Crowdfunding, or raising money from multiple donors through an online platform, has seen a bumpy start in the Middle East. This may be about to change.

With limited sources of funding and most startups relying on self-financing, more entrepreneurs are tapping the power of crowds to secure the funds they need.

The platforms include equity crowdfunding, debt crowdfunding, or social crowdfunding which is where contributors give money to a startup they believe in without taking a stake in the company.

An increasing number of stories encourages more entrepreneurs. “We receive over 1,000 projects every month, a year ago it was less than 200,” said Abdallah Absi, CEO of Beirut-based crowdfunding platform Zoomaal.

Regionally, crowdfunding is maturing as many platforms are gaining traction. Zoomaal has helped raise $1.7 million for a variety of projects and startups since July 2013 and has seen a growth in the range of industries as well. Its most successful campaign raised over $100,000 in funds.

Zoomaal, which has a team of 11 people, hit the road this year to engage more of its regional community. It has hosted a crowdfunding workshop in Dubai attended by 44 people and is holding another workshop in Alexandria, Egypt on May 22, for which 94 people have already signed up. (Wamda Capital, the parent company of Wamda, is an investor in Zoomaal).

Afkarmena, which also aims to be a regional alternative to Kickstarter and Indiegogo, has helped fund a total of $120,000 since opening shop in September 2014.

“There has been an increase in inquiries that we received in the last six months, as more entrepreneurs look for alternative sources of funding,” said Maurice Tanas, the cofounder of Afkarmena.

Crowd’s getting bigger

And it’s not just the social crowdfunding or supporting social-minded entrepreneurs: equity and debt crowdfunding are also growing.

"We see the rise of angel investors - many feel more comfortable investing through a syndicate or a group of investors,” said Kamal Hassan, general partner at Turn8, a Dubai-based venture fund and accelerator program. “Also crowdfunding is the easiest way for an investor to test out a product and startup before committing to larger rounds.”

Beehive, a peer-to-peer Shariah-compliant lending network that launched in September 2015, has registered over 2,000 investors and distributed 25 million dirhams (US$6.81 million) in financing. Unlike crowdfunding platforms that anyone with an idea can join, Beehive is aimed at already established small businesses that are looking to grow their operations and offers funds you can repay in up to three years.

Artscoops, a regional platform that allows you to buy and sell art, was able to raise more than $100,000 through equity crowdfunding platform Eureeca.

Yet the industry is still far from reaching its ambitious growth goals.

“Mark our words, equity crowdfunding will be the de facto mechanism to raise funds for business in the future,” Eureeca CEO Christopher Thomas told Wamda in 2012. “Ten years from now we will wonder how we ever survived without it.”

Lack of regulation is also preventing many investors and potential contributors from jumping on board.

Time to do it

Along with preparation ahead of the campaign launch, putting together an engaging video that conveys the concept is something that can make or break a crowdfunding campaign.

“Having a strong network, friends and family backing you within the first seven days is extremely important,” said Afkarmena’s Tanas. “You have to start campaigning before you go live, it’s all about building momentum.”

Early-stage exposure and retaining equity are the main advantages of crowdfunding, says Noora Husseini, founder of Taita Leila, a traditional Palestinian clothing retailer and the most successful fundraising campaign on Afkarmena’s platform. She raised over $36,000 in May 2015.

“I suggest it for seed stage or independent projects, otherwise if you are well-established you are better off looking for donors or grants,”Husseini told Wamda. “It is a great way to test your concept and you keep your equity.”