on the platform are 6,5%.
Invesdor has a great track record, with over €320 million in capital invested across 515 financing projects from 124,000 users.
Key features of Invesdor are listed below.
- Avg. Return: 6,55%
- Launched: 2012
- Minimum investment : €100
- Auto-invest: Yes
- Sec. Market: Yes
- Protection: No
- Bonus: No
- Average investment default rate: 1,89%
- Markets/products offered: Startup companies, fixed-income products, equity investments
5. OurCrowd – Best For Pre-vetted Startups
OurCrowd is an equity crowdfunding platform founded in 2013. The platform has over 80,000 users and has raised $1,5 billion raised across 240 portfolio companies. The platform only accepts accredited investors. It requires a high minimum investment of $10,000. OurCrowd has a solid reputation among investors with mentions on sites like Investorjunkie and Glassdoor.
Key features of OurCrowd are listed below.
- Avg. Return: 20 – 25%
- Launched: 2013
- Minimum investment: $10,000
- Auto-invest: Yes
- Sec. Market: Yes
- Protection: Principal buy-back
- Bonus: No
- Average investment default rate: 5,2%
- Markets/products offered: Agriculture, cybersecurity, energy, enterprise software, FinTech, FoodTech, Fund, Healthcare, and Mobility companies in early, growth, and seed stages
6. SeedBlink – Best for Tech Startup Investments
SeedBlink (former Symbid) is an equity crowdfunding platform focusing on tech start-ups. It was founded in 2011 by Robin Slakhorst and Korstiaan Zandvliet. The platform has just recently acquired the equity crowdfunding platform Symbid. SeedBlink requires a minimum investment requirement of 2,500 EUR. The platform has a solid track record with over 530 million euros raised from over 71,000 investors.
Key features of Seedblink are listed below.
- Avg. Return: 9%
- Launched: 2011
- Minimum investment: €2,500
- Auto-invest: No
- Sec. Market: No
- Protection: No
- Bonus: No
- Average investment default rate: 7%
- Markets/products offered: pre-seed phase startup companies
Tips To Help Finding The Right Equity Crowdfunding Platform
Tips that help choosing the right equity crowdfunding platform in UAE are listed below.
- Transparency. Crowdfunding platforms with transparent information on listed companies (financials, business plans, management backgrounds) should be preferred. Transparency increases investors safety and helps maximizing their profits.
- Reputation. Choosing a reputable platform increases traders safety, security and helps avoid scams. Platforms reputation is based on the following criteria: number of users, positive user feedback, number of funded campaigns and success rate.
- Investments. Platforms with access to a wider range of trading instruments should be preferred. They allow investment deverzification and increase chances for profit.
- Liquidity. Platform’s liquidity options (options of investors to sell their investments) should be considered. Platforms that offer access to secondary markets where investors can sell their shares should be preferred.
- Due-Diligence. Platforms with a rigorous vetting process of listed companies should be preferred. They increase investors’ protection and increases chances for success by only listing high-quality companies.
- Fees and Charges. Types of fees that need to be considered include transaction fees, investor fees, and management fees. Platforms with lower overall fees should be preferred.
The Top Equity Crowdfunding Platforms Compared
The key features of the highest rated equity crowdfunding platforms in the UAE are compared in the table below.
| Platform | Crowdcube | Pepins | Funderbeam | Invesdor | OurCrowd | Seedblink |
| Avg. Return: | 6% | 25% | 20% | 6,55% | 20 – 25% | 9% |
| Founded: | 2009 | 2011 | 2013 | 2012 | 2013 | 2011 |
| Min. Investment: | $10 | $150 | $250 | €100 | $10,000 | €2,500 |
| Auto-Invest: | Yes | No | Yes | Yes | Yes | No |
| Sec. Market: | Yes | No | Yes | Yes | Yes | No |
| Protection: | Principal buy-back | Guaranteed project funding | No | No | Principal buy-back | No |
| Bonus | No | No | No | No | No | No |
| Avg. Default Rate: | Between 1 and 10% | 1% | Unknown | 1,89% | 5,2% | 7% |
| Number of Users: | 300,000+ | 58,000+ | 79,000+ | 124,000+ | 80,000+ | 71,000+ |
What Is Equity Based Crowdfunding?
Equity-based crowdfunding refers to a type of crowdfunding where investors receive equity ( ownership in a company) in return for their investments. This type of crowdfunding is often used by start-ups and smaller sized companies that do not qualify for other ways of raising capital from individual investors like IPOs and publicly selling shares.
Equity Crowdfunding from the Perspective Of Entrepreneurs
Equity crowdfunding is a great way for entrepreneurs, start-up’s and smaller sized companies that do not qualify for IPOs and public share selling to raise capital from individual investors.
Although crowdfunding may provide a good solution to fundraising and traditional loans, it does come with additional costs. It requires entrepreneurs to pay higher returns on the loans that they receive from crowdfunding investors. Equity crowdfunding additionally comes with extra costs for stuff that works on the investor community.
Equity Crowdfunding From the Perspective of Investors
Equity crowdfunding is a great investment for portfolio diversification and passive income generation. It is highly profitable, but also involves a high risk of losing money. Most small sized companies and start-ups don’t succeed after the funding period. It is important for investors to do their own due diligence before investing in startups through equity crowdfunding.
What Is The Difference Between Equity Crowdfunding and Crowdlending?
The key difference between equity crowdfunding and crowdlending is in the type of returns from the investment and the risk level. Crowdlending is a type of investment where investors lend money (invest in debt) to borrowers and receive interest in return, while equity crowdfunding refers to investing in companies (start-ups, smaller sized companies) with the potential for annual yield based on the company’s success.
This article lists the best crowdlending platforms in UAE
Is Equity Crowdfunding Legal in UAE?
Equity crowdfunding is legal in UAE, regulated by two primary regulators: the Securities and Commodities Authority (SCA) and the Dubai Financial Services Authority (DFSA).The SCA requires crowdfunding platforms to comply with regulatory requirements (due diligence standards, information transparency standards, risk disclosure) to obtain a license in UAE.
Risks of Equity Crowdfunding
The risks of equity crowdfunding investments are listed below.
- Misleading Information and Fraud. Although platforms follow strict vetting processes before listing a company, it can happen that some of the listed entities are fraudulent. To prevent investors from losing money, it is important to conduct own research in addition to due-diligence from the platform.
- Hack Attacks. Equity platforms are online platforms that work as an intermediary between investors and entrepreneurs. All transactions between parties happen through the platforms which makes them prone to hacker attacks.
- High Risk Of Losing Money. There is no guarantee that successfully funded sturt-ups will be successful. Companies that raise funds through traditional ways (IPO) receive professional assistance, whilst start-ups that raise funds through equity crowdfunding platforms often do not receive any help.
- Longer Turnovers. Start-ups and small businesses regularly take longer to generate profit. Equity crowdfund investments take longer to generate cash flow and make a profit.
Advantages of Equity Crowdfunding
Advantages of equity crowdfunding investments are listed below.
- Low-entry. Equity crowdfunding platforms allow non-accredited to enter the market with small investments from $10.Traditionally, only accredited investors had the opportunity to invest in promising start-up companies.
- High Returns. Equity crowdfunding is risky but has the potential for high rewards.
- Diversification. Equity-based crowdfunding allows investors to spread their investment across multiple companies to reduce the risk of losing money.
- Passive Income. Equity crowdfunding does not require the investor to be actively engaged after investing and allows to generate a passive income stream.
Conclusion
There is a great number of brokers in UAE offering different services and conditions, which makes it hard to find the ideal option for individual needs. Researching and comparing the different options can be stressful and require time and knowledge.
This guide does the hard work for you by comparing and evaluating the top choices for different types of traders and trading goals. The results of our analysis of the best equity crowdfunding platforms in UAE are wrapped up in the table below.
| RANK | BROKER | GENERAL | PLATFORM SCORE | BEST FOR | WEBSITE |
|---|---|---|---|---|---|
| #1 | Crowdcube | British-Irish startups | 4,9/5 | Overall | Official website |
| #2 | Pepins | Regulated by the SFSA | 4,9/5 | Guaranteed Funded Projects | Official website |
| #3 | Funderbeam | Regulated by the MAS | 4,9/5 | For Secondary Market | Official website |
| #4 | Invesdor | Strict due-diligence | 4,5/5 | Fixed-income Investments | Official website |
| #5 | OurCrowd | High minimum investment of $10,000 | 4,9/5 | Pre-vetted Startups | Official website |
| #6 | SeedBlink | 71,000 investors | 4,7/5 | Tech startup investments | Official website |
FAQ
What are the average returns on investments on equity crowdfunding projects?
The average annual returns of equity crowdfunding projects in UAE range from 15% to 25%.
Is equity crowdfunding risky?
With a success rate of only 50%, equity crowdfunding is as a high-risk investments.
Is equity crowdfunding recommended for beginners?
Equity crowdfunding does not require a high level of knowledge or experience from the trader and is a recommendable investment for beginners. As with all high-risk investments, beginners should arrange it across different crowdfunding projects.
Can non-accredited investors invest in equity crowdfunding projects?
Different crowdfunding platform have different requirements regarding accreditation requirements of investors. In general, crowdfunding platforms in UAE allow non-accredited investors to participate in crowdfunding projects.
Is Crowdfunding legal in UAE?
In 2022 the UAE Cabinet labeled crowdfunding activities for the private and business sector as legal. The SCA is the main regulatory authority of equity crowdfunding platforms in UAE.
What are the advantages of equity crowdfunding?
Main advantages of equity crowdfunding include high returns, personal fulfilment, investing as accredited (high-net worth) investors.
How is income generate with equity crowdfunding taxed in the UAE?
Profits that individuals and companies generate with crowdfunding are not subject to individual or corporate tax in the UAE.
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Stefan Grasic is the owner of Business24-7 and has considerable experience in the financial and investment niche, but also enjoys writing articles for the general readership. Stefan is an active stock, CFD, crypto and general investment researcher, advising blockchain companies such as Blockbird, GoCrypto, Hive Terminal at their start up level.