Pinsent Masons Advises First Equity Crowdfunding Platform Licensed in the DIFC

March 2019

Pinsent Masons, has acted as the sole legal adviser to the first equity crowdfunding platform licensed under the new DFSA crowdfunding license category in the DIFC. FundedByMe MENA Ltd is part of the wider FundedByMe Group; the leading crowdfunding business operating across Scandinavia. Over the past few years, some 470 companies from 25 different countries have been successfully funded with more than €55 million by the FundedByMe Group.

Crowdfunding is a catch-all term used to describe different fundraising models that allow a “crowd” to pool funds and finance specific projects or businesses. Equity crowdfunding, the model used by FundedByMe MENA, allows investors to buy equity (shares) in start-up and SME businesses.

According to the UAE’s Ministry of Economy, the start-up and SME sector represents more than 94 per cent of the total number of companies operating in the UAE and provides jobs for more than 86 per cent of the private sector’s workforce. In Dubai alone, start-ups and SMEs make up nearly 95 per cent of all companies, employing 42 per cent of the workforce and contributing around 40 per cent to Dubai’s GDP.

Traditionally conventional lenders have been wary of supporting start-ups and SMEs due to their limited assets and lack of a proven operations record. FundedByMe MENA’s equity crowdfunding offering will provide a much-needed alternative source of funding to support such companies in the UAE and across the region.

FundedByMe MENA was granted DFSA final approval on Jaunary 17, 2019. The Pinsent Masons team helped the DIFC-based company devise a bespoke funding model that protects investors by allowing certainty of share title transfer and secure release of funds.

Tom Bicknell, Partner at Pinsent Masons said, “This was a challenging, first of its kind project for the region. We worked very closely with the highly entrepreneurial team at FundedByMe MENA to deliver under significant time pressure. We are extremely proud of the end result and look forward to working with FundedByMe MENA going forward.”

Marie Chowdhry, Associate at Pinsent Masons said. “Our team’s combination of DFSA licensing and regulatory experience along with FinTech expertise meant we were uniquely placed to bring the client’s application to a successful conclusion.”

Samer Toukan, CEO of FundedByMe MENA said. “We are delighted to be the first equity crowdfunding platform to be fully incorporated in the DIFC. Working with the team at Pinsent Masons was a truly collaborative and enjoyable experience. The team is extremely client-focused, providing not only legal support, but strategically commercial advice as well. FundedByMe MENA will bring to the UAE and Gulf region a true alternative to traditional finance and investment options, supporting the initiatives of the DIFC and Dubai in helping start-ups and SME’s with alternative funding. Central to our offering is our proven operational excellence and our commitment to full transparency for both our investors and entrepreneurs”.