Dubai-based el Grocer has raised $500,000+ on crowdfunding platform Eureeca

el Grocer, a Dubai-based grocery delivery startup co-founded by Mickael Costache in 2015 has raised $544,533 from 78 investors on equity crowdfunding platform Eureeca in 12 weeks. The campaign started earlier this year on April 17th with an aim to raise $300,000 in 12 weeks but they achieved 100% of the target in four weeks only and have decided to continue the campaign until tomorrow. After starting their services in July 2016, the startup has experienced double digit month on month user growth and has fulfilled about 10,000 orders worth 800,000 dirhams (about $218,000) in 2016. They claim to be the only platform in UAE that simultaneously offers same store prices and free delivery as well as regular promotions. We tried reaching out to el Grocer multiple times to learn more but they were not available for a comment.

This is not the first successful campaign of equity crowdfunding in the region. Nabbesh, the regional marketplace for freelancers founded by Loulou Khazen had also raised $100,000 in the past in exchange of 6.67% shares of the company and interestingly Eureeca, the platform crowdfunded itself as well last raising $400,000 of investment last year.

What is equity crowdfunding?

“Equity crowdfunding is the process whereby a large number of people provide money to a business in return for shares in the company.”

Or explained by Eureeca

“Equity crowdfunding, the model used by Eureeca, allows investors of nearly all profiles to buy equity (shares) in growth-oriented private businesses. Investors effectively become co-owners of the business and are naturally incentivised to help it succeed.”

What is Eureeca & how MENA startups can raise funds using it?

Co-founded in 2013 by Chris Thomas & Sam Quawasmi, Eureeca claims to be the first global equity crowdfunding platform. Headquartered in Dubai, Eureeca offices in London & Kuala Lumpur as well. It connects businesses and entrepreneurs with investors to raise atleast $250,000 through its platform. The business must pass Eureeca’s initial screening and due diligence process in order to launch their campaign. As the platform is global, they let any startup that passes their screening raise funds but because of having offices in Middle East, Europe & South-East Asia only, it is more likely for startups of these regions to have successful equity crowdfunding campaigns Eureeca.

The businesses are requested to submit their pitch desk, business plan and historical and projected (3-5 years) financials. The whole process of succesfully raising funds on the platform from the application stage to closing could take upto 20 weeks including 12 weeks of campaign. Eureeca does not charge any upfront fee but to be able to submit application, the startups have to pay $1500 which can be refunded in full if the application does not pass. If the application passes screening and startups end up raising funds on the platform, Eureeca take 7.25% of the funds raised as success fee. For valuation of your startup, the company offers different valuation tools through partnerships with third parties that help entrepreneurs in fairly pricing their startups.

The platform suggests that they’re not a replacement of angel investors or VC funds but an alternative financing option for SMEs that is complementary to angel and venture capital investing.

We had tried reaching out to Eureeca as well multiple times but were not available for a comment about successful campaign of el Grocer on their platform.

Featured image via TechCrunch

Zubair Naeem Paracha
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