Lebanese crowdfunding platform Zoomaal is helping hundreds of exciting and innovative ideas get off the ground across the region.
By Elisa Oddone
Since it was launched in 2013, Beirut-based Zoomaal has quickly asserted itself as one of the region’s leading crowdfunding platforms. It’s so far hosted around 200 projects, almost half of which have reached their funding goal.
Globally, around $16.2 billion in transactions occurred in 2014, according to a crowdfunding report by Massolution, a research and advisory firm specializing in the sector, marking a 167 percent increase on the previous year. Last year’s strong growth was especially due to the rise of Asia as a major crowdfunding region with $3.4 billion in transactions raised via online funding platforms. This puts the region slightly ahead of Europe as the second-biggest block after the United States by crowdfunding volume.
Layal Jebran, head of projects management at Zoomaal, said her platform and others like it are offering a viable funding alternative to traditional lenders like banks, helping individuals leverage the power of the Internet and social media to swiftly and effectively finance their projects.
Why are crowdfunding platforms like Zoomaal proving to be so popular in the region?
Zoomaal’s founder established the platform after he had to shut his six other companies because of the lack of funding. There was a funding gap out there that needed to be filled and now crowdfunding is filling it. The majority of the projects come from Egypt, Jordan, Morocco, Algeria, and Lebanon. The success of crowdfunding can also be explained by the high unemployment rate in those countries, where the only opportunities left for young people are either in starting their own business or leaving their countries. Today, everything is possible online, so why not try to crowdfund your dream?
How diverse are your projects and what’s the biggest amount one has raised so far?
We reach out to all the countries in the MENA region. Applicants should be either Arab citizens, or residents of MENA, with projects to be implemented within this region. We host all kinds of projects spanning animation, comics, architecture, design, arts, community, education, environment, software, and web, among others. We don’t host personal funding projects like buying a new laptop, paying university tuition fees, or charity projects. The funding goal of the projects we have hosted so far ranges between $5,000 and $80,000. At the moment, we have a project on the platform that has already raised $90,000 and aims at a final $120,000.
How does Zoomaal differ from other crowdfunding platforms?
Our model is an all-or-nothing one. This means that if you aren’t able to reach your funding goal by the deadline, all the money will be returned to the original funders. However, you are able to divide your goal into milestones by setting your minimum goal, and explaining what you will be able to do once you reach it. We are also a reward-based platform; the project owner has to offer its investors “rewards” for their support in the form of gifts, postcards, or different products. Project owners are not allowed to give away equities or monetary prices, as Zoomaal doesn’t follow an equity crowdfunding model. If a project reaches its target goal within the three-month fundraising effort, Zoomaal takes in 5 percent of the money pledged. Otherwise the money returns to the investors and no percentage is taken in by the site.
How do you explain the high success rate among your projects?
Despite the lack of education about crowdfunding in the region, once a person gets in contact with us and takes into consideration the advice we give them, they run a very good crowdfunding campaign and, eventually, they reach their funding goal. The crowd is responding very well to [individuals] when they reach out to them, especially Arab expats, as they are trying to give back to their community.
When applicants contact us they are usually oblivious of what they want to do. So, what we do with them is schedule a first phone call. We help them at a later stage with marketing tips, such as how to reach out to people and who to target according to their project.
How do you carry out due diligence?
We thoroughly review every single project before it goes live. We make sure that the pitch, video, text, and amounts are realistic and accurate, and verify that the project leader is actually there. After the end of the campaign, only the project owner is allowed to receive the money raised.
What kind of challenges do you face as a crowdfunding platform?
Some countries, like Morocco, have very strict laws regulating fundraising amid fears of money laundering. However, this is usually solved by our donation-based system.
What is your next goal?
To take over the crowdfunding world. When we first started, our goal was merely trying to help people realize their projects across the region. We weren’t expecting such a huge success in such a short time. The number of requests and applications we have been receiving since our start is enormous, it was a completely unexpected response to our platform.