Bahrain-based equity crowdfunding platform Beban Crowdfunding is preparing to launch in Egypt, CEO Karim Saleh tells EnterpriseAM. The move to establish Beban Egypt follows Foras AI — the shareholder founded by Exits CEO Mohamed Aboulnaga — increasing its stake in the company to fund the venture.

Beban? Beban is an equity crowdfunding platform that connects investors with startups and SMEs seeking funding in exchange for ownership stakes starting as low as USD 100. Unlike debt crowdfunding, “Beban connects investors with companies that want to sell equity stakes in exchange for funding,” not debt, Saleh said. What also sets Beban apart is its own Shark Tank-esque TV program to showcase the investments.

But crowdfunding can only get you so far in Bahrain with a population of just 1.7 mn. While keeping Bahrain as its regional hub, Beban is looking to tap Egypt’s 69x larger population, which represents “a far bigger market and stronger growth potential.”

Trust may be an issue for some Egyptians, as “crowdfunding in Egypt has often been associated with fraud or informal activity,” Saleh noted. To tackle this, Beban approached the FRA to develop a crowdfunding model that also “includes safeguards such as due diligence, escrow mechanisms, and tracking of funds from investment through deployment and beyond,” he added.

The company is currently applying for a license for the venture from the FRA, which will be structured around the existing securitization and underwriting framework and an investment fund. The regulator has welcomed the model but mandated additional safeguards, including an independent fund manager to oversee investments, conduct due diligence, and ensure compliance before capital is deployed.

What’s next? Beban expects to receive a preliminary license after submitting its paperwork, followed by final approval around six months later, Saleh said.

Tags: