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UAE and Saudi-based Trukkin raises $3.5 million

Wamda

Saudi Arabia and UAE-based logistics firm Trukkin has raised $3.5 million in a funding round led by investors from the AL-Namlah Family Group, the Al-Madi Family Group, the Abanumay Family Group and Batic Investments and Logistics. The startup will use the investment to scale itsservices across the GCC region.

Launched in 2017, Trukkin operates throughout the GCC region and aims to innovate and simplify logistics and land transportation for long-haul trucking. The company claims to have shipped to more than 200 locations in the Middle East and to have completed over 10,000 long-haul, business-to-business truck movements in Saudi Arabia alone.  

“Trukkin is building up its marketplace to connect thousands of mostly independent truckers. The long-haul land transport market is highly fragmented and disorganised, and our aim is to institutionalise and professionalise this business,” said Janardan Dalmia, CEO of Trukkin.

Through its app and online marketplace, the company brings together shippers who need more transparency and easier access to trucks with truckers who need better access to demand and higher fleet utilisation.  Their client base ranges from businesses who order close to 100 trucks a day to ones with smaller needs who order as few as three trucks a month.

 

May 26th 2019, 8:16 am

Sustainable style and the rise of circular fashion

Wamda

When luxury fashion brand Burberry admitted to destroying more than $35 million worth of fashion and cosmetic products last year, there was outcry around the world over the amount of wastage created by the fashion industry for the sake of protecting their brand from counterfeits and discounting.

The fashion industry is the second most polluting industry after oil and gas. According to the World Wildlife Fund (WWF), it takes 2,700 litres of water to produce the cotton needed for just one t-shirt; add a single pair of jeans to that and you need 20,000 litres of water in total.  Moreover, the pesticides, fertilisers and chemical dyes and manufacturing methods have polluted the freshwater supplies of hundreds of villages in places like Indonesia where on the banks of the Citarum River are some 400 factories that release toxic chemicals into the river every day.

To combat the impact on the environment, the fashion industry is beginning to focus on sustainability and one solution is the sharing economy.

According to the World Economic Forum (WEF) the sharing economy will be worth $670 billion by 2025 as people become more comfortable with renting and leasing goods and services for a short period of time instead of buying them outright. 

Fashion rental companies already exist, but the concept is likely to evolve to more subscription and brand-based models and according to GlobalData, the online clothing rental market is set to grow to $2.5 billion by 2023.

US-based fashion chain Urban Outfitters, which also counts Levi’s, Anthropologie and Fila in its portfolio of brands plans to launch a subscription service, allowing customers to rent six items each month before choosing to buy them or swap them. The service, called Nuuly, will be launched in the US later this year.

The Luxury Closet (TLC), a Dubai-based marketplace for pre-owned fashion will soon begin piloting something similar with a fashion brand in the UAE.

“Brands will enable their customers to give old items back to them and then take new items. We’re working with this brand [to be announced soon] to allow their customers to resell their items in exchange for store credit,” says Kunal Kapoor, founder and chief executive officer (CEO) at The Luxury Closet. "Ownership and rights as a concept will go away."

Creating this circular economy in fashion will help to make it more sustainable. TLC has seen a rise in people selling and buying pre-owned goods on its platform and is embarking on a global expansion strategy after closing an additional round of investment

For Maya Talih and Tima Hamadeh, encouraging people to buy pre-owned goods was the easiest option and one of the most ethical. According to the Thread Up Sustainability Report 2018, consumers can increase the life of an upcycled piece by more than two years, thereby reducing its carbon, waste and water footprint by about 73 per cent.

They launched RIOT, a circular fashion online boutique and movement after noticing the value of items sitting in their wardrobes.

“Saying I have a closet full of clothes, but I have nothing to wear is no longer acceptable given the state of the planet,” says Talih. “We wanted to give customers more and more reason to wear pre-loved, but there is a massive stigma especially in the region.”

Part of the reason why RIOT refers to the items on its website as “pre-loved” instead of “pre-owned” is one way to help change the perception of second-hand items.

“In the fashion industry, you’re looking at the runway, there is all this beauty, the last thing you’re thinking about is water, gas emissions and dyes,” says Talih.

The influence of social media and Instagram has further increased demand for fast fashion and now a third of women wear an item on average five times before they throw it away.

“We’re buying twice as much and wearing it for half as long. That alone is crazy,” says Talih. “There is definitely more awareness and education. It is trickling down to the region, but not as fast.”

Kapoor believes that the fashion brands will soon begin to think like car manufacturers, who design and build cars with the understanding that it will have more than one owner during the product lifecycle. This, he believes, will push clothing manufacturers to create higher quality and more durable products.

Creating such quality clothes requires the right materials and for Mathew Benjamin, co-founder and managing director at Benjamin Siggers, a Dubai-based company that produces bespoke men’s suits, these materials need to be sustainable and organic, free from the use of pesticides, fertilisers and chemicals.

“The largest impact we can have is through raw materials and choosing the most sustainable for the conventional materials that are used which saves water and is better for everyone involved,” says Benjamin. “From our point of view, it’s the right thing to do. Building the company for the future is the way it has to go, it benefits everyone in the long-term.”

While the demand for such products is still limited in the Middle East, there are several startups that have emerged over the past few years that are pushing the message of environmental impact and sustainability.

Egypt’s Green Fashion collects and salvages clothes from landfills to create unique items of clothing. In Lebanon, NK by Nour Kays repurposes plastic carrier bags into a new material to make bags and accessories, while Dubai’s Ohoy Swim uses recycled plastics for its swimsuits.

Plastic is one particularly toxic material that has great potential to be refashioned into clothing. Every minute one million plastic bottles are purchased worldwide, totalling almost one and a half billion bottles per day. Since 91 per cent of all plastic is not recycled, they end up in landfills or the ocean and take 400 years to decompose. 

But it will take a while before people feel truly comfortable wearing plastic and so perhaps the most compelling model at the moment is the circular and sharing economy. While the stigma associated with buying and wearing pre-owned goods still exists, many in the region feel comfortable with selling their wardrobe items as a way to make some money, thereby becoming important contributors to the sustainability of the products.

“Consumers are becoming more and more conscious, they hold the power to make the change. More and more they are checking labels and manufacturing process,” says Talih. “Circular fashion is the easiest option and arguably the most sustainable and has the most direct impact.”

Wamda Capital has invested in The Luxury Closet

May 25th 2019, 9:23 pm

«الثلث المتحدة» للاستثمار تستحوذ على 30% من «المكان»

Wamda

المصدر: صحيفة مال الاقتصادية

كشفت لـ "مال" شركة المكان The Space المتخصصة في مساحات العمل المشتركة، عن إتمامها جولة استثمارية Seed Fund تمخضت عنها استحواذ شركة الثلث المتحدة للاستثمار على 30% من رأسمالها، بهدف التوسع في نشاطها عبر إنشاء مساحات عمل جديدة في عدة مدن في المملكة، وكذلك التخطيط للتوسع الإقليمي.

وبيّن لـ "مال" عمر الشبعان الرئيس التنفيذي لشركة المكان The Space إن الصفقة تعتبر أكبر صفقة في هذا القطاع، إلا أنه تحفظ على ذكر حجم مبلغ الاستحواذ، مشيرا الى أنه تم عبر رفع رأسمال "المكان" وانه سيتم الإعلان عنه خلال الفترة المقبلة.

 وأكد الشبعان أن الهدف من الاستثمار هو مواكبة لرؤية السعودية 2030 والتي تهتم بالمنشآت الصغيرة والمتوسطة ورواد الأعمال، حيث تقدم الشركة بيئة خاصة تساعد رواد الأعمال والشركات الناشئة على بدء نشاطاتها وأعمالها دون تكاليف كبيرة إضافة الى خدمات لوجستية اخرى ومن بينها إقامة ملتقيات ودورات وإرشاد والوصول إلى المستثمرين وخدمات أخرى تساعدهم في أعمالهم.

واوضح الشبعان أن The Space مرخصة من الهيئة العامة للمنشآت الصغيرة والمتوسطة "منشآت" وتعتبر من أوائل من حصل على رخصة كحاضنة اعمال ولديها شراكات مع مسرعات أعمال، مشددا على أن "المكان" تطمح لأن تكون العلامة التجارية الأبرز في المنطقة لمساحات العمل المشتركة وحاضنات الأعمال، وذلك من خلال إنشاء نموذج عمل فريد يجمع بين التصميم وتجربة المستخدم المتميزة، وكذلك انتقاء المواقع الجاذبة، وتفعيل المجتمعات من خلال الفعاليات والأنشطة والبرامج المختلفة، إضافة لسعيها لان تكون شريكة لشركات استثمار رأس المال الجريء في استقطاب وتمكين الشركات الناشئة.

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May 23rd 2019, 9:07 am

Jordan’s DigitaSport raises seed funding

Wamda

Source: Startup MGZN

Oasis500, one of the leading investment companies and business accelerators based in Jordan announces a seed round of investment in Jordanian Sportech startup DigitaSport, according to a blog post on their website. However, the amount was not disclosed. 

Founded by Omar Dweik (CEO), and Omar Rida (CTO), DigitaSport, the startup is a one-stop shop for sporting entities that seek to digitize brand value. With its fully customizable mobile application, sporting entities of all types and sizes can afford to launch their own official app. They can also shop for various fan-engagement features and digital tools. 

“We invest in startup companies in their pre-seed and seed stages accelerating their time to market and building the capacity of the team to enable them to grow and solicit funding,” Oasis500 mentioned in their blog post.

Oasis500 business accelerator also play an integral part in guiding the startups in different stages through their various business support such as finance, business, development, marketing, corporate linkages and more. 

May 23rd 2019, 8:02 am

We are stuck in the middle of a technological cold war

Wamda

As the US government banned China’s Huawei from purchasing US goods and services last week, many were left wondering whether their Android-powered Huawei smartphones would still work.

The Asian telecoms giant has become the latest target in the US-China trade wars, which saw the company and 68 other entities placed on an export blacklist, the so-called “entity list”.

It is not the first time that Huawei has fallen foul of US policymakers, who accuse it of conducting espionage on behalf of the Chinese government. The ban goes beyond commercial protectionism and into the realm of politics where both superpowers are fighting for global economic domination.

Without a resolution, the move risks further fragmenting the internet and governments around the world including in the Middle East, will eventually have to pick a side.

While many countries close to the US have already banned Huawei from building its telecoms infrastructure like Australia, others are less reluctant given the company’s leading capabilities in 5G technology  - expected to be the main enabler of innovations like machine learning and artificial intelligence and internet of things.

Huawei was the first Chinese company to go truly global after the government began to embrace capitalism. It expanded across the world and established a strong presence in the Middle East and Africa, where it enjoys the second highest smartphone share in the local and global market, just behind South Korea’s Samsung. The company has also been instrumental in rolling out the telecoms infrastructure of much of the region including in the UAE, Saudi Arabia and Bahrain.

So with this latest snubbing, where does that leave the Middle East in this new technological cold war that is beginning to unfold?

The Cold War of the last century between the US and the former Soviet Union focused on an arms race centred on nuclear prowess, later becoming a race to space.

Nowadays however, a new cold war has emerged, but this time it is between the US and China and one centred on technological innovation.

While the US was spending trillions of dollars fighting its wars in Afghanistan and Iraq, China was busy innovating and building up its manufacturing capabilities. Instead of producing “cheap Chinese goods”, it is now producing “cheaper” Chinese products that are good enough to compete on a global scale, with Huawei sitting at the forefront of technological innovation.

Over the past 10 years, Huawei has invested $45 billion in research and development (R&D), of which more than $13 billion was spent in 2017 alone. It is the world’s fifth largest spender on R&D, outspending Apple, Intel and GE and has ploughed $2 billion into 5G technology research.

Its P30 smartphone, its flagship phone launched this year and priced at around $700 offers specifications that enable it to compete with Apple’s iPhone and Samsung’s Galaxy phones. But whether consumers will risk investing in the handset now remains to be seen. Google, which develops the Android operating system (OS), confirmed that it will continue to offer its services for existing Huawei devices, but future models will no longer be supported.

Huawei’s chief executive of its consumer business, Yu Chengdong, stated that the company has already developed its own operating system which will be available by early 2020, should the US refuse to take it off the entity list. For its Chinese consumers, this is unlikely to be an issue since Google services are not available in the country, but for consumers in the Middle East, where Android and Apple are the dominant OS, this will matter. If Huawei develops its own OS and app store, developers will have another OS to cater to, and Huawei fans will need to decide whether to forego Google services like Gmail, Youtube and Google Search and instead opt for Chinese-made solutions.

But since more than half of Huawei’s revenues come from China, what the Middle East consumer decides is only likely to make a modest dent. What is more important however, is whether governments in the Middle East will continue to trust Huawei with their mobile telecoms infrastructure.

As the world’s principal energy supplier, the Middle East’s political stability and ideological preferences play a crucial role in the global economy. Given its strategic location and resource-rich lands, the region has throughout its history, been a theatre for global conflict with empires and superpowers attempting to either invade it or woo it for political, ideological and economic support.

Most recently, it has been China that has attempted to win over the Middle East and it has been succeeding. According to the Arab Investment Export Credit Guarantee Corporation, China is now the region’s biggest investor and holds almost a third of the foreign direct investment (FDI) stock in the Arab world.

Trade between China and the Middle East is expected to rise to $500 billion by 2020, up from more than $300 billion today according to US-based consultancy McKinsey & Co.

One catalyst for the growth in this partnership has been the Belt and Road Initiative (BRI) first outlined in 2013, which aims to build roads, ports, railways and other infrastructure of connectivity from China across to North Africa, a modern-day silk road with up to a $1 trillion of Chinese investment.

In February this year, Saudi Arabia agreed to include Mandarin in the curriculum at all stages of education from school to university following a meeting between Crown Prince Mohammed Bin Salman and a high-level Chinese delegation. The decision is intended to strengthen bilateral cooperation and increase opportunities for partnerships in the long-term.

China is banking on its historical ties to the region, re-imagining the old trade routes for the modern day and a return of an Eastern civilisation powered by the latest technologies. This, for many in the region, is a more attractive proposal even with the accusations of espionage, than pandering to the US, whose recent history in the Middle East has been left wanting.

But what many fail to realise is that technology is interdependent. No one superpower can win a technologically-driven economic or trade war without causing its own economy to suffer. Banning Huawei from buying US goods and services will negatively impact the US.

Of the $70 billion that Huawei spent last year buying components, about $11 billion went to US companies including Qualcomm and Intel.

It is worth noting that another Chinese telecoms player ZTE, was also placed on the entity list last year, but the ban was lifted within a few months after it paid a $1 billion fine and $400 million in escrow and replaced its board of directors and senior management.

It remains to be seen whether Huawei will suffer the same fate, but if the US remains steadfast in its decision, then governments around the world will be forced to re-evaluate their telecoms policies. At some point, the Middle East will have to choose the technology it wants to deploy for its future so that it doesn’t risk losing out on yet another industrial revolution. And it is a choice that will be driven by either cost or ideology. 

 

 

 

 

 

 

May 22nd 2019, 9:14 pm

Cairo-based Yumamia raises $1.5 million Pre-Series A

Wamda

Source: MENABytes

Cairo-based foodtech startup Yumamia has raised $1.5 million as its Pre-Series A, the startup announced today, saying that the investment came from Saudi-based boutique consulting firm Pure Consulting. The round, per statement, takes Yumamia’s total investment raised so far to $2.8 million, making it one of the best-funded startups in Egypt.

Founded by Belal El Borno in 2014, Yumamia had originally started as a food delivery platform to deliver junk-free (wholesome) food prepared by professional chefs using premium ingredients and top hygiene standard to customers in Cairo but has recently expanded into corporate catering, adding a business-to-business (B2B) solution.

The startup partners with F&B outlets to help them monetize their underutilized resources by outsourcing entire food preparation operations. Yumamia uses a franchise-like model that allows these F&B outlets to operate using existing resources while following operating rules and recipes of Yumamia.

Yumamia sells the food to companies through its corporate catering solutions. Its ordering platform for offices allows employees at companies (that partner with Yumamia) to order food (lunch) on a daily basis. The platform comes with a dashboard for HR/Operations to manage the invoices, Yumamia’s founder and CEO Belal El Borno told MENAbytes.

Yumamia charges the companies who can either provide the food for free (as a perk) to their employees or charge them perhaps by deducting the monthly invoices from their payroll.

The food delivery platform for consumers that Yumamia had started with is still live but its the B2B platform has been doing exceptionally well, responsible for over eighty-percent of company’s revenue, said Belal, speaking to MENAbytes.

He also said that the startup plans to use the latest investment to expand to Saudi by launching in Riyadh later this year and accelerate its growth in Egypt.

 

May 22nd 2019, 9:37 am

Jordan Introduces its first Agritech Accelerator HASSAD

Wamda

Source: Arabnet

Since the early days of plant and animal domestication, agriculture has progressed enormously, enabled by rapid technological developments. Agriculture needs to meet today’s needs while at the same time addressing costs constraints, environment changes and population growth for growing global population.

Agriculture probably isn’t the first thing that comes to mind when thinking about entrepreneurship. But some experts see innovation as key to giving farmers in the MENA region the boost they need to survive in this new age of agricultural challenges – desertification, population explosion, increasing production costs, and decreasing support for traditional and family farming.

Jordan aims to invest in this sector by encouraging its people to provide tech solutions regarding agriculture. On the 4th of May, HASSAD Agritech 3-month business acceleration program supported by ITG Solutions was launched. It will provide its services to support startups, solutions, and SMEs specializing in technology within the agricultural sector.

The accelerator aims to be a catalyst for the development of the sector in Jordan through its innovative startups. The way to do this is by building a supportive and stimulating environment that captures the distinctive Agritech solutions and transforming these solutions into companies capable of scaling, influencing, and accelerating the development of the Jordanian economy.

Mr. Walid Tahabsem, Chief Executive Officer of the ITG Solutions, believes that “Jordan is in need for specialized business accelerators which will help bring out innovative solutions and convert them to successful, sustainable and scalable businesses.”

Continue reading this story

May 21st 2019, 8:19 am

In conversation with Ahmed Wadi of MoneyFellows

Wamda

In a bid to fund his wedding, Ahmed Wadi realised he’d taken out the maximum loan limit from his bank and so he came up with the idea for MoneyFellows, an application that digitises and manages “gam’eya”, the informal lending circles commonly practised in Egypt. More formally, it is known as a Rotating Savings and Credit Association (ROSCA) where a small community of people contribute a fixed amount of money, taking it in turns to receive the whole sum every month.

Wadi founded MoneyFellows in 2016 in the United Kingdom with Adham Badr, but moved to Egypt and joined the Flat6labs incubator in Cairo where there is a greater need for financial technology (fintech) companies that focus on financial inclusion. The company has so far raised $600,000 and is currently looking to raise a Series A round.

We spoke with Wadi about his entrepreneurial journey.

Why did you become an entrepreneur?

I always wanted to do something challenging. With any challenge I face, I just usually go ahead and try to solve it myself, especially using technology, so that was the main reason behind MoneyFellows.

Was this your first experience of launching a startup?

I studied and worked in Germany and did a few startups there. In 2005 we built one of the very first object tracking software and we worked with some companies like Microsoft on this project, but we lacked the company aspect. We just built a solution that worked but we didn’t really monetise it. There was no acquisition, we just worked with the relevant department and we left and got on with our lives. We didn’t take the company seriously, I do have regrets, there was a lot we could have done to monetise it and maybe got something useful out of it, that was the first key learning. It’s not just about building a solution.

What were the main challenges when you started MoneyFellows?

Funding challenges and regulatory challenges. It was a chicken-egg problem. Investors in the financial sector are usually afraid to invest in startups that do not have a licence. We needed funding to grow and the regulators thought we were too small to regulate us or talk to us. For regulations, we understood that we do not fall under anything that breaks the law. We are now working closely with the Central Bank of Egypt (CBE) to issue regulations that best fit “gam’eya”. It was also a challenge to build credibility with customers, but it is getting much better now.  

Our main challenge now is finding sophisticated tech talent such as data scientists.

What is the biggest sacrifice you have made?

It is all about sacrifices. I sold everything I had mainly to fund the company. Also, family time is compromised. I gave up almost everything I have, time, effort and money just to see this company thrive.

What are the most important lessons you have learned?

 The balance between too patient and not being patient. Also, persistence because things take time and sometimes you need to adapt and change things that you think will never work. Also being close to the users is very important to build the right version based on the feedback and not on my own vision.

Why did you move from London to Cairo?

We went to the UK for MoneyFellows because of the Asian and African population who practice ROSCAs. We joined the startupbootcamp accelerator which really helped us. But although ROSCAs are common in the UK, there are a lot of alternatives for access to cheaper credit. So we moved to Cairo where it is very common here and access to credit is very hard.

How do you convince an unbanked population to trust an app with their money?

Most of our customers join through referrals so they are assured from their close friends. We do not really spend on marketing but we’re now working on onboarding people through offline channels. We are also in the process of partnering with on-ground channels to allow customers to join gam’eya” offline. They submit their documents and money manually instead of submitting on the app.

What will your industry look like in the next decade?

I think recently there are lots of startups tackling the financial sector and the CBE started putting regulations and plans in place. So, there is an acknowledgment at least for fintech. There is now more support and the whole country is moving towards financial inclusion.

 

May 20th 2019, 10:59 pm

Jordanian edtech startup Little Thinking Minds raises $500,000 to close its Series A with ~$1.8 mill

Wamda

Source: MenaBytes

Amman-based edtech startup Little Thinking Minds has raised another $500,000 to close its Series A with $1.765 million, the startup announced today. This latest tranche of investment came from The Innovative Startups and SMEs Fund (ISSF), which happens to be the first (disclosed) investment by ISSF, the $98 million Jordanian fund that was established last year to invest in startups and VC funds. Little Thinking Minds had raised $1.265 million as first tranche of its Series A less than six months ago led by Algebra Ventures with participation from Mindshift Capital and Al Turki Group.

Founded in 2004 by Rama Kayyali and Lamia Tabbaa, Little Thinking Minds used to create educational content in form of videos and other things for children, before transforming recently into an educational technologies and products provider that creates digital solutions and platforms with the aim of improving learning outcomes for school-aged children in Middle East & North Africa and beyond. The two co-founders were joined by Salwa Katkhuda in 2014 who started leading company’s strategy and growth.

These platforms according to a statement by Little Thinking Minds are being used over 200 schools and 100,00 students across the region in both public and private schools.

Rama Kayyali, commenting about the latest investment, said, “We are very excited that ISSF chose Little Thinking Minds as their first investment. This is a big testament to how far we have come and the impact we are creating and hopefully continue to create. We hope now with officially closing our Series A round we will continue to work on improving the delivery of our educational solutions aimed at improving learning outcomes and reach many more children in the region and globally.”

Laith Al-Qassem, CEO of ISSF, said, “Digitization is transforming education and Little Thinking Minds are offering quality content with an engaging model in a region which has a growing student population. We are delighted to back this team led by Jordanian female entrepreneurs in the next phase of growth.”

Continue reading this story

May 20th 2019, 7:22 am

The Luxury Closet closes $11 million growth funding round

Wamda

UAE-based The Luxury Closet (TLC) has completed its growth funding round by securing additional capital to bring its total investment to $11 million.

This second closing was led by Knuru Capital, which will now become a key shareholder in TLC together with its two existing shareholders, Middle East Venture Partners (MEVP) and Wamda Capital.

The e-commerce platform which sells pre-owned goods was founded in 2011 by Kunal Kapoor and the latest investment will be used to fund the company’s global expansion efforts, starting with Hong Kong, after its acquisition of Guiltless.com.

“2019 is proving to be a very exciting year for us. The Luxury Closet has built one of the best catalogues in the world, and we are now taking it international,” said Kapoor. “With the acquisition of the operations of Guiltless.com, it will provide us with a strong foothold in the rapidly growing Asian market and enable us to offer delivery, and concierge services to our customers in Hong Kong.”

This transaction contains a secondary portion as well that allows MEVP’s seed vehicle, MEVF I, to provide its limited partners an initial return on their investment. MEVP still remains as the biggest single shareholder in The Luxury Closet.

Commenting on the transaction, Walid Mansour, partner at MEVP said “The Luxury Closet is disrupting not only the ~10bn USD personal luxury consumption in the GCC but also opening-up the ultra-valuable GCC closets to a fast growing global demand for unique pre-loved luxury items. Knuru’s investment only serves to underscore our bullishness and confidence in the success of The Luxury Closet”.

May 19th 2019, 4:50 am

Banking for the unbanked: The growth of fintech in Egypt

Wamda

In Egypt, cash is king, even when it comes to salaries. Of the 100 million-strong population, the World Bank estimates that just 10-15 per cent have a bank account, one of the lowest penetration rates in the world.  

Part of this has been the fault of the banking sector itself, whose offerings have been inadequate in their reach.  Egypt has few banks branches and Automatic Teller Machines (ATMs) per capita, in comparison to countries with the same per-capita income, with most of these services concentrated in urban areas than in rural ones. In addition, state-owned banks, are slow to innovate and modernise and are poor in the products and services they offer, according to a study by the World Bank. 

The development of the financial sector has been proven to be vital for economic growth and creation of jobs in a country where the youth unemployment rate exceeds 30 per cent. Increasing access to financial services will also help to reduce Egypt’s 30 per cent poverty rate and economic inequality.

So, with a mobile penetration rate of 102 per cent and 28 million smartphone users, it is through financial technology (fintech) that Egyptians have a better chance to access financial products and services.  

Financial Inclusion

Over the past few years, financial inclusion has been brought to the forefront in Egypt as a means for financial sector growth. Along with the increasing need for innovation and the shift towards digitisation, plenty of fintech startups have emerged in the country.

“Financial inclusion is no longer a corporate social responsibility [CSR] topic but rather, an investment opportunity because a big sector of Egyptians is deprived from basic financial services that are not available through normal banking operations.,” says Rami El-Dokany, co-founder and CEO of Pride Capital, Egypt’s first fintech-focused venture capital. “So, investing in fintech technologies will increase financial inclusion in Egypt and will encourage cross-selling for financial products.”

One of the most notable Egyptan fintech startups is Fawry, a provider of e-payments through more than 100,000 locations. Having completed the first transaction in 2009, Fawry now has 20 million customers and processes 2.1 million transactions daily.

“Most people use Fawry because it has solved a problem for them. If I had talked about financial inclusion and all that, it would not have mattered to them, but the point is to actually make their lives easier and provide a solution that they would be willing to pay for,” says Mohamed Okasha, co-founder and managing director of Fawry.

One example that Fawry noticed is that people were willing to be an extra EGP2-3 to pay for their mobile phone bills at a kiosk closer to their workplace than go to a Vodafone store to make the payment there.

“Convenience has a price and people would happily pay for it and feel that they are saving money because otherwise, they would drive to the store which would cost them much more,” says Okasha. “So, we provide an efficient solution to everyone, companies, merchants, and consumers. Everyone is benefiting from the system and it is cheaper for them to use that service.”

Challenges

While startups like Fawry have gained wide popularity and can facilitate big payments, other emerging fintech startups are struggling.

Ogra, an emerging fintech startup that digitises payments below EGP50 through mobile phones, faces the challenge of having to deal with banks that are not quite ready for innovation, according to Khalid Khalil, co-founder of Ogra.

“Banks and payment gateways impose high transaction fees and commission rates on e-payments. This poses a problem for small payments such as transport, scratch cards or goodies from kiosks, placed at EGP100 or less, because we cannot place a high commission on users for small transactions,” says Khalil.

Since the fintech sector is relatively new to Egypt, companies are facing different kinds of regulatory and societal challenges that might hinder the growth of fintech startups.

“There are many challenges including the unclarity of regulations and integration with banks. The second challenge is that there is not enough awareness for entrepreneurs in that sector of financial services. They could be tech savvies but do not know how the process goes or the economics of the transactions. Another challenge is that sometimes the network is down and there are infrastructure problems that make the user's experience uneasy,” says El-Dokany.

In addition to obstacles from the side of the government and entrepreneurs, others believe that there are obstacles on the side of the customers and the Egyptian culture that favours and trusts cash payments.

“The biggest challenge is the culture. Our culture is cash-based and most transactions are cash-based. We should work on the awareness strongly so we can attract lots of people and gain their trust in using their mobile phones to make a transaction,” says Ayman Hussein,  sub-governor of payment systems and business technology sector at Central Bank of Egypt (CBE).

Another thing is that systems need to be interoperable and connected and that is what happened when we connected all mobile payments schemes. We also need to work on the fees because lots of people think the fees are a lot so we need to have incentives and programmes for consumers and merchants so they are encouraged to be part of the system.”

Fintech Hub

Realising the value of financial inclusion, the CBE has been taking active steps towards the advancement of the financial sector and has introduced several new initiatives and regulations and an EGP1 billion ($58 million) fintech fund for startups.

With the aim of becoming a hub for fintech startups in the region, Egypt is placing itself in competition with Bahrain, Abu Dhabi and Dubai’s Fintech Hive. But unlike these places, it has the population that would benefit more directly from the financial inclusion startups.

“We are developing a three-year strategy for fintech with the vision to be a fintech hub for the region in the next three years. We are working on a fintech hub where investors meet entrepreneurs so they can find adequate funding,” says Hussein.

Alongside this fund will be a regulatory sandbox to test the environment for regulations.

“People with new ideas can come and test their ideas so we can make sure these ideas have no harm and operate in a regulatory correct programme,” says Hussein. “After that programme, they can start operating in the market. This is being done in collaboration with all stakeholders because we are not the only regulators, there is also the Financial Regulatory Authority and other institutions.”

Expectations

According to the Arab Youth Survey 2019, just 35 per cent of youth in North Africa prefer to pay via credit card online. But with the high mobile penetration rates, more and more startups are relying on mobile phone payments to make the user's experience easier and financial services more accessible.

“We believe mobile phones are key and will be our tool in Egypt to get into fintech and will be the winner in the methods of payment offered. We believe in ‘less cash’ rather than cashless,” says Okasha. “Things happen transitionally, Fawry did not happen overnight and so things like that take time to mature.”

Okasha believes the fintech industry in Egypt will boom in the next decade, “but its shape will change dramatically. What we think of today as an innovation will be a commodity in two years and there will be new ideas and solutions for problems”.

For El-Dokany, the change is already happening.

“I am seeing lots of traction from investors into the sector specifically, regional hubs are being created to cater for fintech and all of them are eyeing for Egyptian startups. It will be a game changer,” says El-Dokany. “Fintech will pick up very quickly because it is something that you use every day. So, when you provide a digital platform for it, it will be a lot easier. There will always be the challenge that cash is king but when you provide a solution that is as simple as cash, things will change.”

 

May 18th 2019, 9:14 pm

Egypt's XPay raises $250,000 in pre-seed

Wamda

Source: MENAbytes

Cairo-based fintech startup XPay has raised $250,000 in pre-seed funding from two angel investors, the startup announced today in a statement to MENAbytes. XPay that is part of Startupbootcamp Fintech Cairo’s first cohort had previously raised an investment from EFG EV Fintech as well which is a Fintech-focused accelerator in Egypt.

Founded last year by Dr. Mohamed AbdelMottaleb, XPay empowers communities to go cashless through its community management platform (for communities) and mobile app (for the consumers). The startup enables universities, schools, gyms, social and sports clubs, residential compounds and different other communities to set up their offerings and collect payment online. XPay’s mobile app allows members in these communities to pay in less than a minute using debit/credit cards, mobile wallet, and a cash collection service.

“XPay was established to become the platform of choice for all members of the family – eliminating the stress of juggling numerous transactions, subscription and bill payments, payment methods and due dates. One platform to ease the unavoidable inconvenience of modern living,” said Dr. Mohamed AbdelMottaleb, founder and CEO of XPay, speaking about the platform.

The startup plans to use this latest investment to execute its growth plans and expand its team.

Continue reading this story

May 17th 2019, 7:06 am

Saudi's Resal raises $800,000

Wamda

Source: MENAbytes

Jeddah-based gifting ecommerce platform Resal has raised $800,000 in its Pre-Series A funding, the startup announced today.

The investment was led by BIAC Incubators. It apparently came from their Saudi investment initiative that was announced late last year. The round was also joined by Derayah Ventures who is starting to become an active player in the local ecosystem and Nayyara, a Riyadh-based events company that runs and operates business lounges and banquet halls.

Founded in 2016 by Hatem Kameli & Fouad AlFarhan, who have founded different other startups as well, Resal enables users to buy gifts and flowers for anyone have it delivered to their doorstep. The startup that had started with one city at the time of its launch is now available across 30 cities in Saudi and two in Egypt & Jordan where it expanded earlier this year by launching in Cairo and Amman.

Resal in addition to selling to individuals also offers gifting solutions for corporate clients across all its markets.

Continue reading this story

May 17th 2019, 7:06 am

Saudi Cabinet approves the residency permit for skilled expatriates, investors

Wamda

Source: Alarabiya

Saudi Arabia’s Cabinet approved on Tuesday the special residency permit for entrepreneurs, investors, and skilled expatriates. Saudi’s Shoura Council had approved the special visa last week.

The new Green Card-style “Privileged Iqama” (residency permit) law will see foreigners benefit from the new residency scheme, which will not require a Saudi sponsor or employer.

According to the law, the residency permits will be offered to highly skilled expatriates who will benefit from added advantages including the ability to recruit workers, own property and transport, and enter and exit the Kingdom without a sponsor.

The permits will also include a family status so that a holder can issue visit visas for relatives.

There will be two types of systems under the permit, one which can be used for an unlimited period and the other valid on a yearly basis and subject to renewal.

Requirements for foreigners to obtain the new Privileged Iqama permit include having a valid passport, a good credit report, a health report, and a clean criminal record.

May 16th 2019, 7:47 am

Majid Al Futtaim acquires Wadi.com

Wamda

Source: MenaBytes

As reported by MENAbytes last month, Dubai-based Majid Al Futtaim has acquired the Saudi online grocery delivery platform, MAF’s CEO Alain Bejjani confirmed, speaking to reporters during a media roundtable yesterday. The CEO apparently did not share the details about acquisition but said it was completed earlier this year.

We’ve learned that the Rocket Internet’s team is still with Wadi.com helping them with the transition.

Wadi.com had Rocket Internet, Al Tayyar Travel Group (now known as Seera) and Majid Al Futtaim among its shareholders.

Majid Al Futtaim that is one of the leading conglomerates of the region, owning and operating shopping malls, hotels, and many other businesses across the Middle East, Africa, and Asia, had first invested $30 million in Wadi.com in November last year after Wadi’s pivot to groceries in early 2018. French hypermarket chain Carrefour that is owned and managed by Majid Al Futtaim in the region, had become Wadi’s strategic partner for both food and non-food groceries as a result of MAF’s investment in it.

The startup had initially started as an ecommerce marketplace in 2015, with the backing of Rocket Internet. Wadi.com was headquartered in Dubai, selling products in UAE & Saudi with a focus on the Saudi market. It had raised $67 million in the largest Series A (to date) secured by a startup in MENA. Al Tayyar had invested about $33.3 million at a valuation of $100 million, acquiring 33% stake in the company.

Al Tayyar had fully written off its investment in Wadi, in its 2018 annual report that was published about three months ago.

With different online grocery delivery startups in Saudi raising investments in the last few months and MAF’s commitment to invest more, the competition in this space is heating up. It will be interesting to see how the retail giant who now owns Wadi with the likes of Zad and Nana Direct.

 

May 16th 2019, 7:47 am

KAUST’s Red Sea Farms closes $1.9m investment

Wamda

Source: Arab Net

Red Sea Farms, an agriculture technology spinout company from King Abdullah University of Science and Technology (KAUST) specializing in saltwater greenhouse technology, has secured $1.9 million of co-investment from the KAUST Innovation Fund and Research Products Development Co. (RPDC). 

Red Sea Farms is uniquely positioned to serve the growing food security needs of the Middle East. A combination of irrigation water scarcity and hot, arid lands are constant barriers to the region’s ability to achieve agricultural self-sufficiency. 

For Red Sea Farms co-founder and KAUST professor of plant science, Mark Tester, food security has always been central to his research. “The Middle East is one of the most water-scarce regions of the world. Here we often rely on unsustainable sources of water for irrigation, such as groundwater, which is being rapidly depleted, or desalinated water,” said Tester. 

“Desalinated water requires large amounts of energy to produce which is costly — at least $1 for every cubic meter -— and has a high environmental impact.” 

With its combination of engineering and plant science, Red Sea Farms has developed solutions to grow saltwater-tolerant crops in greenhouses cooled using saltwater. In their saltwater greenhouse, 80 to 90 percent of freshwater is substituted with saltwater, massively reducing both the water and carbon footprint of food production. The result is a system where both fresh water and energy requirements are reduced up to 10-fold.

The seed investment will enable the company to build a 2,000 square meter saltwater greenhouse on the KAUST campus in Saudi Arabia and realize plans to produce 50 tons of tomatoes annually by 2020.

Continue reading this story 

 

May 16th 2019, 4:45 am

Snooze notification: How LUNCH:ON copes during Ramadan [podcast]

Wamda

For a lunch delivery company in the UAE, Ramadan is the seasonal dip that LUNCH:ON needs to contend with. So how does the company adapt to the changing demand?

As part of Wamda's food technology podcast series, we spoke with LUNCH:ON founders Dana Baki and Mohammad Al Zaben about the company's growth since its launch in 2015, how they developed their technology and their expansion plans after closing a $5.5 million Series A round led by Wamda Capital. 

 

May 15th 2019, 9:10 pm

Careem starts bus service from Jeddah to Makkah

Wamda

Source: The National

Careem, the Dubai ride-hailing platform that was bought by Uber for $3.1 billion (Dh11.39bn), has launched direct bus services from Jeddah to Makkah, the company announced Tuesday.

The service will start with 13-seater buses and is priced at 25 Saudi riyals (Dh24) each way, 60 per cent cheaper than typical ride-hailing services, according to Careem.

“Careem Bus will revolutionise mass transportation across Saudi Arabia and bring a new level of sophistication and price to our customers,” said Hadeer Shalaby, director of Careem Bus, in a statement. “The 13-seater service has been a huge success in Egypt, easing traffic flows and providing a safe and efficient way to commute.”

The Jeddah-Makkah route, which received approval from the Saudi Public Transport Authority, serves pilgrims travelling to Saudi Arabia to perform Umrah or Hajj. Many fly into Jeddah airport, 85 kilometres away from Makkah.

Careem Bus is the first app-based mass transportation bus service in Saudi Arabia and is part of Careem’s “ongoing commitment to solving transportation issues, improving mobility and creating jobs”, the statement said.

Customers can book through a separate Careem Bus app, but walk-on passengers are also accepted. The service is currently cash only, but soon will be available via several payment methods, including by credit card or Careem wallet.

Careem is looking to offer bus routes throughout the region. It acquired Indian bus-shuttle app Commut in September last year and also said Pakistan is a possibility. Careem Bus may add routes in the Kingdom based on customer feedback.

May 15th 2019, 3:45 am

Startup Arabia Book

Wamda

 

 

 

 

 

 

 

 

 

 

Startup Arabia Book: Stories and advice from top tech entrepreneurs in the Arab World. Download free e-book.

Startup Arabia captures the untold stories of the high-tech entrepreneurs in the Middle East who are creating one of the most vibrant and fertile tech hubs in the world today. Through their bold vision, creativity, and tenacity, they are transforming business in this region at record speed, ultimately giving rise to an endless stream of new opportunities for wealth creation and social impact.

Through a collection of interviews, Startup Arabia touches on the early days of those entrepreneurs and the startups they created. It explores how they got their initial ideas, what challenges they faced and how they overcame them, what lessons they learned from those experiences, and what advice they have for the next generation of Middle East entrepreneurs. They also share what they believe is required to ensure continued development of a startup ecosystem in the region... Read more, and download the free e-book.

 

About the Author: Amir Hegazi

Amir Hegazi is a life-long entrepreneur, with over 15 years of startup, tech, E-commerce, and digital media experience. He is the Managing Partner of intoMENA Group, a consulting firm that helps international companies do business into the Middle East and North Africa region. Prior, Amir was the Director of Marketplace at Souq.com, the region's largest E-commerce platform (recently acquired by Amazon.com), where he helped build its marketplace from the ground up to account for sizable portion of overall sales volume. Amir is also one of the early pioneers of digital media in the region, having launched the largest online TV network in the Arab world at such companies as JumpTV and Talfazat. Amir is passionate about entrepreneurship, technology, and promoting the startup ecosystem in MENA. Amir lives in Los Angeles and Dubai.

Buy the book on Jamalon

 

 

May 14th 2019, 3:09 am

In conversation with Bernard Lee of GlassQube Coworking

Wamda

Bernard Lee was an investment banker in New York before moving to Abu Dhabi to work in debt restructuring for the Executive Council, where he met his current business partner Fahad Al Ahbabi.

Following the government’s Emiratisation programme, Lee was made redundant and set about establishing a real estate fund with Al Ahbabi. In the process of trying to find an office for their new venture, the pair struggled and so they decided to establish Abu Dhabi’s first co-working space – GlassQube in 2016, to offer affordable office spaces.

 We spoke with Lee about his entrepreneurial journey.

Why did you become an entrepreneur?

When I left [the Executive Council] I had a choice to go back to New York but the thought of going back to banking was not an option, I couldn’t visualise going back to that life, so I spoke to my partner and came up with some ideas.

We envisioned a real estate fund, but there was no office space. Co-working was not in the UAE at the time at all, it was a very frustrating experience, business rents were very high, double where they are today. I was shocked at the lack of choice and cost and I made the decision that it’s something we should look into doing ourselves. That’s the story of why we did it, it was out of necessity. The demand wasn’t necessarily there, but we saw a need.

It was extremely high risk because both my children were born, I was supporting my family, I had no income for a couple of years. It was touch and go for a few years.

What were your main challenges?

We spent one and a half years creating a business plan and launched GlassQube in 2016 and within two months, the oil price crashed and we were dealing with a whole new market. The price of oil drives everything in this market, it doesn’t matter what sector you’re in. Oil will dictate the performance of the market whether you’re selling shawermas or real estate.  The crash completely turned out our initial projections.

It took a while for the market to accept what we had built. For the first year people still didn’t understand co-working. We had exposed ceilings, concrete walls and people would come and ask when we would finish. Some people thought we were a restaurant, it took a long time for the market to catch up. We never have these questions anymore.

How did you keep going?

I had already passed the point of no return, there was no alternative, this business had to succeed. What I see from a lot of startups in the region is they want to keep their day job. They have one leg in and one out. It’s a risk-mitigating way to go, but unless you’re all in…There’s something about that experience of being awake at night, at 4am sweating, not knowing whether you will survive or not. There’s something about that experience that’s very valuable and I think that’s lost on entrepreneurs who are unwilling to quit their jobs.

How do you decide where to open a new location?

We look at the location the same way we look at real estate – ease of access, improvements to lifestyle and cost. Now, all of our projects in the pipeline are partnerships with the landlords. We have a new location in the pipeline in Abu Dhabi, the next two will be in Dubai and we’re also looking at Africa and Pakistan. 

What will your industry look like in the next decade?

People see it as an easy real estate pseudo play. It’s much more than that, it’s providing a space and experience as a service. Real estate is one factor, but anyone with capital can build it, hire a designer, but if you don’t know how to offer the right experience to retain them while maintaining a margin, that’s very hard to do. We learned that the hard way. I literally believed that if you build it they will come. I thought people would be so excited, but it took a long time for people to get what we were doing. In the future flexible workspaces will become a permanent part of commercial real estate portfolios. Institutional landlords will allocate a space to support this type of business.

 

May 13th 2019, 10:07 pm

Cairo-based ArqamFC gets acquired by UK’s StatsBomb

Wamda

Source: MenaBytes

Cairo-based sports data startup ArqamFC has been acquired by English football analytics company StatsBomb, the Egyptian startup told MENAbytes today.

Founded by Ali Elfakharany, Hesham Abozekry, and Mohamed Osama in 2017, ArqamFC collects, analyzes and presents football data to clubs, agents, fans, brands, and players. According to its website, the startup collects over 5,000 data points every match including every shot, pass, and touch that takes place on the football field. The data is then sold in presentable form after analysis to clubs, agencies, media orgnaizations, and players to help them make better decisions. The data, for example, helps football clubs scout, manage and recruit better.

ArqamFC did not disclose the financial details of the transaction but Ali Elfakharany, the co-founder and CEO of the startup, speaking to MENAbytes, said, “This deal is less about financials and more about aligning incentives for the future, and building together the industry leader in sports data and analytics. We’re extremely satisfied with the deal terms and excited about the future.”

Ali also told us that the startup was bootstrapped until this transaction and had only raised a small friends and family round during its early days.

Statsbomb is also a data and analytics startup that helps football clubs improve their performance and productivity with its football analytics tool that can be used for player recruitment, opposition analysis, and performance marketing.

Ted Knutson, CEO of StatsBomb, speaking about the acquisition, said, “We are pleased to formally bring the Arqam data quality expertise into our mix. Arqam gives us more than 2X data points of any other provider and we are seeing results on and off the field.”

Continue reading this story

May 12th 2019, 4:38 am

Tunisia’s InstaDeep raises $7 million in Series A funding

Wamda

Source: Disrupt Africa

Enterprise artificial intelligence (AI) startup InstaDeep has raised US$7 million in Series A funding from AfricInvest and Endeavor Capital to expand AI opportunities in Africa.

Founded in Tunisia in 2014 but now headquartered in London having gone global, InstaDeep delivers AI products and solutions for the enterprise sector, and also has offices in Paris, Tunis, Nairobi and Lagos.

Powered by high-performance computing and outstanding research and development breakthroughs, InstaDeep utilises deep reinforcement learning and other advanced machine learning techniques to create AI systems that can optimise decision-making processes in real-life industrial environments. 

It has now raised $7 million in Series A funding in a round led by ]pan-African private equity firm AfricInvest with participation from Endeavor Catalyst, a New York-based co-investment fund under Endeavor.

The funding supports the development of a new scalable product platform aimed at empowering enterprises with better decision-making using AI, leveraging deep reinforcement learning and other advanced machine learning technologies to bring AI to applications within an enterprise environment, allowing companies to optimise decisions and improve efficiency.

“Through our own cutting-edge research, we have developed a platform that goes beyond what we have seen in AI applications in the past. It can tackle challenging optimisation and automation challenges in dynamic and complex environments such as, but not limited to, mobility, logistics, manufacturing and energy. We already see that our product is providing real value and ROI for our clients,” said Karim Beguir, co-founder and chief executive officer (CEO) of InstaDeep.

Continue reading this story 

May 12th 2019, 3:22 am

Succession planning: Knowing when to hand over the reigns

Wamda

While many startups hope to eventually exit and enjoy a large payout, others in the region want to create a business that may become the basis for a family dynasty.  

Throughout the GCC region, family businesses have played a vital role in fuelling the economy, with many now investing in startups and tech companies to diversify their incomes away from the more traditional sectors like real estate, manufacturing and steel.   

Today’s established family companies were once startups themselves. The tough lessons these firms learned in trying to achieve business continuity through ceding control to the next generation will also apply to the tech startups that endure.

In the Gulf, about $1 trillion of wealth will be transferred through business successions over the next seven to eight years, according to research by The Family Business Council – Gulf (FBCG) that also indicates only around 12 per cent of regional companies will make it to the third generation.

“Gulf family businesses operate in an extremely tribal and emotional context, which exacerbates the difficulties in conducting a successful succession,” says Fadi Hammadeh, author of Family Business Continuity in the Middle East & Muslim World: Betting Against the Odds. “Family businesses in the Gulf don’t have the longevity or maturity of family businesses in other regions due to the nature of our economies – our countries are young, so the phenomenon of family businesses is still relatively new.”

In the West, founders often create a company constitution or a family governance model that will be conducive for a peaceful transition, but in the Middle East such structures have no legal enforceability - Sharia law dictates that mandatory heirship rules must apply.

“Family members whom the founder didn’t think had the skills to take over the business can become owner-managers, which often ultimately leads to business failure,” says Hammadeh.

Ambiguities

Under the tutelage of a company’s founders or co-founders, power and ownership are concentrated and there is little doubt as to who is in control. Not so with the next generation.

“Usually, several people are now exercising that power - they need to agree on who will be CEO and create a governance model that incorporates the other children into a collegial decision-making process,” says Hammadeh. “This must also enable the family members who own a stake in the company but don’t work there to be informed about what’s happening.

“Often, family members don’t see eye to eye and when there is money there is greed, wherever there is power, there is jealousy – 80 per cent of the problems are emotional or psychological in nature.”

Hammadeh advises separating economic interest in the business from the legal ownership, which is similar to the trust or foundation set-up in the West.

“You put the legal ownership of the business in a metaphorical safe so no one can touch it and distribute the economic benefits of the business – for example, company dividends – according to a pre-agreed formula,” he says.

Albert Jan Thomassen, executive director at the Netherlands’ Family Business Network, urges company owners to start succession planning five to 10 years before the planned handover.

“The biggest challenge for the succession process is giving it enough priority. Succession is the most important investment in the future of your family business. It’s very easy to be distracted by more pressing issues,” says Thomassen.

Common mistakes include a lack of commitment from the successor to really want to run the business and a failure to spend sufficient time on difficult conversations.

“Letting go for the business owner is a tough process, and you have to acknowledge that,” says Thomassen. “For the successor, getting the self-confidence that they can succeed is also tough.”

The lesson to “let go” can also be applied to founders of the startups of today. When raising investment, founders ought to be prepared to take on board the views and wants of their investors.

“The founders are minority shareholders by the time the business is mature and they already have professional management and institutional investors which none of the family businesses in the region or anywhere else have for that matter,” says Fadi Ghandour, chairman of Wamda Capital.

Another blunder is failing to pay enough attention to what the company needs in terms of leadership.

“Usually, it’s not a clone of the father. That’s often due to the way society was changed, and a very authoritative leadership style is less and less accepted. It also has to do with life-stage of the company,” says Thomassen.

Difficulties

Lise Stewart, Principal-in-Charge at the US Centre for Family Business Excellence and a global expert on succession planning, has spent years researching why business owners fail to plan sufficiently.

“They tell us they don’t know how, who to talk to. It feels very complex – they might need an attorney, a tax specialist, a family therapist or a business specialist and on and on, so it’s daunting,” says Stewart. “They also tell us that putting things down on paper is very final and they worry that the situation will change and will commit to something that they’re unsure of, which is scary.”

Shame is another huge deterrent.

“Sometimes, they’re really embarrassed about family relationships. That sense of vulnerability plays an important role in succession planning,” says Stewart. “Worldwide, only 15-20 per cent of business owners do the appropriate planning to protect their business and their families.”

Consequences

Sometimes an owner dies while still in day-to-day control of a business, with it all too common for succession planning to start at the deceased’s funeral. Ownership passes by default to the next generation, who may not be suited to run the company.

“Within two to three years, the business will begin to wobble – it usually takes a little time because there’s some residual good things present from the previous owner,” says Stewart. “The new owners can’t keep it going … it becomes a fire sale. They never get the return on the investment they could have. Even worse is the impact on the family.”

Failing to plan creates a high probability of family conflict that end up in the courts, relationships forever ruptured. To avoid this, owners should start a business with an end in mind, including how they may eventually exit, Stewart urges.

“Many people think that planning limits your options, but it’s just the opposite,” she adds. “The more planning you do, the more ideas you generate, the more options you’ll have in the future.”

Many founders of startups would be well-placed to heed this advice. Succession planning is important regardless of whether family is involved or not.

CASE STUDY – KUWAIT’S ALEA GLOBAL GROUP

Mohammad Al Duaij is chief executive of Kuwait’s Alea Global Group, which was created in 1998 to consolidate his family’s investments and business interests. The group is wholly-owned by his father. 

Al Duaij, 39, started working at Alea in 2008 when his father asked him to assume control. An accounting and finance graduate from Leeds University Business School, he previously worked in Kuwait’s government and corporate sectors before joining the family firm.

“The biggest challenge was for me was to get my fingerprints on the company, because I wanted to expand it, I’m always an initiator and wanted to integrate new businesses within the group,” says Al Duaij. “I took a regional business and made it global.”

Today, Alea has private equity investments in Europe and real estate investments in Latin America, as well as its own commodity trading business based in China. Al Duaij is the sole decision maker in the business but provides his family with an annual update on the company’s performance.

He has some key advice for other family businesses mulling how to plan for the next generation to take over.

“Being transparent and making sure everything is clear from day one is the best way to achieve a smooth transition,” says Al Duaij.  “The only way to educate the next generation is to make them fall in love with the business and for them to become more attached to it so that it’s not just a job or a means to earn money.”

May 11th 2019, 9:23 pm

The three blind spots of social entrepreneurs

Wamda

Suzan Elsayed is a Google Policy Fellow at Wamda and an independent researcher focusing on the Fourth Industrial Revolution and future of jobs in Middle East and North Africa (Mena). She previously worked as a strategy consultant in the GCC and London.

Social entrepreneurship is often misunderstood as "non-profit" or simply an extension of corporate social responsibility programmes, but while it remains a theoretical concept without a solid definition, they tend to be companies that tackle various societal or infrastructural issues.

Plenty of social enterprises have emerged across the Middle East and North Africa (Mena) region. There are now startups that tackle issues in the healthcare and education sector, enabling better efficiency and accessibility and companies that focus on environmental issues due to the misuse of resources and the arid lands that surround the region.

But social entrepreneurs face a host of challenges, particularly when it comes to maintaining focus or understanding the business lingo. 

The lack of communication and gaps in understanding the necessity and the needs of social enterprises results in governments, investors, and startups to be ‘lost in translation’. For a starter pack, it would be recommended to focus on those three ‘blind spots’ for social entrepreneurs:

Money Speaks

In a recent panel discussion, one of the investors made a poignant statement. Given the political situations of the region, many of us cannot voice our opinions or vote on challenges facing our societies, so, “private finance can provide a democratic vote”. With investments being the key driver for change, social entrepreneurs need to speak the lingo. Given the limited number of venture capitalists who are open to social enterprises in the region, there needs to be a strategic and quantifiable language with potential investors.

On the other hand, it is crucial to highlight that the social entrepreneurship ecosystem struggles with a lack of pre-seed and Series B funding. However, this gap is substituted with grants and funding from international donors and charities which is considered unsustainable. Donors usually provide their funding as part of a one-off investment and do not drive a business-mindset in social entrepreneurs as they are not expected to showcase return on investment or profits.

Innovative Business Models

Social entrepreneurs are mission-driven individuals who are keen to make a visible impact in their societies. Yet, this can sometimes be difficult to translate into quantifiable and measurable results. Thus, the key is to make the business models ambitious but be humble about your social impact. For instance, if you are adding two to three UN Sustainable Development Goals (SDG), this will draw some scepticism towards the achievability of the business – especially if it is not backed by solid financial figures. It is vital to be strategic and pinpoint the aim of a startup to a primary and secondary key performance indicators (KPI).

It is understandable that social enterprises do not have the traditional business structure and can require a longer time-frame in order to achieve results. Therefore, it is beneficial for social entrepreneurs to consider the investors’ mindset and create a risk profile that can include organisations or entities that are able to withstand such social innovations. This is currently being tested through similar models of social impact bonds. Such innovative and strategic thinking would require entrepreneurs to have access to a pool of mentors that understand the nature of mission-driven businesses and their objectives.

Know Your Audience

Many social entrepreneurs already struggle to define their businesses to people as they can still be considered as ‘non-profit’ or charity organisations. Therefore, social entrepreneurs need to ensure they are innovative with their pitch in a way that can showcase their business mindset and their social impact - a pitch can be done in both ways. For instance, it is not necessary to align your startup with an organisation’s values or with the SDGs just for the sake of showcasing a social impact as long as you already have one.

For many business leaders and investors, it can be difficult to understand the social impact and its measurement. Thus, it is crucial to evaluate and understand the audience before presenting or pitching. In addition, it is vital to step back and create a simple value chain of the service or product – including its social impact. It needs to be quantifiable, financially viable and empathic to the social challenge. Last but not least, do not show up to a pitch riding your Ferrari. Walk the talk!

 

 

May 8th 2019, 8:02 pm

Ureed Freelance Linguists Network

Wamda

If you're looking for writers and translators for your content or blog, we've partnered with Ureed to offer you free credit on their platform. 

Ureed is a dynamic editorial marketplace that fosters talent across the globe. It brings various content options, including blogging, copywriting, legal documentation, editing, proofreading, as well as translation. It does not require any registration or subscription fees.

Businesses are able to set their own budget based on the size and complexity of the project. In addition to the standard option, companies can opt for the Ureed PRO service, where their projects are handled from A to Z, with a dedicated account manager who would select the best freelancer for the job, brief them and deliver the work to the client’s inbox through the streamlined digital experience.

You can use our Wamda promo code 'WAMDA25' that gives 25$ in credit upon sign up and code redemption. 

 

May 8th 2019, 10:10 am

Cairo-based Odiggo raises $180,000 in seed funding

Wamda

Source: MenaBytes

Odiggo, a Cairo-based ecommerce marketplace for auto spare parts has raised $180,000 as seed funding at the valuation of $1.25 million from Saeed Al Jaberi, a Saudi angel investor, the startup told MENAbytes today.

Founded in 2017 by Ahmed Omar, Wissam Saleh, and Khalid Omar, Odiggo sells auto spare parts all over Egypt (and beyond) through its bi-lingual website and mobile apps. The startup in a statement to MENAbytes said that it wants to make buying car parts and services as simple as buying a t-shirt online, “With a few clicks we can help people find their car parts and get them delivered to their service centers or their homes.”

Launched in Jan 2018, Odiggo, to date, has processed over 14,000 transactions and tickets, with their sales crossing $170,000 (EGP 3 million) in these fifteen months, the startup told MENAbytes. Odiggo claims to have the largest catalog of auto spare parts in the region with over 290,000 products in their database. The startup makes money by charging 7 to 22 percent commission on every order made through their website or mobile app.

Ahmed Omar, the co-founder and CEO of Odiggo, speaking to MENAbytes, said that they are expanding their platform to Sudi in July.

“We’ll be using the investment to launch in Saudi Arabia as the traffic from there has the best conversion rate on our platform. We’ll also be using it to expand our team, grow our technical infrastructure to make it more scalable and reliable for the users, and for customer acquisition and marketing,” said Ahmed.

“We might seem like a normal car parts online store. But we have combined the car technologies embedded systems with our platform and then linked the car parts with the service agencies around every area,” he added.

Oddigo in its statement to MENAbytes also said that they’re exclusive online sales partner of Valeo, a French global automotive supplier. Valeo has over 30,000 of their products listed on Oddigo that are being shipped directly from their warehouse in Turkey to anywhere in the world, for the orders placed through Oddigo’s website and mobile apps.

May 7th 2019, 1:42 pm

Abu Dhabi Investment Office launches Dh535 million fund

Wamda

The Abu Dhabi Investment Office (ADIO) announced today that it has launched the Dh535 million Ghadan Ventures Fund to support Abu Dhabi’s venture capital (VC) and startup ecosystem.

Managed by ADIO, the newly established fund is part of the government’s Ghadan 21 programme that aims to diversify Abu Dhabi’s economy and build an entrepreneurial culture in the emirate.

The Ghadan Ventures Fund has two key programmes: the ‘Startup Matching Fund’ and the ‘New Managers Fund’.  

The Startup Matching Fund plans to increase the amount of capital available for seed and early stage companies by matching a startup’s lead VC investment of up to Dh10 million for seed rounds, and Dh50 million for Series A per round.

Under the New Managers Fund, newly formed Abu Dhabi-based VCs can apply for fund matching, based on the amount they raise in the private market.

“Entrepreneurialism will be a key driver of Abu Dhabi’s economy and we are working to further enable local entrepreneurial talent, attract global entrepreneurs and build a thriving integrated start-up ecosystem,” said Elham AlQasim, chief executive officer at ADIO and executive director of the Ghadan 21 programme.

 The fund was recently announced in conjunction with the launch of Abu Dhabi’s Hub71.

“We’re excited to see the launch of ADIO’s co-investment fund as there are great startups to be found right here in Abu Dhabi. There’s never been a better time in this region for both startup and investor, made evident with the 31 per cent increase in total funding and a 13 per cent increase in the number of deals made in 2018, compared with the year before,” said Mahmoud Adi, head of Hub71.

May 7th 2019, 7:53 am

In conversation with Dana Baki of LUNCH:ON

Wamda

LUNCH:ON partners with restaurants to offer office workers a selection of curated meals at discounted prices. It was founded by Mohammad Al Zaben and Dana Baki in early 2016. The company recently closed its Series A round worth $5.5 million led by Wamda Capital.

Before founding LUNCH:ON, Baki worked for P&G in Washington DC for seven and a half years in the marketing insights and corporate strategy groups across the conglomerate’s global brands.

She then moved to the UAE with her husband and founded a business within the food sector which quickly failed. We spoke with Baki about her entrepreneurial journey.

Why did you become an entrepreneur?

I had absolutely no ambition to start my own company. I didn’t see myself in that world while I was at P&G but then I was done with the corporate scene. As an over-achiever, I felt there was so much more out there. I was always passionate about moving back to the region and in the first few months I looked at things I was passionate about – the entrepreneurial ecosystem, empowerment of women through financial systems and ultimately wanted to start my own business.

What was your first business idea?

I wanted to bring the concept of food trucks to the UAE. I had secured investment and put the business plan together but after doing that for a few months, I realised it wouldn’t work, the municipality regulations wouldn’t have made it profitable. You had to pay rental for the food truck but do the food prep in a central kitchen.

It was disappointing in the beginning. I had put a lot of work into it, but at the same time I was relieved that I figured it out early than actually spending the money, so I gave it back to the investors who offered me a job.  

I worked with them for two years and learned about a lot of different business and financial models. But I always had the itch to start my own business and food was always my passion.

How did LUNCH:ON come about?

A friend introduced me to Zaben in May 2015 and we decided the day we met we wanted to do something together. We quit our jobs in July 2015. It was the worst time to start a business, my son was 4-months old, but when you find the right partner and the idea and are passionate about it, you have to go for it.

We knew people wanted good food without paying high delivery fees and that’s what we’re solving for.

For several months we experimented with different financial models and ideas and started testing with a restaurant. We did it manually and pretended to be a chatbot ourselves. We took orders like that for several months and delivered food ourselves. It was crazy and a lot of fun and we saw enormous traction. That’s when we started investing in the technology.

Have you made any sacrifices in becoming entrepreneur?

Being an entrepreneur is a crazy journey. In the beginning there were a lot of bad days, but there was a kind of no turning back. We were in it and we knew we would find a way to make this work.

Personal time is definitely gone. You definitely have a lot of stress you wouldn’t have if you were an employee. You can never switch off, even when I’m on vacation I’m working, I’m always responding to emails. Part of it is self-inflicted and part of it comes with the territory.

What’s the best lesson you’ve learned?

Get something out into the market and test it as quickly as possible. You shouldn’t spend too much time perfecting your product because there will be so much to learn from testing. You waste time perfecting and it’s not ultimately where the product will end up.

What will your industry look like in the next decade?

There will be a lot consolidation happening in our industry, different companies will start partnering and serving customers more holistically. There is currently a lot of focus on dinner and that will change to other meal times because there’s only so much you can do with one meal period. There’s going to be a lot built around convenience and price. People are used to convenience and price will become more and more of an important factor, which is where we are well-positioned.

May 6th 2019, 9:02 pm

Oman’s eMushrif raises $1 million pre-Series A

Wamda

Source: MenaBytes

Muscat-based eMushrif has raised $1 million in a pre-Series A funding round, the startup announced today. The million-dollar-rounds may have been very common lately in different ecosystems around the region but it’s the first time we’re hearing an Omani startup score it. According to our data, it is the largest investment round ever raised by an Omani startup. The investment came from Oman-based Phaze Ventures, Oman Technology Fund’s Wadi Accelerator (eMushrif was part of Wadi’s first cycle), Sparklabs Energy, Myrad Holding, and Bahrain’s Dividend Gate Capital. Some angels also participated in the round.

 

Founded in 2016 by Adnan Alshuaili, Awadh Alshukaili, and Issa Alshuaili, eMushrif uses Internet of Things (IoT) to turn regular school buses into smart buses. The startup apparently installs an IoT device on the buses that enables automatic attendance marking of the students. The solution comes with a visual child check and detection system to ensure no child ends up staying inside the bus. eMushrif’s solution also comes with two apps for the school administrators and parents to track the location of bus in real-time and receive important notifications. In addition to school buses, eMushrif has also built commuting management solutions for some other verticals.

 

According to its website, eMushrif currently has over 350 buses using its services. The startup was among MENAbytes’ nine startups to watch at Step conference 2018.

 

eMushrif, according to the statement, will use the investment for mass production of its IoT devices, R&D, sales & marketing, and for expanding to other markets in the region.

 

Continue reading this story 

May 6th 2019, 12:12 pm

Kitab Sawti raises $6 million in Series A

Wamda

Sweden-based Kitab Sawti, the world’s largest Arabic audiobook platform, has raised $6 million in a Series A funding round from new and existing investors. The platform will deploy the funds to expand its content and reach.

New investors include Bonnier Ventures, the venture capital arm of Sweden-based Bonnier, one of the world’s most renowned publishers; Paltel Group, a public shareholding company with a major market share in Palestine’s telecommunication sector; and Kaaf Investments, a family investment house based out of Dubai. The company also attracted additional investment from Abdulla Elyas, co-founder of Careem, the ride hailing application. Northzone, a venture capital firm and one of the early investors in Kitab Sawti, also grew its investment in the Arabic audiobook platform.

“We have witnessed growing consumption of our content over the past period, with more than 1 million registered users and a 20 per cent month-on-month growth in paying users. The next 12 to 18 months will be very exciting for us as we deploy the funds to bolster the platform’s leading position in the Arabic audiobook industry, supporting more than 5,000 new jobs in the industry in the process,” Sebastian Bond, CEO  and founder of Kitab Sawti said.

Kitab Sawti was founded in Sweden in 2016 with the aim of supporting the integration of Syrian children into Swedish society. Today, it has offices in Dubai, Cairo and Palestine, and hosts more than 2,000 Arabic titles on its platform with more than one million registered users.

"We continue to see huge opportunities in audio and podcasting and the Kitab Sawti team has really impressed us with their ambition and progress,” said Ulrika Saxon, CEO at Bonnier Ventures. “There is strong overlap between Kitab Sawti and our experience with subscription models, intellectual property rights, and consumer-oriented businesses.”

 

May 5th 2019, 7:41 am

The battle to become the Middle East's startup hub

Wamda

For several years, Dubai, with its strategic location and stability, has been able to establish itself as the hub for the private sector across the Middle East and North Africa (Mena).

Boasting superior infrastructure, vibrant cultural and entertainment lifestyle sector, the emirate has been able to attract expatriates from across the world to its manmade islands and glittering skyscrapers.

The latest stakeholders for this destination are startups and the government is working hard to maintain their presence.  At the World Economic Forum (WEF) that took place in Jordan at the beginning of April this year, Dubai announced that it would grant the top 100 Arab startups (picked by WEF) five-year visas.

The UAE is already home to 20 of them and in a statement to WAM, Abdullah Bin Touq, secretary general of the UAE cabinet said the move “reflects our commitment to facilitate businesses, create an attractive and encouraging environment for growth, and underline the UAE's position as a global destination for talents”.

But Dubai is expensive, the most expensive city in Mena for startups due to the high real estate prices, visas, licences and telecommunications costs.

A recent report by Google and Strategy& identified Dubai as one of the most expensive cities in the world to launch a startup, accounting for 13.4 per cent of income per capita, compared with 6.8 per cent in Saudi Arabia and just 1.1 per cent in the US.  

And so, several other cities across the region are attempting to position themselves as an alternative destination hub for startups in Mena.

Abu Dhabi

The latest is Abu Dhabi, which will be providing a Dh1 billion ($272 million) package for startups as part of a new entrepreneurship space called Hub71 launched in partnership with sovereign wealth fund Mubadala Investment Company and Japan-based investment bank Softbank as well as Microsoft and Abu Dhabi Global Market (ADGM).

Half of this investment plan will be used to provide subsidies for housing, office space, health insurance and the remaining Dh535 million for an investment fund for both startups and venture capital (VC) firms which will be deployed over the next three to five years. The government is encouraging VCs to set up base at Hub71 by co-investing with them through a government matching scheme.

It is hoping to attract startups from around the world by promising them a network that includes Softbank and Mubadala’s portfolio companies which includes Uber, China’s Didi and India’s OYO.

 “What makes Hub71 different from other initiatives in the region is the partnership strategy,” says Ibrahim Ajami, head of Mubadala Ventures.

Working with government, universities, global tech companies like Microsoft will enable an ecosystem that Abu Dhabi hopes will propel it to the ultimate destination for entrepreneurs.

“They get to sit alongside leading tech companies from around the world – that dialogue, that engagement is absolutely immense,” says Ajami. “The role of Softbank is another part of our partnership strategy. Softbank sits on some of the greatest companies in the world and a lot of them are asking about how to expand to the region.”

Saudi Arabia

Networking, while beneficial is not enough to guarantee success. Most startups would prefer easy access to market and Saudi Arabia, for many, is the most lucrative market in the region.

Saudi Arabia’s Vision 2030 has repositioned the small to medium sized enterprise (SME) sector as one of the most important for the kingdom’s economic prosperity. The government launched the General Authority for SMEs known as Monshaat, whose sole mandate is to help, aid and enable them, a one-stop shop for SMEs.

Over the past few months Monshaat has announced a roster of new initiatives which has included launching a government-owned VC firm – the Saudi Venture Capital Company (SVC) with a fund worth SAR 5 billion ($1.33 billion) which it will invest directly in the country’s startups as well as VC funds.

It has also signed agreements with 20 global and regional VCs, including with Wamda Capital to facilitate the visa and licensing process for their portfolio companies.  

Saudi Arabia is the Middle East’s biggest economy with a gross domestic product (GDP) of more than $680 billion and a population of 33 million of which 70 per cent are below the age of 30. This demographic is technologically savvy with strong purchasing power and for startups, cracking the Saudi Arabian market is one way to ensure growth.

But the country’s restrictive social and cultural requirements make it difficult to attract talent. Riyadh-based logistics company Salasa has considered relocating to Dubai in a bid to attract the talent that is lacking in Saudi.

“We used to say lack of funds was a challenge, but this is not an issue anymore especially with government support. A big hassle for us is to find someone talented who wants to work for a startup. This is why sometimes we think if we move to Dubai, it will be easier to acquire talent,” says Abdulmajeed Alymeni, co-founder and CEO at Salasa.

Amman and Cairo

Two countries that do boast talent however, are Jordan and Egypt. During the opening plenary session at WEF, Jordan’s King Abdullah II bin Al Hussein told a room of the region’s top businessmen and policymakers that his country was ripe for investment and a destination for startups.

“Our most important strength is Jordan’s high-skill human capital,” he said. “Our young people are globally connected, tech-savvy, fluent in multiple languages and determined to succeed. They are proven assets to every enterprise. And we have already seen this strength at work, in the success of Jordan’s ICT industry, which has created thousands of new jobs and accessed markets across the region and beyond.”

Amman provides many of the engineers for the back offices of many startups and technology companies in the region, including Amazon. But they tend to be more expensive than engineers in Cairo, where the region’s most populous city is re-establishing its entrepreneurial flair amid a flurry of activity.

Kuwait-based Boutiqaat is currently considering opening a back office in Cairo.

“I can hire 10 engineers in Egypt for the price of one in Jordan,” says Fahd Mannaa, IT manager at Boutiqaat.

But cost alone is not enough to attract startups to establish headquarters in Egypt, or Jordan, which lack the same living standards as the Gulf. They are likely to remain as the backend offices for the rest of the region.

Bahrain

The country making the strongest effort take replace Dubai as the region’s hub is Bahrain. The small Gulf state enjoys easy access to Saudi Arabia, a bankruptcy law that allows startups to fail and restart and Al Waha’s $100 million fund of funds of which half has already been invested.  Bahrain has also adopted a “cloud first” policy and is home to the Middle East’s Amazon Web Services (AWS) infrastructure which will go live this year and will create thousands of jobs according to Amazon.  

Much of the progress has been led by the Bahrain Economic Development Board (EDB) which recently launched a special programme for startups by providing them with a fast-tracking service for applications to establish a presence in the country and an opportunity to pitch and access funding from Bahrain’s Sovereign Wealth Fund as well as the venture capital partners of Al Waha.

Bahrain has also worked hard to become a regional hub for financial technology (fintech) companies with the establishment of Bahrain Fintech Bay, home to a regulatory sandbox, co-working spaces and regional and global banks.

So will any one city take Dubai’s crown as the Middle East’s startup hub? Perhaps, but in a region where the markets are so fragmented, it would be better if these countries focused on specific sectors or technologies and become a hub for that, rather than attempt to attract all the startups of the Middle East.

“Today, Dubai is a hub mostly because it’s easier to attract talent, doing business is easier, but the market is pretty small and it is difficult for a startup to flourish in Dubai alone,” says Abdulkader Lamaa, vice-president of digital at McKinsey Digital Labs. “It is healthy to have more hubs coming up and more investments coming in but the disadvantage of too many hubs is sharing of information. It would be more useful to focus on sectors or certain technologies. As a region we would benefit from some level of personalisation.”

 

 

 

May 4th 2019, 8:01 pm

Artificial Intelligence: a blessing or a curse waiting to unfold?

Wamda

The notion that computers could one day “think” or supersede human intelligence is not a new one. It was Ada Lovelace, an English mathematician and developer of one of the world’s first modern algorithms in the mid-1800s, who suggested that computers might one day be able to think.

It was almost a century later that the term “artificial intelligence” (AI) was coined at Dartmouth College in the US in 1956 after a two-month-long meeting between several scientists and mathematicians.

Today, AI is a reality in several industries and is being hailed as the golden solution for much of the world’s problems. It can, with its immense power and ability to learn, put an end to global poverty, find a cure for cancer and ensure food security. In the Middle East, “data is the new oil”, is one notion often quoted at technology events and conferences. So if that is truly the case, then will artificial intelligence be a curse or a blessing for the region?

At the inaugural AI Everything conference in Dubai held this week, policymakers and industry leaders from around the world convened to showcase the latest technologies in AI including in machine learning, automation and robotics.

From basketball-playing robots to AI-powered recruitment that measures your level of integrity, there was a strong sense of the boundless opportunities that await us.

There were some words of caution about the ethical and societal impact of these technologies, but they were mostly drowned out by the catchy notes of the AI-generated music.

The Big Nine

One of the more troubling aspects about AI highlighted at the conference is that most of these technologies are being created and developed by just a handful of companies. During her talk, Amy Webb, the founder of US-based Future Today Institute explained that there are just nine companies leading AI development globally, six of which are based in the US and three in China.

The US six are Amazon, Apple, Facebook, Google, IBM, and Microsoft, all publicly-traded companies with a “fiduciary responsibility to their shareholders”. It is primarily capitalism and the need to make a profit that is driving their investment in AI according to Webb and not the need to rid the world of its problems.

The Chinese three are Alibaba, Baidu and Tencent, although publicly-listed, they are headquartered in China and are also viewed with a suspicious eye by policymakers in the US, who have already banned telecoms infrastructure developer Huawei from operating in the country due to concerns over intellectual property and sharing of data with the Chinese government.

Given the issues with human bias in machine learning, the implications of having two countries power the AI of tomorrow with their own cultural, ethical and societal bias embedded into their algorithms can create problems for other parts of the world.

There is no global standard for AI, there is not yet a moral or ethical code for AI, there is no global governing body for AI. And if such a body were created, which code of ethics should it adhere to? Which societal values should be upheld? How will that sit with the Middle East and its values?

The race to automate is forging ahead while people still ponder these questions, which will likely strike a technological cold war between these two superpowers with the Middle East already deemed a ripe market for investment for both countries.

The UAE, the only country in the world with an AI ministry, headed up a minister who is not yet 30 years old, has for the past decade positioned itself as a global leader in embracing new technologies to improve the quality of life for its population.

But the rest of the region cannot claim the same economic and societal comfort as the UAE. It is important to bear in mind that the Middle East and North Africa (Mena) has the world’s highest youth unemployment rate and the world’s biggest gender gap. It also struggles with a bloated public sector, ongoing wars and conflicts and parts of it remain a hotbed for terrorist activities that continue to exported to the rest of the world.

For the Arab youth, economic concerns, unemployment and inadequate education are the biggest issues they face and according to the Arab Youth Survey 2019, the majority feel entitled to government support. So how will AI impact a region with such problems? Few, if any, have a clear answer.

Job Loss

According to an Oxford Univeristy study, technology will replace humans from doing all human jobs in just over a century. Closer to our lifetime, the McKinsey Global Institute report on automation predicts that two-thirds of the world’s jobs, about 800 million, will be lost to automation by 2030. While many argue that technology will create new jobs, it is unlikely to create enough for the ones it displaces. According to the World Economic Forum, AI and machine learning will create 58 million jobs by 2022 and if it continues at that pace until 2030, it will have created 464 million jobs.

“What is important is to focus first on those who are particularly concerned – the youth and women,” said Cedric Wachholz, chief of ICT in education, culture and science section at UNESCO. “Two thirds of the youth are likely to be unemployed and AI tends to take away first entrant jobs, the easy jobs, so that is a challenge.”

Dissatisfied youth have proven to be a powerful force in the Middle East, most recently in Sudan, where peaceful protestors managed to bring an end to Omar al-Bashir’s regime.

According to Ben Goertzel, chief executive officer (CEO) at SingularityNET and chief scientist at Hanson Robotics, AI is initially likely to widen the wealth gap and will impact the manual and skilled labour, jobs traditionally held by the working class. This, he thinks, might result in more violence and terrorism around the world, but perhaps the real danger will lie in the breakdown of the middle classes, when office jobs become automated.

Such an unprecedented rise in unemployment in the Middle East can easily lead to protests and revolutions and a jobless population will reshape society and politics as we know it. This is the dilemma that governments and industries around the world will have to navigate to ensure stability and an easy transition to the future.

So would the executives of these tech companies be as enthusiastic about AI if it meant that one day they too would be replaced by a robot?

It’s a question I once posited to the CEO of one of Silicon Valley’s biggest virtualisation firms. His response was that if such a robot existed, he would not hesitate in hiring it. What was striking in his answer was that even if the technology existed to replace him, he was still the one “hiring” the robot and he would still have a job. The disconnect between the people pushing these technologies and those who will be most affected by it is widespread.

One website – www.willrobotstakemyjob.com – predicts the likelihood of losing your job to a robot. Taxi drivers are at 89 per cent risk of being replaced by robots or AI and suggests an 88 per cent chance of automation within the next two decades.

Compare that with a chief executive, which is just 1.5 per cent at risk. The reason for that disconnect thus becomes more apparent. Meanwhile white-collar workers like accountants and auditors are at 94 per cent risk while insurance underwriters are 99 per cent at risk. As the website says “you are doomed”.

The answer will lie in re-educating, re-skilling or upskilling, but as Goertzel pointed out at AI Everything: “We’re speaking about enabling an environment in countries, which is not always a given. If we look at current trends, in the lowest-income countries, only 10 per cent of the youth will have a secondary education by 2030…it’s easier to talk about lifelong learning and leapfrogging when these basics are not a given.”

For others, the answer to these woes will be a universal basic income, but where exactly this money will come from to fund millions if not billions of salaries is still up for debate. Microsoft founder Bill Gates has suggested taxing robots 90 per cent to fund this, which will mean taxing the companies that produce or use these robots – but given their power, this is unlikely to happen.

“The ecosystem all should take responsibility. Technology innovation always advances so we have no other way,” said Chae Sub Lee, director of standardisation bureau at the International Telecommunication Union (ITU). “Engagement of all the ecosystem is quite important. I recommend it would be good to look to the bright side, the best way is to bring the light against the dark.”

But perhaps caution and regulations might be a better place to look initially, than to rely on optimism.

 

May 1st 2019, 6:55 pm

The impact of AI & machine learning on entrepreneurship

Wamda

We are hosting 'The impact of AI & machine learning on entrepreneurship’, a talk featuring a special guest visiting from Amazon: Hassan Sawaf, Director of AI at Amazon Web Services joining us at our Wamda X space, on Thursday, May 2, from 4:00 - 5:30 PM - Register here

Hassan Sawaf has worked in the automatic speech recognition, computer vision, natural language understanding, and machine translation fields for 20+ years. In 1999, he cofounded AIXPLAIN AG, a company focusing on speech recognition and machine translation. Hassan also spent time at SAIC as Chief Scientist for Human Language Technology, where he worked on multilingual spoken dialogue systems and later established and led the Artificial Intelligence team at eBay. He has been with Amazon since September 2016, where he is Director of Applied Science and Artificial Intelligence in Amazon Web Services.

He will be sharing his insight on the impact of AI & machine learning on entrepreneurship, as well as emerging AI trends, industry adoption, and potential ethical implications that could emerge from the integration of AI. 


Limited capacity, book your seat here.

May 1st 2019, 8:18 am

Souq becomes Amazon.ae in the UAE

Wamda

Source: The National

Amazon and Souq on Wednesday announced the launch of Amazon.ae, which replaces souq.com in the UAE nearly two years after Amazon's $580 million acquisition of the e-commerce platform.

“It’s a great day. I think first for our customers, it’s really amazing. We bring a lot of the local know-how of how our region works with a lot of what Amazon offers globally," Ronaldo Mouchawar, co-founder of Souq and vice president of Amazon Mena told The National.

Customers who visit the Souq site are redirected to the new domain with a message from Mr Mouchawar, who founded Souq in 2005, initially as an auction site linked to internet portal Maktoob.

In the message, Mr Mouchawar says “there have been many milestones for Souq over the past 15 years and today, we have another to share to you. We are proud to announce that we are now Amazon.ae”. The new site “features over 30 million products, including those previously available on Souq and five million products from Amazon US".

He added that the team in the region "has grown to over 3,600 people, and each and every one of us is thrilled to invite you on this journey", and said many new products and services will be added in the future.

Continue reading this story

May 1st 2019, 3:42 am

Dubai-based Kerning Cultures raises $460,000 in seed funding

Wamda

Source: MenaBytes

Dubai-based Kerning Cultures has raised $460,000 as seed funding, becoming the first ventured backed podcast network in the Middle East, the startup announced today. The round was led by 500 Startups and joined by individual investors including Najla Baeshen, Hatem Dowidar, Khalifa Al-Hajeri, Fawzy Abu Seif, and Yousef Janajri. The podcast network had previously raised a pre-seed investment of $50,000 from Matter, a media-focused accelerator in San Francisco in 2018.

Founded in 2015 by Hebah Fisher and Razan Alzayani, Kerning Cultures is a podcast network that produces high-quality podcast shows for the Middle Eastern audience. One may think of it as Gimlet Media of the Middle East. If you’re not familiar with them, Gimlet Media is an American network of podcasts that was recently acquired by Sotify for $200 million. Kerning Cultures had started as a single podcast show telling documentary-style long-form stories from the Middle East. The show has been doing exceptionally well and has won different titles including best podcast show in UAE by different regional media outlets.

With the help of this latest investment, Kerning Cultures is set to expand its network of shows and is expected to launch at least 3 new Arabic and English shows by the end of 2019. The company has identified a potential listening audience of 110 million people between the age of 15-25 for these upcoming bilingual shows. It includes youth in the region that normally feels unrepresented in local traditional media and an untapped audience of Middle Eastern diaspora listeners abroad.

Kerning Culture currently makes money through advertisements and sponsorships of their shows but plans to launch content licensing and distribution agreements and white label production for brands in the future.

Continue reading this story

May 1st 2019, 3:27 am

Arab youth drive e-commerce growth

Wamda

The youth of the Arab world are becoming far more comfortable with making purchases online, with 71 per cent of those aged 18-24 across the GCC, Levant and North Africa revealing they had shopped online either monthly or less frequently, a growth of 18 per cent from last year according to the Arab Youth Survey 2019.

The majority are buying clothes (47 per cent), followed by food (37 per cent) and electronics (33 per cent). Preferences in payment has also shifted with 49 per cent preferring to pay by card compared to the 50 per cent who are still relying on cash on delivery.

Customers from the GCC constitute the largest majority of youth who prefer card payments with 65 per cent preferring to pay online, while just 35 per cent of youth in North Africa, where the vast majority remain unbanked, prefer to pay online.

While the pace of growth is substantial, the region’s e-commerce sector remains underdeveloped when compared to other markets in the world. This underdevelopment is attributed to the low frequency of online purchases which is primarily caused by the lack of supply and limited product selection on local websites, the relatively poor performance of the last mile delivery and the lack of trust and prevalence of cash on delivery in the Arab world.

According to a report from Bain and Company and Google, the Middle East and North Africa (Mena) e-commerce market was worth just $8.3 billion in 2017, representing less than 2 per cent of the total retail market. In most developed countries, e-commerce accounts for 10-15 per cent of the retail market. But growth of 25-30 per cent is expected per year for e-commerce in Mena, reaching $28 billion by 2022, about 7 per cent of the total retail market.

Other findings from the Survey reveal that the youth are mostly concerned about the economic situation, with 56 per cent saying that rising of living costs is the biggest obstacle facing the Middle East. Unemployment was also a popular concern with 45 per cent thinking it is the biggest obstacle. Most of the youth surveyed also believe that it the government's role to provide services to all citizens, including education, healthcare and jobs but expressed concerns that the government is not doing enough to support young families.

Education is also a pain point, with 49 per cent believing that their education is not preparing them well for future jobs, while more than half are seeking higher education opportunities in the West.  

The Arab Youth Survey is commissioned yearly by Dubai-based public relations firm Asda’a BCW, and looks at 15 countries across Mena, conducting more than 3000 face to face interviews with those aged 18-24.

April 30th 2019, 10:11 pm

In conversation with Mohamed Okasha of Fawry

Wamda

Financial technology (fintech) has been highlighted as one of the ways to bring banking services to the masses. Across the Middle East and North Africa (Mena) region, a staggering 86 per cent of the population remain unbanked, one of the highest rates in the world.

In 2008, Egypt-based Fawry launched an electronic payment gateway, enabling those without a bank account or credit card to pay for bills online and through ATM machines and dedicated service points. Since then, it has grown to become the country’s largest fintech startup processing more than 2 million transactions daily from its 20 million customers.

In 2015, a consortium of investors acquired an 85 per cent stake for $100 million and the company is now planning to launch an initial public offering (IPO) later this year.

We spoke with Mohamed Okasha, who co-founded Fawry with Ashraf Sabry. Prior to founding Fawry, Okasha worked at Egypt-based financial investment firm Raya and telecoms operator Vodafone.

Did you always want to become an entrepreneur?

None of us were entrepreneurs. We worked in corporates and learned very well from them. Raya was also an emerging company and so there was lots of space to innovate so we learned how to work out of the box. When we started Fawry, we believed that we could do something in that space. We did not name it then as "fintech" but we were passionate about what we wanted to do and we believed in the importance of what we were doing in Egypt.

What were your biggest challenges when you first started?

The fintech industry was new to Egypt and actually, new to the world when we started in 2008. We had lots of challenges to prove the concept. It took us years before people believed it, not only companies and investors but also, consumers. People used to pay their bills through Fawry and then call the call centre to check if the payment was delivered.

Then in 2011, the revolution happened and we spent two or three years investing money in a market that everyone thought was risky. Institutions that invested in us were on our back but we took a brave decision to continue investing without stopping while other companies decided to regress. Fawry did not happen overnight so things like this take time to mature.

How has the sector developed over the past few years?

The industry is now known to an extent and people are starting to read and hear what can be done in that space. We have lots of opportunities to grow and gaps to fill. Our goal was to bridge the gap between the masses and the financial services offered by banks. Things have changed dramatically in the past three years. The government and regulators speak fintech and encourage fintech. Maybe they do not know the way exactly and do not have something solid, but all the dynamics are going in a much more positive way than in the past because it is now sort of mandated on them to find a way to include people in financial inclusion.

What were the key lessons that you learned?

We always had the goal in front of our eyes, we knew for sure we had a problem in financial services and that technology is the only solution. Since we were building a long-term investment and an infrastructure that we were sure was going to benefit the country, we had to have good financing. We had banks and investment funds from day one. We did not need financial support a lot. We only raised capital once and then things started to automatically fund themselves.

When we first talked to banks, they did not really believe in Fawry until they knew that we, as individuals, had previous success in other places and that we deliver and execute what we talk about so the risk was a bit less than putting money with someone they do not know. The energy that the youth put in any startup is very important but once you have an idea, you need to have your own support from people who are more experienced. The idea alone is not enough, and money is not enough.

What are your plans for expansion?

We highly believe in e-commerce so we are investing in that direction. We launched Fawry Pay which is our payment gateway for e-commerce. For example, Jumia , Egyptair, universities and others, want their customers to have different options for payment like Visa, Mastercard, cash or PayPal so they had to make a contract with 5 or 6 institutions. Fawry always depends on consolidation so in one move, they can take all the options. We invest also in mobile technology because we believe mobile payment is going to be the winner in the payments methods offered. We also started looking outside of Egypt too, mainly the GCC, Kuwait, UAE and KSA. We will launch something with one of the biggest banks in the UAE by the end of the year.

What will the fintech industry in the Middle East look like in the next decade?

We have two things that are unique. We are closer to the East than the West. Because the banking penetration is low, we think mobile phones are key. The other thing is that the whole region is going online so that is why we invested in that. I believe these are the two criteria that will govern how fintech will look like in the upcoming period of time.

The fintech industry will boom but its shape will change dramatically. What we think of now as innovation will be a commodity in two years.

 

April 29th 2019, 10:10 pm

Dubai-based Searchie raises $2 million

Wamda

Source: MenaBytes

Dubai-based recruitment platform Searchie has raised $2 million in seed funding led by two family offices who have invested in UAE for the first time, the startup announced today.

Founded last year by Sahiqa Bennett and Harvey Bennett, Searchie uses a network of freelance recruiters and its AI assistant to help companies hire for different types of positions. Unlike most of the recruitment platforms in the region who charge a subscription fee for access to their candidate database, Searchie is using a slightly different model.

The startup charges $25-50 for every interview from the employers which also includes psychometric assessments.

It is not clear if employers are supposed to pay any of this fee in advance. Recruitment agencies normally charge a part of the fee as soon as they’re given the position.

Once an employer opens a position with Searchie, their freelancer recruiters source candidates who match the requirements. The candidates are then evaluated by Sarah, Searchie’s AI assistant that evaluates the candidates for their behavior, skills, and even cultural fit for an organization. The startup then presents a shortlist of five candidates to review and schedule interviews.

“Searchie is the first company in the MENA region to use machine learning and video to predict people’s personality and match every candidate to a company based on competency, behaviour, values and needs,” the startup said in a statement.

Continue reading this story

April 29th 2019, 10:04 am

Saudi-based Sary raises six-figure in seed funding

Wamda

Source: MenaBytes

Saudi-based wholesale grocery platform Sary has raised seed funding, the startup announced today. Sary did not disclose the size of investment but has told MENAbytes that it’s a six-figure (US Dollar) round that came at a valuation of $2.67 million. We could not confirm if that’s pre or post-money. The startup also told us that the investment came from individual investors.

Founded by Mohammed Aldossary, who previously worked with Careem in different roles and Khaled Alsiari last year, Sary is digitizing wholesale grocery shopping in Saudi, enabling users to buy groceries in bulk directly from wholesalers instead of grocery stores or hypermarkets.

The platform is available as a mobile app only and works pretty much like any other grocery delivery app but lists bulk quantities of all the products in addition to the single pieces. So for any product that a user wants to buy, they see it listed as a single piece and in bulk quantity (with better prices for the bulk quantity).

Continue reading this story

April 29th 2019, 3:44 am

Mejuri raises $23 million Series B

Wamda

Source: MenaBytes

Toronto-based direct-to-consumer jewelry startup Mejuri has raised $23 million in Series B led by New Enterprise Associates, one of the leading and oldest American VC firm. The round was also joined by Felix Capital, Net-a-Porter, Incite Ventures, BDC Capital’s Women in Technology Venture Fund, and Amman-based DASH Ventures. DASH had first invested in Mejuri in its seed round in 2016, followed in its $5 million Series A in September last year and now joined the Series B as well. Kuwait-based Arzan VC is also one of the early investors in Mejuri.

Founded in 2015 by Noura Sakkijha, a third-generation Jordanian jeweler, and her husband Majed Masad, Mejuri designs, manufactures and sells minimalistic high-quality fine jewelry directly to customers through its website that receives close to 800,000 visitors every month. The startup also has two offline stores in Toronto & New York City where customers can try and buy the jewelry.

According to its website, Mejuri currently has two manufacturing facilities – one in Toronto and the other one in Seoul, Korea. The startup uses high-quality materials including 14k gold, sterling silver, gold vermeil, diamonds, gemstones, and pearls to manufacture modern and minimalistic earrings, necklaces, bracelets, rings, and different other products. According to TechCrunch, Mejuri has released1,500 designs since its launch. Mejuri produces everything in small quantities and that’s how it is different from fast fashion.

Continue reading this story

April 28th 2019, 6:45 am

Dubai-based Jump The Q secures a Pre-seed funding round

Wamda

Source: Magniit

Jump the Q, a Dubai based tech startup has successfully secured a pre-seed funding round of an undisclosed amount from an Abu Dhabi based angel investor, Nabil Abdul Rahman.

Jump the Q is a convenience platform (mobile app) that seeks to cater for home services including but not limited to grocery delivery. Jump the Q was founded by two young entrepreneurs by name Aaron Nkombou Munga from Cameroon and Kaustav Murli Parameswaran from India. Both founders use to work for an events management company in Dubai before deciding to embark on this venture.

According to Aaron, who has now quit his full-time job to head the company as its CEO, this funding has come just in time to enable the company to refine the product and build the much-needed traction so as to prepare the company for the next phase of growth and expansion. He also added “we are quite happy to have Nabil on board with us. His interest in both our company and the sector as a whole could be felt from the very first phone call and through the entire process. We count on his support and hope to benefit from his expertise and network in growing our business”.

This investment is another indication of the opportunities that still lies in this sector hence investor confidence despite the presence of some big players in the sector.

April 28th 2019, 6:45 am

Careem begins its "Chapter Two"

Wamda

Careem, the UAE-based ride-hailing app which was recently acquired by US-based Uber is only just starting its “second chapter” according to co-founder Magnus Olsson.

Speaking to Wamda executive chairman Fadi Ghandour at Wamda’s fourth annual investor conference, Olssen explained the company’s plans after the $3.1 billion acquisition, the largest exit to date in the Middle East and North Africa (Mena) region.

“While the world thinks it’s a big deal, for us it’s chapter two, it’s not the end of the story,” he said. “For us, this means we have a very strong backer and partner in Uber that will help us further pursue our purpose to simplify and improve the lives of the people in the region.”

This next chapter is to propel Careem beyond ride-hailing, to become the region’s super app, akin to China’s Wechat where users can pay for goods, order food or read curated news. 

In its last fundraising round, Careem raised $200 million with the agenda to become a “tech platform” leveraging its brand and operational footprint across 120 cities in 15 countries.  Over the past year the company has ventured into food delivery, and online payments as well as offering more mobility options including a bus service in Cairo

“Ride-hailing is still an expensive option for 98 per cent of the population,” said Olsson. “So we want to go for the mass option for people with mobility. People love [Careem Bus] 40 per cent of the population is not even served with any public transport infrastructure, we think it’s a $100 million market in the region alone.”

But it seems to be payments where Careem is hoping to make a mark. To date, 90 per cent of all its transactions are in cash – “so that’s a massive opportunity”, according to Olsen.  “We have the scale – we have transaction relationship with our customers so we’re in a good position.”

The company is now working with regulators to attain the financial licenses in a bid to use Careem Pay to buy or pay for goods beyond the rides, which will help with financial inclusion, particularly in markets like Pakistan and Egypt.

The endgame is to “go into the Careem app and never leave”, said Olsson.      

Watch the video to hear the full interview.

 

 

April 28th 2019, 5:31 am

Governments across the Arab region must work together to foster digital growth

Wamda

Dr. Simon Galpin is the managing director of the Bahrain Economic Development Board (EDB) where he leads in foreign direct investment promotion and business development

Last month in Beirut, the winners of the 12th annual MIT Enterprise Forum (MITEF) Arab start-up competition were announced. Among the victors were a blockchain-based insuretech firm, a drug discovery platform, and greentech companies including a startup that incentivises consumers to swap cans and bottles for phone credits and discounts. The startups themselves were fascinating, but so were their origin stories, with winners drawn from all across Middle East and North Africa (Mena) region.

Realising our full potential

The innovation and entrepreneurship on display showed the full potential of what can happen if this region successfully gets ahead of the economic and technological disruption that is shaking up our economies on a scale not seen since the early days of oil. While we know that this region can produce successes, and that Arab ingenuity can compete with the world’s best, we still need to ask ourselves, what more can the Mena region to do to produce more break-out tech winners?

A driver of innovation

It has been said that the Arab region was late to the first, second and third industrial revolutions, and that it can’t afford to be late to the fourth. In the context of the fourth industrial revolution (4IR), winning startups like those recognised at MITEF have the potential to complete Mena’s transition from a mere consumer to a leading, global driver of technological innovation. But it is up to governments to create the optimal conditions to ensure they succeed.

Looking outwards

Arab governments can start by looking outwards to understand how their international friends and stakeholders are meeting the challenges and opportunities posed by 4IR. We can learn from well-established finance and technology hubs such as the UK, whose government has led the way with its hubs, clusters and regions approach. We can look to less expected sources of innovation too. Estonia became an unanticipated byword for technological excellence and achievement thanks to an intentional, committed move to e-governance.

Restrictive regulation

There are signs we are on the right track. The Mena region is already enjoying a fast-growing startup scene. But as the World Economic Forum (WEF) has noted, there is still some way to go. Outdated policies and restrictive regulation impede everything from obtaining a visa to registering a business. That is why Bahrain has introduced a host of new laws to encourage entrepreneurship, from a bankruptcy law based on Chapter 11, to a data protection law, to a regulatory sandbox to let next generation technologies prove concept. Other smart, proactive initiatives like Lebanon’s Circular 331 are having impact. But there are drags on this progress. Countries in the Middle East typically spend less than one percent of their GDP on research and development – by contrast, average investment from OECD countries is more than 2.5 times that. That has to change.

Collaboration key

Critical to successful change will be the measure of how Mena governments collaborate with and learn from each other. Intra-regional trade as a percentage of total trade is much lower than in other regions due to complex customs procedures and regional frictions. Technology can go some way to solving this, but we must put the basics in place across the region – stronger STEM education, better access to funding, better cross-border knowledge sharing and less inhibited regional data flows, if we are to really tackle entrenched issues.

Ecosystems learning from each other

One of the things that is clear is that ecosystems across the Gulf are now more interconnected than ever. At StartUp Bahrain, we have over 90 startups drawn from all over the region and across the world, attracted by the range of support we offer. At StartUp Bahrain Week, it was a genuinely regional event - with attendees from across Mena as well as international speakers. And we have 23 incubators and four accelerators, including pan-regional leaders like Flat6labs. But as governments, in cooperation with multi-lateral institutions, there is an argument that we can be even more connected and collaborative in the way we work together.

Progressive thinking

If Mena governments work together to implement progressive, human-centred policy and regulatory frameworks, our governments can foster an environment where our promising startup scene can become a thriving one with global impact. In Bahrain, we talk about the concept of TeamBahrain, where actors from across the public and private sector come together to make business happen. Something similar is needed across Mena. One day, we can be a part of the world where capital pools and startups can base themselves as a springboard to scale internationally. That would be something that would offer Addenda, Repzo, Ahmini and the other startups that won at MITEF an even greater prize that they won last month.

April 24th 2019, 10:39 pm

In conversation with Tarek Ghobar of PointCheckout

Wamda

Tarek Ghobar is the co-founder of PointCheckout, an online payment gateway that enables consumers to use their loyalty points and air miles to buy goods online within the Middle East and North Africa (Mena) region. Founded last year with co-founder Bashar Saleh, the company recently raised $600,000 in a seed round and has more than 1000 merchants signed up to its service in the region.

School friends Ghobar and Saleh studied in the same high school in Norway and 15 years later, convened in Dubai where they were both working in the entrepreneurship sector.

Ghobar founded his first company, IcySolutions while still at university studying aerospace engineering in The Netherlands. After raising almost EUR500,000 and scaling to 15 countries, he sold the company to one of its investors. Ghobar eventually joined Rocket Internet in Berlin where he worked within the Hellofood group, leading the company’s expansion to five countries in the Middle East.

Why did you become an entrepreneur?

I am definitely a believer that entrepreneurs are born. The passion of building companies is a lot closer to the heart for me than the passion of designing airplanes. But, the importance of my engineering education was super critical in trying to build a company, everything we’re approaching is from an analytical angle and I think an engineering background is very much key for entrepreneurs. I got involved with my first company before I even graduated, so entrepreneurship felt much more right.

You were the startup manager at the 1776 incubator in Dubai, what was that like?

I did that for two years, we got to a point where we had about 35 startups incubated and I was responsible for mentoring them, helping them raise funds and develop strategies day to day. It was an eye-opener. It gave me a lot more exposure to startups and their problems in the region. One of the main lessons I learned is there is no formula, every business is unique.

What advice would you give to other entrepreneurs?

From day one, surround yourself by people who can help you out, engage with everybody you can think of, investors, other entrepreneurs. Tell them: this is what we’re building, how can we work together, how can you help? It is better to engage with ones who will not copy your idea than fear the ones who might.

What were your main challenges in setting up PointCheckout?

A lot of the challenges were to do with the industry. The fintech and banking industry is a headache, that has a lot to do with the fact you’re dealing with banks and regulators. These are monsters that don’t move, if they do then it’s definitely not at your pace. The biggest challenge is to get the right partner on board fast enough. This is by far one of the things the fintech industry needs to get better at.

It takes four to five months for procurement, then security clearance which takes another three to four months and then the decision making which can take up to six months.

What is the biggest sacrifice you’ve made in becoming an entrepreneur?

I lost my hair, that’s one. You make sacrifices every day, but it’s a measured sacrifice – things you’re willing to let go, like stability, for that big reward and that’s not money, it’s the satisfaction of becoming a successful entrepreneur.

What will your industry look like in the next decade?

Both the loyalty and digital payment industries are growing at more than 20 per cent year on year globally. One of the core things we are changing is personalisation of the loyalty world using e-commerce. In the future, you will be rewarded in real time for things and brands you want. It’s about the small non-core experiences that will make customers loyal rather than ‘use my brand and get rewarded’.

April 22nd 2019, 10:31 pm

Tech in food: the transformation of an industry - Register your interest

Wamda

Tech in food: the transformation of an industry. Limited capacity, register your interest here.

Wamda is hosting a panel on April 29th - 6:00 PM, at Huna - One Third, an urban space for homegrown F&B talents, that will discuss how emerging technology has disrupted and altered the way food is produced, prepared and delivered to customers in Mena.

While the Middle East tends to lag behind in many sectors when compared to the rest of the world, it is arguably in the food and beverage (F&B) sector where the potential for innovation is most potent. The panel will highlight food tech trends in Mena, how tech is enabling new emerging business models, and give an overview on where the food tech sector is heading. Moderated by Wamda's Head of Media & Content, Triska Hamid - here are the startups joining the panel:

- Marwan Tarabay from The Leap Nation, a client-centric, revolutionary culinary concept.

- Mohamad Ballout from Kitopi, a kitchen network that cooks and delivers on behalf of other food brands.

- Hattem Mattar from Mattar Farm, an innovative meat farm and smokery.

Food tech innovation need not necessarily come in the form of deep or hi-tech, but rather from the regional startups’ ability to adopt and embrace new technologies. Having contributed to the shift in restaurant operation, each of the above startups will tell us more about the concept of a cloud kitchen, the impact of food delivery apps on brands and how they think social media is changing consumer tastes, habits and desires.

Join us on April 29th, at 6:00 PM. Register your interest on this link, spaces are limited and are on first come, first serve basis.

Due to limited capacity, and to make sure that you have an allocated seat at the event - please wait for Wamda's confirmation email after you have completed your registration. 

April 22nd 2019, 9:11 am

The state of social media in the Middle East

Wamda

Consumers in the Middle East and North Africa (Mena) are among the most active users of social media platforms. The region’s large youth population and high mobile penetration rate have made it the ideal market for companies like Instagram and Snapchat, but it is Facebook that remains the most dominant platform for the Middle East with more than 180 million users, up from 56 million just five years ago.

In a report recently published by Crowd Analyzer, which analysed more than 172 million interactions for its State of Social Media report, social media users in Mena are becoming more active and engaged online where conversations are taking place about brands, businesses and services alongside fashion, politics and religion.

The automotive industry was the most talked-about sector across all social media platforms in 2018 in Mena, followed by the telecommunications industry and the media industry. The financial technology (fintech) sector came in last with only 5 million interactions.

The annual report was created in collaboration with Hootsuite and public relations firm APCO Worldwide and provides an overview of the languages used, gender participation, sentiment analysis and location analysis across several industries, including automotive, telecommunications, finance, banking, fintech, ride hailing, media and e-commerce.

“Our findings from this year’s report offers readers fascinating insights on how social media continues to shape the way people use, share and access content,” says Ahmed Saad, chief executive officer and co-founder of Crowd Analyzer.  “Relevant data, information and knowledge are fundamental drivers of business success in this part of the world and are the keys to understanding audiences.”

Arabic was the dominant language used across almost every platform and all industries with the exception of fintech, where English was more commonly used. However, when broken down by country, the statistics show that while 82 per cent of users in Egypt and 96 per cent of users in Saudi Arabia opted for Arabic, in the UAE, 60 per cent of users prefer to post in English.

“The UAE is the trickiest market, because you don’t just have to post in English and Arabic, you have to post in Hindi and Urdu and other languages too,” says Bahaa Galal, chief technical officer and co-founder of Crowd Analyzer.

Out of the three categories that were analysed - males, females and businesses, it was the businesses that were the most interactive. Conversations relating to the telecommunications and banking sectors were led mainly by men whereas women dominated conversations about e-commerce and the media industry.

While Facebook contends with privacy issues following the Cambridge Analytica scandal and Twitter is still seeking ways to prevent online bullying, these concerns are not being played out in the region.

Instead, userbases are growing on every platform, driven mainly by Generation X, those born between the 1960s to the early 1980s.

Saudi Arabia

According to Bain and Company, Saudi Arabia has a social media penetration rate of 75 per cent. The most popular platform in the kingdom is Snapchat with almost 14 million users with an almost equal split between male and female users. With messages and posts that disappear after 24 hours and notifications if someone takes a screenshot, the level of privacy that Snapchat affords is one reason why it is so popular in the country.

“The Saudi community is closed, and people want something open to share something on. This is why Snapchat has evolved in the GCC, it’s very secure and you know these texts won’t last so you’re free to experiment and experience your own interests and desires,” says Galal.  

In a similar vein, the ability to post anonymously on Twitter has propelled the platform as the second most popular in the country with the 11 million Saudi users ranking the most active and engaged in the world.  

Twitter really took off in the country after Prince Waleed Bin Talal invested $300 million in the company in 2011. In a constricted political society, hiding behind a pseudonym has enabled users to air their views without much fear of repercussions, although the majority are tweeting about music and gaming.

The number of Arabic users on Twitter grew by 100 per cent on the platform from 2017, led mostly by Generation X, who now also make up 4.2 million of the 15 million Facebook users in Saudi. Meanwhile, it is the millennials who are driving growth for Instagram, which now has 13 million users in the country.

Across all the platforms in Saudi Arabia, users mainly showed interest in religion, nationalism, social development and culture and interacted primarily in Arabic.

“KSA has always had a strong national identity, it comes as no surprise therefore that online users prefer using Arabic to communicate,” according to the report.

Egypt

Social media in Egypt was once hailed as the tool for hope and change, helping to bring about the revolution of January 2011. It was during this time that the userbase for both Facebook and Twitter boomed and while growth for the latter has dissipated somewhat, Facebook remains the dominant platform for Egyptians with 40 million users, a growth of 20 per cent since 2017.

With greater governmental crackdowns on dissidents in recent years, it is not so much the desire for political change driving Egyptians onto social media platforms, but rather the proliferation of cheaper Android smartphones and a competitive telecoms market. The social media penetration rate in the country stands at 40 per cent according to Bain and Company.

There are now a little over 2 million Twitter users in the country, a growth of 18 per cent driven mostly by millennials who are tweeting mainly about food and travel.

Instagram is the country’s second most popular platform with 11 million users posting mainly about fashion, music and travel.

There are 3.5 million Snapchat users, of which more than 2 million are female who tend to consume primarily the news, followed by lifestyle and fashion topics.

Across all the platforms, users in Egypt were interested in a much broader variety of topics, including politics, religion, sports and social development.

UAE

The UAE’s diverse population is evident in the country’s social media trends. English language users tend to outnumber Arabic users while social media penetration stands at 99 per cent according to Bain and Company.

Facebook is the most popular platform with 8.8 million users, similar to the userbase recorded in 2017. Instagram has added 700,000 users over the year and now has 3.7 million users while Twitter boasts 2.3 million users, a rise of 15 per cent from 2017 driven mostly by Generation X. The country has the lowest userbase for Snapchat at just 2 million.

The country also has some of the region’s most popular social media influencers including makeup artist Huda Beauty who has 36 million followers. An analysis of the most followed social media influencers indicates that the UAE’s interests lie predominantly in culture and nationalism, with users expressing interest in leaders and artists. As of June 2018, social media influencers in the UAE must obtain a $4000 yearly licence for any commercial work on such platforms.

Chinese Apps

China’s social media platforms go beyond messaging and updates to apps that encompass ride-hailing, financial technology (fintech) and e-commerce. One of the most popular Chinese social media networks to have made a mark in the region is Tik Tok, which launched last year in partnership with Emaar, developers of the Dubai Mall. Tik Tok is a short-form mobile video platform and claims to have more than 500 million users worldwide.

As foreign direct investment (FDI) from China grows in Mena and the number of Chinese tourists and students rise, they will likely bring more of their technology and services to the region – including social media platforms.

Online Conversations

Generally, people are more likely to post about a bad experience with regards to services than a positive one and this can have a detrimental impact on a business.

“The conversation is happening on social media,” says Galal. “If people have a bad experience with your product, they will post it on social media and your business will be impacted.”

When former employees at Swvl, the Cairo bus-booking app complained about the company’s culture on Facebook, the post went viral, spurred news stories and impacted the company’s reputation.

“It all started with one social media post. That kind of impact can happen all the time and you need to react to your customer quickly,” says Galal who also highlighted the importance of social media to generate sales. With regards to e-commerce, consumers in the Middle East use search and social media for research with the latter playing an important role in purchasing decisions.

One small business in Dubai, a wholesale bakery called For The Love Of Bread, believes that more than 90 per cent of its customers have come through its Instagram account.

So the best platforms to use to target consumers in Egypt according to Galal is Facebook with a healthy advertising budget dedicated to it. In Saudi Arabia, Twitter is likely to churn the best returns if you post in Arabic and in the UAE, it is Instagram that will engage the most number of users since it transcends the language barriers.

Wamda Capital has invested in Crowd Analyzer.

 

 

 

 

April 20th 2019, 10:49 pm

The Middle East’s snail-pace to the Fourth Industrial Revolution

Wamda

Suzan Elsayed is a Google Policy Fellow at Wamda and an independent researcher focusing on the Fourth Industrial Revolution and future of jobs in Middle East and North Africa (Mena). She previously worked as a strategy consultant in the GCC and London.

 

Every report about the Middle East states that the region has been blessed with a youth bulge, but the blessing becomes a curse as the unemployment rate is the highest in the world at 21 per cent. However, before we start pointing fingers and blaming different institutions and systems, we need to understand that they are all interlinked, it is a complex situation without a single overarching reason.

In 2016, the World Economic Forum (WEF) introduced The Fourth Industrial Revolution (4IR), a concept developed by Klaus Schwab, founder and executive chairman at WEF. In short, it is the societal, political and economic impact of technologies like artificial intelligence (AI), robotics and internet of things (IoT).

As automation and AI start taking a more prominent role in our lives and developed nations take the lead in setting the emerging trends, the key question is how can the Middle East stop playing catch up with the rest of the world and become part of the trendsetters through the empowerment of research and development (R&D).

 Figure 1: Timeline of Industrial Revolutions

 

The 4IR has been gaining traction on top of the ‘Knowledge Economy’ that has been promoted across the regional governments’ visions for the coming years till 2030. As the interconnectivity and access to information and systems increase, the world is becoming more connected and industries and markets become progressively interdependent.

The Middle East is presented as an abundant market for opportunities for global businesses and investors due to its population and its tech-savvy youth. This is demonstrated through the rise in the tech entrepreneurship and the number of science, technology, engineering and mathematics (STEM) students who graduate from universities. While it may seem promising, there is still a lack of fundamental support for R&D and innovation that could push the Middle East as a trendsetter.

The Fourth Industrial Revolution has been forewarning nations and related stakeholders of the increased utilisation of artificial intelligence and the introduction of robotics. This is aimed to utilise the human mind in more creative activities rather than repetitive routines.

This is already visible in our daily lives with examples such as self-checkout tills at supermarkets or AI-powered chatbots and telephone customer service. But, almost all of these are imported technologies and there is a huge gap in the production and export of research and innovation from the Middle East. A recent study conducted by Strategy& states that R&D expenditure in the UAE and Saudi Arabia amount to 0.9 per cent of their gross domestic product (GDP) respectively. Egypt’s R&D expenditure is only 0.7 per cent of its GDP. On the other hand, the 36 countries that comprise the Organisation for Economic Cooperation and Development (OECD) which includes the US and Germany, spend on average 2.5 per cent of their GDP on R&D.  

The study stresses the importance of increasing R&D spending to boost GDP, but this can only be achieved by setting the right foundations for companies, innovators, and researchers.

The need for home-grown R&D ecosystems

Amid the economic plans that highlight a knowledge economy, there is a key component missing – local research and development. The education system across the region lacks significant infrastructure, motivation and skills needed to nurture home-grown R&D, instead, much of it in the region is imported at high cost with a limited amount of knowledge transfer to the local populations.

For international companies, the region is primarily used as a sales and marketing hub and tends to become a ‘trendfollower’ rather than a ‘trendsetter’. This can also be found in the academic front as many universities in the Middle East are not ranked or considered as global destinations for innovation and research. One of the prominent reasons is the lack of a conducive R&D ecosystem not only in the universities but in the society overall. While the 4IR emphasises on innovation in a variety of fields, the Middle East academic front needs to catch up.

Universities play an integral role in the ecosystem of a nation focused on the knowledge economy as they are one of the few places that bring together different skillsets under one roof with the main goal of analysis and innovation.

However, with limited funding for research to universities, PhD researchers and academics – it cultivates a difficult environment for knowledge production and R&D. In the Middle East, a number of countries focus on expenditure on facilities and physical infrastructure rather than the execution of prioritised research. Thus, to diversify the economy and customise the 4IR to meet the region’s needs, the expenditure would need to shift to support the R&D ecosystem.

This would incentivise individuals to create practical research that can face some of the socio-economic challenges of the region or create deep, homegrown and local innovations. The lack of R&D prevents many startups from establishing a base in the region as they are not equipped with the right space to innovate and test. Several Mena-based technical startups, like Medicus AI, may have started in the region but eventually moved to emerging or developed startup ecosystems with better access to R&D and more developed regulations.

The need for clear, prioritised policies for extravagant visions

Over the past decade or so, there has been a trend for outlining extravagant and ambitious country visions in the region that are usually developed by management consulting firms. The visions support the knowledge economy and have good intentions of continuing the development of the nations to make them more favourable to foreign direct investment (FDI) and to reduce the recurring socio-economic issues facing the Arab region. Specifically, all the visions support the promotion of innovation and entrepreneurship with a focus on the youth being the pioneers of progress towards Industry 4.0.

To have R&D included in country visions is one crucial aspect and to prioritise it to align with economic priorities with clear policies is another critical aspect. The recent study by Strategy& also observed the lack of governance structure and framework for R&D in the region, specifically, the GCC.

In order to increase the contribution of startups, the private sector and other individuals in society, will require a firm governance structure that includes clear policies for research fields, funding, aligned communication among the different stakeholders and clear communication to the public.

For instance, in Germany, the federal government formulated the ‘Hightech-Strategie’ where it highlighted the several components of R&D in Germany. This included the required and relevant topics from education, innovation, and technology. The strategy was launched in 2006 and was updated in 2014 to last until 2021 with combined efforts across all the ministries. Since then, it has triggered investments by the federal government reaching up to €27billion.

To reach the advancement and success of Germany might take the countries in the Middle East a while as there are fragmented players and siloed stakeholders in the ecosystem. Nonetheless, in the meantime, fundamentals will need to be revisited such as the education system and changing the cultural mindset of individuals. A large part of this means there needs to be a comprehensive and deep re-education for society.

For instance, according to Egypt’s Ministry of Trade and Investment, many small to medium sized enterprises (SME) in Egypt shy away from digitisation as they do not foresee its future benefits and instead see it as a costly endeavour.  

International companies such as Siemens can then be injected into the ecosystem to try to engage the society through knowledge transfer which brings us to the same issue of the high costs of importing knowledge and the lack of customised 4IR to the country, or region.

The majority of the region’s private and public sectors still have a long journey to go through before they get to the 4IR, as they are currently in the early to mid-stages of the Third Industrial Revolution (3IR) and the progress to digitisation. Thus, many of those extravagant visions require a strong coordination and communication plan to ensure all the society are involved and the visions are based on aligned needs and priorities across the sectors.

The Fourth Industrial Revolution may seem like a buzzword utilised by the elites, but it will no doubt impact the rest of the population sooner or later and our region is not hiding away from it.

With a youth bulg” that doesn’t seem to be slowing down anytime soon and a growing demand for progress with socio-economic challenges such as job opportunities or the demand for an improved health or education system, it is critical to start having fruitful dialogues that result in action, soon.

 

April 17th 2019, 8:04 pm

Creating a startup ecosystem in Upper Egypt

Wamda

Some 500 kilometres south of Cairo, entrepreneurs in Upper Egypt are attempting to emulate the capital’s thriving startup scene. Across the four governorates of Assiut, Sohag, El-Minya and Qena, budding entrepreneurs came together last month to attend RiseUp Week, a hackathon set up by RiseUp, the organisers of one of the Middle East’s largest startup events.

Hoping for a chance to win up to EGP30,000 ($1700) in funding, the event saw five winning teams from each of the four governorates battle it out for the prize money.  

“Our slogan for RiseUp week is ‘Look South’ and we wanted to look south because we believe it has resources. People are very active and passionate but need a lot of development and skills,” says Mahmoud El-Heny, project manager of RiseUp Week.

Much of Egypt’s opportunities and resources are centralised in Cairo and Alexandria, and so Upper Egypt has traditionally been marginalised, relying mostly on tourism and agriculture to stimulate its economy. According to the World Bank, Upper Egypt’s poverty rate is three times that of the metropolitan cities of the country, unemployment rates are also higher in this part of Egypt and the gender gap is wider.

Now, it is entrepreneurship that many feel is the opportunity to better the economy of the south of the country.

Buoyed by a $1.5 billion fiscal package directed at developing the four governates of Upper Egypt, the region is commanding more attention. RiseUp Week attracted considerable interest from both private and governmental investors.

“We realised that there is an opportunity in Upper Egypt, minds are starting to change, and there are startups that cannot find investors,” says Mohamed Farouk, chief executive officer at Nile Angels, a network of angel investors founded in 2018 to support startups in Upper Egypt. “So, we thought to have an angel network here, to be close to the startups and invest in them.”

The Middle East’s first angel network, Cairo Angels, has also started to pay attention to opportunities in the south. Among its portfolio of companies is Simplex, an Upper Egypt startup that offers industrial solutions and manufactures computer numerical control (CNC) router machines for the Egyptian market.

One of the most successful startups to have emerged in this part of the country is Electrobekia, which collects and recycles e-waste and has secured EGP100,000 from the Technology Innovation and Entrepreneurship Centre (TIEC).

“We decided to launch our startup here because we know the access and the know-how of this region and there are people who already work on this type of business in Alexandria and Cairo, unlike here where there is less competition,” says Safaa Youssef, business development manager at Electrobekia.

The company currently operates across Qena, Sohag and Assiut with plans to expand to Luxor and Aswan.

But while there may be less competition, there is also a lack of funding, skills and direction.

“What we found here in Upper Egypt is that people are really thirsty for any kind of mentorship and direction. There is a potential here but what they really need is a focus of training and programmes to develop the calibre that is here,” says Muhammed Hegazy, investment associate at Cairo Angels.

The calibre and ideas that tend to have potential to scale move to Cairo or Alexandria to start.

An example is The Meal Kit, an e-commerce startup that delivers pre-portioned food ingredients and recipes that are ready to cook in under 30 minutes. Ahmed Fouad, co-founder of The Meal Kit was raised in Upper Egypt and studied there but then ended up launching his company in Cairo.  

“When we started The Meal Kit, it was not possible to start here. The idea is relatively new in Egypt and so we had to launch it in a place that would take in that idea, which was Cairo. People in Cairo have higher purchasing power and pay more for their food than any other place in Egypt. Also, there is a higher adoption for technology and e-commerce in Cairo than in Upper Egypt,” says Fouad.

Cairo’s maturity is not just limited to its purchasing power. The ecosystem is also more mature with more opportunities for funding, mentorship and skills development.

“Startups launching and funding started in Cairo around 2011-2012. The ecosystem in Cairo flourished and is much better now. However, here, in Upper Egypt, it is as if we are still back in Cairo’s 2011,” says Fouad.

For many of the hackathon’s participants, one main struggle is having to travel all the way to Cairo to access the workshops and events that take place there. Tarek Ragab, a participant at the hackathon and a member of one of the winning teams whose idea for a startup was an on-demand delivery service in upper Egypt, shares the same problem.

“When we were checking for incubators or accelerators, for example Flat6labs, we found out that they require that we are based in Cairo for the four-month programme. We try and apply to any events or competitions that are organised here such as RiseUp Week,” says Ragab.

The government is keen to develop the ecosystem in Upper Egypt and has been encouraging events like RiseUp’s hackathon in the hope that startups will emerge to solve the region’s specific problems.

“We expected to find more of agriculture-technology startups but so far what we saw is that the startups here are trying to mimic ideas in Cairo which I do not really recommend because Upper Egypt has its own specific problems so if they can focus more on agriculture-technology, there is a great opportunity in that,” says Hegazy.

Others also believe Upper Egypt is best placed to develop financial technology (fintech) solutions as most of the country’s unbanked are in the south.

“Upper Egypt still needs a lot of work. People are very excited and really want to learn. When a market is not serviced, there are more problems and consequently there are more opportunities for entrepreneurs to thrive. They just need the experience and information. They are the ones who can solve their own problems,” says Ahmed Adel, business mentor at Fekretak Sherketak, an initiative from the Ministry of Investment and International Cooperation which aims to support entrepreneurs all over Egypt.

With the establishment of Silicon Waha technology parks in Assiut and Aswan, events like RiseUp Week and more government and investor interest in Upper Egypt, it is only a matter of time before its ecosystem matures.

“Cairo might have more opportunities but for me, I do not want to move and stay there or start my startup there. Everyone is running to Cairo for jobs and startups but we do really need this in Upper Egypt. Cairo is already saturated and here, we really need to work and create job opportunities for ourselves,” says Magdolin Aziz, one of the participants at the hackathon.

 

April 16th 2019, 10:44 pm

MerQ closes its seed funding round

Wamda

Egypt-based artificial intelligence (AI) company MerQ has closed its seed financing round from Ahmed Kamal Selim, a financial investor, with a minority stake in the company valued at $800,000. MerQ will use the investment to develop its products, mainly Sally, a chatbot through Facebook that introduces Egyptians to all credit card systems within the country.

"We are delighted to have been able to complete our first financing round shortly after the launch of our first products into the market namely “Sally”. This financing allows us to expand our service offerings within the financial services ecosystem and supports our expansion plans in the country,” said Walid Ghalwash, founder and chief executive officer (CEO) at MerQ.

The company aims to cover various topics of financial literacy in banking and non-banking services and to help in financial inclusion by assisting the Egyptian public in making financial decisions through raising awareness on banking and financial sectors.

"We are targeting with our new investor another round of financing during Q3 2019 to launch two new products within the framework of financial services that support the state's vision for financial inclusion and the use of technology to increase the penetration of financial and banking services among Egyptians,” added Ghalwash.

Sally’s service “@SallyCreditCard” provides users with comprehensive information when deciding on different credit cards available across various banks through its artificial intelligence chatbot offered through Facebook messenger.

"The investment in MerQ comes from my personal interest in artificial intelligence and financial inclusion that is set in the state’s priorities to keep abreast of the global digital economy," said Kamel.

April 16th 2019, 10:44 pm

eyewa raises $7.5 million in Series A

Wamda

UAE-based eyewear e-commerce player eyewa has raised $7.5 million in a Series A round with plans to expand across the Middle East.

The investment was led by Wamda Capital with participation from GS shop, Equitrust (the investment arm of Choueiri Group), 500 Startups and Faith Capital among others. It brings eyewa’s total funding to date to $8.6 million.

Founded in August 2017 by Anass Boumediene and Mehdi Oudghiri, eyewa offers contact lenses, sunglasses and prescription glasses and has seen its team of two grow to 25 since its launch.

“Eyewear is a $6 billion market in the Mena [Middle East and North Africa] region, and it is not being serviced properly online. The penetration rate is less than 3-4 per cent in this category, there is a lot of growth ahead of us,” said Boumediene.

The company currently has operations in the UAE and Saudi Arabia and is now looking to boost its operations and growth across the region.

“Looking at global benchmarks of eyewear e-commerce, it is a winner takes it all vertical. Our series A will help us solidify our market leadership in eyewear not only in Saudi Arabia and the UAE, but also expand into other Mena markets,” said Oudghiri.

eyewa will plans to " further invest in our local infrastructure and build a bigger Saudi-based team, so that we are closer to our customers”, said Abdullah Al Rugaib, the Saudi Arabia managing director at eyewa.

eyewa was recently selected as one of the top 100 Arab startups by the World Economic Forum and is currently the Middle East’s largest online eyewear retailer.

“Our investment in eyewa is a continuation of our thesis of investing in category defining vertical e-commerce businesses that are set to own their respective spaces. We believe eyewa is very well positioned to dominate the online eyewear segment,” said Khaled Talhouni, managing partner at Wamda Capital. “The team at eyewa have demonstrated an uncanny ability to scale their business and we are excited to become part of that journey alongside our co-investment partners.”

April 16th 2019, 10:44 pm

LUNCH:ON secures further $2.5 million

Wamda

LUNCH:ON has secured a further $2.5 million in the final close of its Series A, bringing the total funding round to $5.5 million.

The investment was led by Wamda Capital and Global Ventures, with B&Y Ventures, Derayah VC Fund, Mindshift Capital, Shorooq Investments and Vision VC coming into the round since the initial close was announced in February.

The investment will be used to expand the food technology startup’s presence in the UAE and expansion into Saudi Arabia.

Founded by Mohammad Al Zaben and Dana Baki in February 2016, LUNCH:ON partners with restaurants to offer office workers a selection of curated meals from three different restaurants at discounted prices.

“We identified a gap in the market as it relates to affordable lunch options for working professionals,” said Al Zaben. “LUNCH:ON offers a simple solution that saves customers both time and money.”

The company now works with 200 restaurants in Dubai and delivers to more than 500 offices across the UAE. Its Dh39 monthly subscription ‘Pro’ service offers each meal at a more discounted price of Dh25 and the company recently launched a catering service for corporates.

“Companies are now able to order platters, plan food for any kind of event or order the traditional LUNCH:ON boxed meals for their teams with just a few clicks,” says Baki. “This part of the business has taken off quite nicely as we have learned that corporate catering is a huge pain point for those involved, that no other regional players are addressing adequately.”

The Middle East's food technology sector is one of the most active and the restaurant-to-door online delivery service is worth $3.5 billion in the UAE alone with 60 per cent of the population using a food delivery app on their smartphone or tablet. 

"We believe that this latest round will allow the company to expand its geographic footprint as as well venture into new offerings that will help redefine the food space," said Khaled Talhouni, managing partner at Wamda Capital. 

April 16th 2019, 10:44 pm

Inagrab secures funding from Faith Capital

Wamda

Source: StartUp Bahrain

The Bahraini startup, Inagrab, a company with a vision to help as many businesses scale using innovative solutions has secured follow-on investment from Faith Capital, a venture capital firm based in Kuwait that invests in talent throughout the Mena region. This news comes after Inagrab also secured funding from 500 Startups earlier this year.

Launched in 2017 by co-founders Hussain Haji and Mustafa Marhama, the startup aims to support local and international businesses by helping them reach their products to a larger audience. Using data analytics, Inagrab gives access to market intelligence, by informing businesses where and when to promote their product.

Speaking to StartUp Bahrain, Inagrab has stated that they will utilise the funds to support the scaling of Inagrab’s core product, “Dalooni“, which is a service that bridges the gap between an organisation and an untapped sales force consisting of the unemployed and anyone who will need an extra source of income. The app is another way that the startup supports local and international business by expanding their market reach and marketing efforts. 

Hussain Haji, the co-founder of Inagrab spoke to StartUp Bahrain and said, “We are scaling to help bridge a very important gap in the market, that shouldn’t be left unaddressed. We strive to make everyone’s lives a bit easier.”

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April 16th 2019, 10:44 pm

Foodics closes bridge round

Wamda

Source: MenaBytes

Foodics, a Saudi startup that provides cloud-based point of sale solutions to food and beverage businesses including restaurants and cafes in the GCC has closed its bridge round from Kuwait’s Faith Capital and others, the startup announced today, without disclosing the size of investment. It is the second disclosed financing round for Foodics, the first one being $4 million Series A that it had raised in late 2017.

Founded by Ahmad Alzaini and Musab Alothmani in 2016, Foodics’ iPad-based restaurant management platform that runs on cloud, enables restaurants and food chains to optimise transactions, inventory, employee scheduling, logistics, delivery, loyalty programmes and integrate with hundreds of third-party apps.

The startup had originally started as a software development agency for restaurants but transformed into a product-based software as a service (SaaS) startup in 2016.

Foodics claims to have onboarded 4,000 clients and deployed 10,000 terminals all over the Middle East since its launch in 2016. The startup in a statement said that their solution is being used by all types of F&B businesses including restaurants, food trucks, cafes, bakeries,  and fast food chains across the region.

Ahmad Al-Zaini, the Co-Founder and CEO of Foodics, commenting on the occasion, said, “Being present in five locations across the Mena region and having processed more than a billion orders, our mission at Foodics is to provide a restaurant management system that is built with our users in mind and grows with their needs.”

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April 16th 2019, 10:44 pm

Property Finder acquires Bahrain Property World

Wamda

Source: MenaBytes

Dubai-based Property Finder’s shopping spree of regional property websites doesn’t seem to be ending anytime soon. A week after announcing the acquisition of its Dubai-based competitor JustProperty.com, Property Finder this morning has announced the acquisition of Bahraini property portal ‘Bahrain Property World’ without disclosing the financial details of transaction. The Dubai-based company two weeks ago had also increased its stake in Turkish property portal Zingat to 37 per cent after making an investment of $12 million in it.

 

All these acquisitions come almost six months after Property Finder raised $120 million from General Atlantic in one of the largest investment rounds secured by a startup from Mena.

 

Property Finder has been active in Bahrain since 2013 through its property portal PropertyFinder.bh that receives over 50,000 monthly visitors on average. Bahrain Property World, on the other hand, was apparently launched last year, and currently receives 15,000 monthly visitors on average.

 

Michael Lahyani, Founder and CEO of Property Finder Group, said: “This is one of three high-powered strategic moves since closing our latest round of investment led by General Atlantic. The first being the increase in our share in Turkish portal Zingat, and our recent acquisition of UAE competitor JRD Group. We are very happy to further instill our confidence in the Bahrain region and continue to invest in a market in which we see a lot of potential and have been present since 2013.”

 

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April 16th 2019, 10:44 pm

In conversation with Sami Al Ahmad of Marj3

Wamda

For Sami Al Ahmad, applying to study abroad and finding a scholarship was a lengthy and tedious process when the Syrian national was looking to continue studying dentistry after the war in Syria broke out in 2012.

After relocating to Cairo, he launched Khatwa, an online platform to help Syrian refugees study and work in Egypt. The platform helped some 1200 students and provided workshops to help them with the transition to a new life and job.

A few years later, Al Ahmad realised that finding scholarships was not a problem limited to just Syrians in the country and so with his co-founders Abdo Samy and Ahmed El Gebaly, the trio founded Marj3 in 2016, one of the region’s largest databases of scholarships available to students.

Today, Marj3 boasts 2.5 million visitors per month and was last year selected as startup of the year by the Global Entrepreneurship Network (GEN) Egypt. It has helped more than 70,000 students access education in both Egypt and abroad and the company is now in the process of adding a dedicated study abroad portal onto its website.

We spoke with Al Ahmad about his entrepreneurial journey.

Why did you become an entrepreneur?

When I started Khatwa in 2013, I did not know what the meaning of entrepreneurship was. I was learning by doing and learning from my mistakes. Years later, I started to learn more about the structure of what I was doing and that was the reason behind Marj3. I learned more about what a business model is, how I can make it more scalable and knew what kind of startup I was looking for.

In the beginning my family felt that I was playing and it was very hard to convince them or even people around me that I did not want to work as a dentist. They thought it would be crazy to give up all those years of studying. I told them, “I am building my career and I am really passionate about this place.” For me, entrepreneurship is not only about passion. It has to be both a gift and hard work because as an entrepreneur you have lots of pressures. We have a lot of hard times.

What is the biggest sacrifice you have had to make?

Not working as a dentist. When you start your startup, you will work on it when you are a free as a side thing. By time, you work 24 hours, seven days a week with no vacations or holidays. Also, we do not see our families or friends a lot because we spend most of our time working.

What was your biggest challenge when starting out?

We got accepted on to the Flat6Labs accelerator programme but before that, we had applied to so many accelerators and competitions, but we did not get accepted. We felt that maybe we were doing something wrong. But then we got accepted onto Flat6Labs and our numbers increased ten times. After the acceleration, we started looking for investment and that was challenging but then again, we got a grant. Your co-founders will help you to get through those times.

What is the best lesson you have learned?

To always stay ahead, to always think of what you can do to make the users happier and that is what increases the lifetime value for them. It is good to be satisfied but it is also good to always have a challenge because if you do not have one, you will not make any updates and you will be out of the market if someone comes up with something more innovative.  

What will your industry look like in the next decade?

I believe it is a promising sector, education is one of the main needs for people, so it has a lot of impact with great business opportunities as well. I think we will see good investments coming soon into education startups.

April 16th 2019, 10:44 pm

Jumia shares “pop” 67 per cent on NYSE debut

Wamda

Jumia, Africa’s largest e-commerce player, went public today on the New York Stock Exchange with a price of $24.50 per share at the time of publishing, a 67 per cent premium on its initial public offering  (IPO) share price of $14.50. While trading has only been in effect for less than two hours, and the stock might not be able to maintain this price range for the rest of the day, this “pop” reflects a big vote of confidence in Jumia and its pan-Africa growth narrative. If the stock continues to hold its value over the next few weeks, other tech and e-commerce players in the wider emerging ecosystem might look to replicate Jumia’s move to go public. With participation from Mastercard who invested over $50 million in the IPO, the company raised just shy of its $200 million target, pricing its stock in the middle of the initial range indicated of $13-$16. 

At its current trading price, Jumia is valued at more than $1.9 billion, representing a 1.9x multiple on 2018’s gross merchandise value (GMV) of about $940 million and 36x multiple 2018’s net revenues of $52 million. That is a substantial premium to Souq’s valuation of $580 million which had very similar GMVs and gross margins when it was sold to Amazon. This is a further indication of a wider disconnect between private and public investors and acquirers, which will likely embolden founders and venture capitalists’ efforts to opt for IPOing over merger and acquisitions options.  

While an IPO “pop” is a good indication of public interest in a company, a 67 per cent jump in share price means the company was undervalued by its investment bankers and IPO participating investors, especially considering the stock was not priced at the high end of the range, at $16 per share. This miscalculation insinuates a disconnect between public investors and IPO appetite. Additionally, in light of Lyft’s dismal IPO performance (down 25 per cent from its trading high on 29 March 29), public markets are questioning private market valuations. Companies like Pinterest and Uber are being valued lower than they initially anticipated as they prepare to go public. Bankers and investors in Jumia’s case likely wanted to avoid a disappointing debut, opting to err on the conservative side as they priced this IPO.

Jumia was founded in 2012 by Sacha Poignonnec and Jeremy Hodara, with early support and financing from Germany-based Rocket Internet. It operates across 14 markets in Africa, the largest being Nigeria. The business continues to grow at rates of 50 per cent in topline, as Africa remains a largely untapped market for e-commerce players due to entry barriers resulting from challenges in payments and logistics. Along with socio-political challenges, Jumia gains a big advantage over other existing and prospective market entrants.

Wamda will be publishing a more detailed piece on Jumia’s journey going public towards the end of April.

April 12th 2019, 12:03 pm

Saudi-based Haseel raises investment for its mobile-only fresh fruits and vegetables ecommerce platf

Wamda

Source: Menabytes

Riyadh-based mobile-only fresh fruits and vegetables ecommerce platform Haseel has raised an undisclosed sum of investment in a round led by Riyadh Taqnia Fund and joined by Vision Ventures and 500 Startups, Riyad Taqnia Fund announced on Twitter today. A Riyadh-based information technology company Sure Technologies that itself had raised an investment form Riyad Taqnia Fund almost a year ago, also joined the round. And per RTF’s tweet, Nayyara, an events company that apparently runs and operates business lounges and banquet halls also participated in the investment.

Even though the size of investment was not disclosed, it is safe to assume that it’s a seven-figure USD considering the investors involved.

Founded by Sultan Al-Hadab and Ahmed Al-Himsh last year, Haseel allows users to order fresh fruits and vegetables through its mobile app. We gave the app a try and the ordering process is pretty similar to that of grocery apps in Saudi.

The users can search or browse the products to add whatever they’d like to buy to their cart. When checking out, they’re asked to select their address on the map, select a time slot (there are seven slots between 10 am to 10 pm) for delivery, choose their preferred payment method (cash, credit card or Haseel balance), add notes if they like and place the order.

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April 12th 2019, 8:29 am

BECO Capital invests in Shedul's Series B

Wamda

Source: Menabytes

Shedul, a London-headquartered salon and spa booking platform that has a big presence in the region through one its global offices in Dubai, has rasied $20 million Series B at a valuation of $105 million, the startup announced today. The round was led by French VC Partech, Germany-based Target Global, our own (from the region) BECO Capital, and New York-based FJ Labs. BECO Capital had first invested in the company in Jun 2017. This latest round was also joined by Niklas Östberg, founder and CEO of Delivery Hero. The Series B takes total capital raised so far by Shedul to $32 million. Dubai-based MEVP, having invested in Shedul’s seed in 2016, is also one of the (early) investors in the company.

This round, per statement by Shedul was oversubscribed with additional secondary transactions of $3 million, which also included MEVP selling a part of its stake in the company for 17x returns. 

Founded in 2015 by William Zeqiri and Nick Miller, Shedul, in their own words, is a SaaS-enabled marketplace for salons and spas that helps them streamline their business operations. Shedul’s free online booking software comes with different features including a built-in POS, invocing, receipt, taxel and calculations, online bookings through website, Facebook, widgets or Shedul’s recently launched consumer marketplace Fresh.com, activity dashboard and more.

The startup claims to have a customer base of merchants in 120 countries, with most of them in the United States, United Kingdom, Australia, and Canada. Shedul also said that they’re helping these merchants booking over 8 million appointments every month, at a value of over $270 million.

“Growth in active merchants is expanding at an average rate of 20% quarter-on-quarter, making Shedul.com the world’s fastest growing beauty and wellness platform. In just a few years since launch, the platform is on track to process $6 billion worth of appointment bookings by the end of 2019,” said the company in a statement.

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April 12th 2019, 8:12 am

Pivots and failures: The Wasla Browser story

Wamda

About nine out of every 10 startups in the Middle East fail, yet failure remains to be viewed with disdain. But with each failure comes an opportunity to learn and to start again. Serag Meneassy and Taymour Sabry are now on their third venture together, Wasla Browser. We spoke with them both to get an insight into their journey and how they managed to stay resilient.

The pair were school friends in Egypt and both knew from a young age they wanted to become entrepreneurs. Meneassy studied engineering in Boston and Sabry studied international business in California.

“Life drifted us apart but then by coincidence, we both moved to Dubai after graduation,” says Meneassy who worked as a consultant while Sabry interned at Taskspotting a tech company which received funding from Wamda Capital.

“I was responsible for trying to build different businesses to complement the initial product. It was a very difficult, different and eye-opening time because you were basically hunting for opportunities,” says Sabry.

The pair then joined Germany’s Rocket Internet, known for building startups based on successful models seen elsewhere in the world, where with another two co-founders they launched Foodora, a food delivery company.

“Their approach at Rocket was very fast-paced, we were able to see how to take a startup and scale it. You have the finances and the proper team. We did not own it, but technically we did everything. Only the three of us,” says Sabry.

The three of them launched the business and within six months, they had 30 drivers, reaching up to 500 orders a day. Rocket Internet ended up shuttering Foodora’s operations and merged its clients with Talabt, after it acquired the Kuwait-based food delivery app for $150 million.

“The decision came literally overnight. I remember that day. I was coming back from a meeting and I had just closed a deal with one of the big restaurants in Dubai. I went into the office and I found chaos. We were told, "we are closing",” says Sabry.

“That is the bad thing about entrepreneurs, they are sometimes very optimistic,” says Sabry. “You could dream about a project and you put a lot of effort into it and then it doesn’t work out.”

Not wanting to go back to corporate life, Meneassy and Sabry decided to launch their own startup from scratch. Realising that the biggest issue with their first project was customer service, they launched Botler, a startup that uses artificial intelligence (AI) and chatbots to automate conversations in Arabic.

Botler was accepted onto the Startup bootcamp in Istanbul and received a grant from the Dubai government.

“All that was in less than a month, so we got overwhelmed and high on success and we started to lose focus,” says Sabry.

“Building the product was very difficult and we never did that because the product was already ready in Foodora and that was our first challenge,” says Meneassy. “The second thing was that it was very difficult to land a client…the economics did not make sense.”

It would take them up to six months to get a client who paid around $200 a month only and on top of that, their customers wanted Botler to build the chatbots for them which meant that they no longer became a software-as-a-service (SaaS) company, but “merely a service provider or a software house”, according to Meneassy.

The money then ran out. For a few months the pair paid company salaries out of their own pockets and did not pay themselves anything for several months.

“That is when it becomes very dangerous, when you believe so much in your idea that it ends up affecting you negatively. You never know if something is going to be successful. You just believe it will. We were very dependent on only one enterprise company that we spent months negotiating with but did not sign the contract eventually,” says Sabry. “Never depend on one customer.”

But instead of giving up on Botler, they pivoted, using the technology to develop a tool for social media monitoring. The tool tracked user posts on social media regarding companies and so enabled brands to develop campaigns and advertising tailored to customers.  

However, after the Cambridge Analytica scandal, Facebook updated its application programming interface (API) and the data Botler needed to function was no longer accessible, forcing the pair to shut down their venture. They kept their investors involved throughout the decision-making process.

“It is always good to keep [investors] aligned because you might need their help. It is not only about the money. Throughout the journey, they witnessed our struggle and were understanding,” says Sabry.  “It was very tough. It was a financial roller coaster and an emotional roller coaster. I remember getting a lot of calls from my family asking me to stop.”

Over the six months that followed, Meneassy and Sabry developed a matrix with a list of checks, plotting several ideas onto it, this time with no emotions and only focussed on ideas that had the real potential to work.

One idea, to provide free internet, scored very high on their matrix and so they launched Wasla Browser in May 2018, a mobile browser that subsidises data costs and provides free internet for users through advertising.  A third co-founder, investment banker Mahmoud El-Said joined them and they closed a seed round of $200,000 and the company was recently chosen as one of the top 100 Arab startups by the World Economic Forum.

Speaking of the experience, Meneassy refuses to view as a failure.

“I think it is not failure. It is experience. Experience is what you get when you do not get what you want. It did not matter to me if people think I failed, but what mattered most was how my family viewed me or if they were ashamed of me,” he says.

As for the main lessons the two learned Sabry believes it is important to “surround yourself with people who are better than you are and whenever you start something, do lots of research. You are not going to understand what you are doing if you are sitting [at] your desk”.

“Hire people who are better than you. The first three or four people in a team make the biggest difference. Also, it is very important how you quickly change directions and adapt in the market,” adds Meneassy.

April 10th 2019, 8:08 pm

Faith Capital and 500 Startups invest in CaptainPanel

Wamda

Source: MENAbytes

California-based Software-as-a-Service (SaaS) startup CaptainPanel has raised $1.2 million in seed funding from Kuwait’s Faith Capital and 500 Startups (Mena), Faith Capital and 500 Startups announced in a joint statement today.

Founded in 2017 by Abdullah Shalabi, a Kuwait national, CaptainPanel is an online solution that comes with a booking software for operators of fishing charters, boat rentals, diving centers, and water sports activity organisers. The startup also owns and runs FishFishMe, an international marketplace for fishing charters and watersport activities.

A big number of water activity businesses still rely on pen and paper to manage their bookings which requires a lot of time and effort on the operations side. CaptainPanel helps them take all of this online through its booking software and different other services which also include revamping the websites of these businesses and working with them on their digital marketing.

Abdullah Shalabi, the Co-Founder and CEO, of CaptainPanel, commenting on the occasion, said, “CaptainPanel is a growth partner for water sports companies. We provide business with in-person support, guidance and a tailored-made software which engages customers and manages the complex transactions typical of this industry. Both our approach and our software is supportive, simple and growth-focused. We understand the needs of this industry and have built our business to help yours – regardless of size.”

Abdulaziz Al Loughani, Managing Partner at Faith Capital, said, “FishFishMe and CaptainPanel are quickly becoming indispensable software platforms for anyone operating a watersports business in the Western United States and Mexico. As the tourism and hospitality sector continues to adopt technical solutions to age-old problems, small business owners reliant on the vibrancy of this sector will no longer fear the loss of value and opportunity caused by a lack of innovation in this space.”

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April 10th 2019, 5:44 am

UAE’s Bayut acquires real estate portal Lamudi

Wamda

Source: The National

UAE property listings and research company Bayut acquired Lamudi, a rival portal owned by Middle East Internet Group, for an undisclosed sum. Bayut also plans to launch its expanded operations in Saudi Arabia “very shortly”.

“With a network of sites operating in the region, we are very well placed to maximise consumers’ reach and clients’ exposure across a broader region,” said Haider Khan, founder and chief executive of Bayut.

Middle East Internet, formed by venture capital company Rocket Internet, has launched various e-commerce ventures in the region including online shopping website Wadi.com.

The company launched Lamudi.sa as the first real estate portal in Saudi Arabia in 2012, followed by Lamudi.jo in Jordan. The UAE version Lamudi.ae went live in 2015. Under the deal, Bayut will take ownership of all of Lamudi’s assets in the GCC.

The acquisition of Lamudi Middle East provides “the ideal platform for Bayut to expand its footprint in the GCC”, especially in the kingdom – the Arab world's biggest economy.

“Bayut has always focused on providing the most locally-tuned solution to the market and the intention behind this acquisition is to take that philosophy to the greater GCC region, with a focus on Saudi Arabia,” Mr Khan added.

The acquisition comes after Bayut’s parent company Emerging Markets Property Group (EMPG) closed a $100 million investment round in February – its largest fundraising round following a $50m round last year.

In addition to Bayut, EMPG owns and operates Zameen.com in Pakistan, Bproperty.com in Bangladesh and Mubawab.ma in Morocco.

The Bayut and Lumadi deal comes amid rising mergers and acquisitions activity among the UAE’s real estate portals. On Monday, Dubai-based Property Finder announced it will buy rival platform JRD Group for an undisclosed sum. Property Finder also increased its stake in Zingat – the second largest property portal in Turkey – to almost 40 per cent earlier this month.

April 10th 2019, 4:44 am

PointCheckout raises $600,00

Wamda

Jordan-based PointCheckout, an online payment method for reward points, has closed a seed round of $600,000 led by Arzan VC, 500 Startups, Dubai Angel Investors, Hala VC, and DTEC Ventures. The investment will be used to grow the sales and operation teams and improve its technology.

PointCheckOut allow users to pay with their reward points and miles online at over 1,000 online merchants across the Middle East and North Africa (Mena) region.

“Consumer priorities and expectations are continuously changing, and we can’t continue to use the same solutions of the past 10 years to address this different outlook. Customers are online, on the move, and are extremely selective in how they associate with a reward programme,” said Bashar Saleh, co-founder of PointCheckOut.

This year, the company is hoping to expand its presence to the GCC.

More than $100 billion worth of reward points go unredeemed worldwide according to the 2017 Loyalty Report.

“Both the consumer loyalty and fintech industries are growing rapidly and we feel the PointCheckout team is well equipped to bring new innovation to the market successfully,” said Laith Zraikat, partner at Arzan VC.

April 9th 2019, 9:05 pm

Top five VC deals in first quarter of 2019

Wamda

While Uber’s acquisition of Careem dominated the news in the first quarter of this year, the Middle East and North Africa’s (Mena) startup sector witnessed several big venture capital (VC) deals too. UAE-based startups accounted for four out of the top five disclosed investment deals with about  $183 million in investments, accounting for almost 96 per cent of the total funding. We have compiled a list of the biggest five venture capital disclosed investments in the first quarter of 2019 in Mena:

1 - EMPG

UAE-based Emerging Markets Property Group (EMPG), the parent company of Bayut.com, raised $100 million in a Series D round in February.

The round was led by a US-based family investment fund KCK Group and eight other investors including Exor Seeds which counts Ferrari and The Economist in its portfolio of companies.

The group said the investment will be used for acquisition and investment opportunities, technology development, and strengthening its online portals.

This round takes total investments raised by EMPG to $160 million, making it the highest funded real estate tech company in the region and the biggest investment in the first quarter of 2019.

2 - Yellow Door Energy

Yellow Door Energy, a UAE-based solar developer, raised $65 million in Series A financing, from a group of investors including International Finance Corporation (IFC), Mitsui & Co, Equinor Energy Ventures, Arab Petroleum Investments Corporation (APICORP), and UAE-based Adenium Energy Capital, the founding investor of Yellow Door Energy in 2015.

The investment is one of the Middle East's largest private placements in distributed solar energy and the second biggest VC investment in Q1 in 2019.

The company said that it will use the funding to scale its investments in solar energy and energy efficiency solutions in the Middle East and Africa.

3 - Jamalon

Jamalon, UAE-based online book retailer and publisher, closed the first leg of its Series B funding round last March, raising more than $10 million from existing and new shareholders, making the investment the third biggest VC deal in the region.

The round was led by Wamda Capital, followed by Aramex with new investments from Anova Investments, 500 Falcons and Endeavor Catalyst. It is the largest amount received by a Middle East e-commerce retailer to date.

Jamalon said that the fund will be used to increase the reach of Arabic books worldwide and expand its print-on-demand service.

4 - JustClean

JustClean, a Kuwaiti laundry startup raised $8 million in February from Kuwait-based Faith Capital which acquired JustClean in 2017.

Faith Capital said in a statement that the investment will be used for ongoing expansion of marketplace operations across GCC in addition to expanding into B2B logistics and software-as-a-service (Saas) initiative.

5 - yallacompare

UAE-based financial comparison website yallacompare raised $8 million in its latest round of funding in January led by existing investors STC Ventures and Wamda Capital, and new investor Argo Ventures, the investment arm of international insurance company Argo Group.

The startup said the investment will be used to expand to Egypt by the end of the first quarter of this year while also increasing market share in the UAE and Kuwait. 

April 9th 2019, 9:05 pm

Esports organization YaLLa Esports secures seed funding

Wamda

Source: Startup MGZN

YaLLa Esports, an esports organization in the MENA region, has completed and secured a seed funding round from a group of strategic investors, led by super angel investor Kushal Shah.

Finnish-born, Dubai-based esports trailblazer, Klaus Kajetski founded YaLLa Esports in 2016, having been heavily involved in building the regional esports ecosystem. With 20 years of esports and gaming experience, Klaus has grown YaLLa Esports to a globally recognized team with players and staff from multiple nationalities including the United Arab Emirates, Saudi Arabia, Egypt and Tunisia, having success in international and regional esports tournaments.

YaLLa Esports will use the funding to search and develop the best talent in the region; to build great team facilities and to help with travel costs to compete on a global scale, as well as for expansion across the MENA region. The startup aims to nurture regional talent through an organized personal growth structure, championing the gaming culture and building an environment for aspiring professional gamers to flourish and make esports a viable career.

Furthermore, YaLLa Esports aims to add key people on the management side to support the rapid growth. The focus will be on content creation, sharing the stories of home grown esports talent on a journey, catering to the dedicated fan base.

YaLLa Esports’ business model is driven by sponsorship and advertisement in light of the fast-growing and significant viewership of millennials tuning into highly entertaining esports content. YaLLa Esports has already partnered with leading brands including ASUS Republic of Gamers, Logitech G and Western Digital.

Commenting on the seed raising, Klaus Kajetski said, “We have always strived to be professional and set an example for other esports organizations in the region, and this investment is the natural next step towards fulfilling that ambition. We are now better-positioned to enable amazing esports opportunities for dedicated people, as well as supporting even more aspiring esports athletes to fulfill their dream of a professional career.”

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April 9th 2019, 6:55 am

In conversation with Soumaia Benturquia of Fodel

Wamda

Forward Delivery (Fodel) provides a click and collect service for e-commerce players in the UAE and now Saudi Arabia. Founded by Soumaia Benturquia in 2017, the company recently raised a $2.6 million pre-Series A round in March 2019.

Benturquia came up with the idea for Fodel while working in the e-commerce team for Hewlett Packard in France. Fodel’s technology enables customers the option to collect their parcels from more than 1000 locations in the UAE with the aim to eliminate the uncertainty of delivery times by providing an alternative option to home delivery. The company has signed with two of the region’s biggest delivery firms as a cash on delivery (COD) solutions partner.

We spoke to Benturquia about her entrepreneurial journey.

Why did you become an entrepreneur?

I grew up in an entrepreneurial and business environment. From a young age I wanted to be an entrepreneur but people push you to have experience, but I figured out that it was not the main element to be an entrepreneur. You have to do it, you have to have some experience, but you will never be ready to be a CEO.

How did the idea for Fodel come about?

During the peak seasons like Christmas, you have some issues related to the number of shipments. It is easy for e-commerce to have this growth, the traffic is higher, but for logistics it is a problem, it is one of the biggest challenges.

I conducted some research and I saw that one of the main problems is the last mile. One driver can deliver all day long and only deliver 50 shipments door to door. I saw in the Middle East it’s one of the few markets where you don’t have pick up locations, but on the other side you have growth of 25 per cent for e-commerce. So I said there is an opportunity, I spent a year conducting research, talked to experts to understand if this model would work here.

When did you realise it was the right time to quit your job?

After a year at HP I thought it was enough, I already had some experience and I felt it was the right time. Seeing that there is such a need in this market and wanting to change things and when I understood that I could have an impact, I realised I had to do it.

What was your biggest challenge?

One of the biggest challenges was to implement something new, to establish the trust of the merchants and also to have the trust of the main e-commerce and logistics players because they’re handing over the last bit of the customer experience which is the most important. If everything is smooth and easy on the e-commerce platform and then if you have a bad delivery service, it impacts the overall service.

What have you learned in starting your business?

You don’t have a comfort zone, one of the main challenges is you have to leave your comfort zone from a professional and personal point and you have to adapt yourself to different challenges. You have to keep going, you will have ups and downs but you have to keep going and believe in your idea to make sure it is something that will work. You will make personal sacrifices, the work-life balance is not there, but that is the cost of being an entrepreneur. You will make mistakes but you have to look at these mistakes as an opportunity to learn.

What will your industry look like in the next decade?

Logistics is a late adopter of technology, there is still a lot of improvement to be made. I believe we will have a full digitisation of the custody chain, AI [artificial intelligence] will impact the processes, we will find solutions to be faster, cheaper and maybe other ideas about how to deliver. Our concept is based on tech and sharing economy, we are the Airbnb of logistics. We want to give an alternative to home delivery, bring convenience in all ways, not just timing, but providing cash on delivery (COD) to people who are used to it.

April 8th 2019, 9:05 pm

MYKI Startup program

Wamda

Entrepreneurship is all about taking risks, but when it comes to keeping your startup safe and protecting your internal data, some risks should not be taken. To help secure your data, we’ve partnered up with Myki, Password Manager & Authenticator.

Myki eliminates the risks associated with cloud storage by safeguarding your passwords and sensitive data offline. Myki for Teams allows startups to safeguard and manage access to passwords and sensitive info among teams.

You can use Promo Code: MYKIXWAMDA to get a 20% discount off the annual Myki for Teams package for $2.4 per user/month. You can also book a demo call here to check it out and learn more about how Myki can work for your startup, or go straight to this registration link here

 

April 8th 2019, 9:23 am

Property Finder set to Acquire JRD Group

Wamda

Source: Benzinga

Middle East real estate classifieds website Property Finder has signed an agreement to acquire its competitor JRD Group, a UAE-based real estate technology provider, owner of property portal Justproperty.com and Propspace, a prominent broker CRM solution used by real estate professionals.

Michael Lahyani, Founder and Chief Executive Officer of Property Finder, said: "Property Finder and JRD Group share the same consumer-centric philosophy and vision of further professionalising the real estate market. The integration of our products and additional investment in JustProperty.com will provide consumers with better insights to support them in taking property buying or renting decisions."

The acquisition will also provide real estate professionals with new exciting opportunities and enable them to reach a larger audience and a broader offering of CRM, property management solutions and listing portals.

This acquisition happens only a few months after the investment by General Atlantic in Property Finder in November 2018 and is in line with the Group's strategy to expand the brand in the UAE and invest in building the best products and data information available.

Alex Nicholas and Siddharth Singh, JRD Group Founders, will stay on board and become shareholders of Property Finder.

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April 8th 2019, 7:39 am

AWOK.com closes US$30 million series A funding

Wamda

Source: Zawya

The UAE mass market e-commerce platform AWOK.com- has closed its first external round of financing to pursue its ambitious regional growth plans with the vision of providing consumers with timely and seamless access to value products across the Middle East and North Africa.

The $30 million financing round is jointly led by StonePine ACE Partners out of its StonePine ACE Fund – a joint venture between StonePine Capital Partners and ACE & Company SA – and Al Faisaliah Ventures, the newly created Corporate Ventures Capital arm of Al Faisaliah Group. Both are top tier regional investment companies. The deal is being co-invested in by globally renowned investment group Endeavor Catalyst.

The new capital raised will be mainly used for further geographical expansion into Saudi Arabia, to enhance the AWOK platform empowered by technology development, and to increase AWOK’s offering across multiple product categories to cater to the growing demands in the region. It will help reinforce Awok’s team, including attracting global talent and raising the level of customer experience and after sales support. In the near future, AWOK will also scale its operations across key growth markets in the GCC countries and North Africa, to bring the same outstanding level of timely service to these locations on the deal.       

Commenting on the deal, Ulugbek Yuldashev, Founder and CEO of AWOK.com said: “These are truly exciting times for Awok and its entire ecosystem. We founded AWOK.com in 2013 and have been pioneers in servicing a previously untapped segment of the market with a unique product selection. Our success was built on providing our customers with the best experience we could, and with this round of financing we will be able to provide an even better experience to an even larger market.”

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April 8th 2019, 7:27 am

ProTenders raises $3 million in pre-series A

Wamda

Dubai-based ProTenders, a construction intelligence and procurement company, has secured $3 million in its pre-Series A funding, led by a group of UAE-based investors.

The investment will be used to focus on the growth of ProTenders’ operations across customer success, sales, marketing and research both regionally and in Asian markets, as well as expanding its product offering to include blockchain and smart contracts.

“ProTenders empowers companies to reduce risk and improve efficiency in finding new leads and partners, securely and efficiently. With the strong support from our investors, we are confident that ProTenders will contribute efficiently to digitally transforming the construction industry,” said Karim Helal, co-founder and chief executive officer of ProTenders.

The company has more than 40,000 member companies and 57,000 listed projects, and has processed over $35 Billion worth of bids.

“At this day and age, the trend of investments have shifted from material ones to virtual technological ones where investment in alternative solutions are needed. Construction is an industry that has long required digital transformation, and ProTenders is well-positioned to bring digitalisation to the industry,” said Hamda Saeed Al Otaiba, one of the investors.

April 8th 2019, 4:34 am

Oliv raises $2 million in Series A

Wamda

Oliv, the UAE-based careers platform connecting employers with young talent, has closed $2 million Series A funding round led by the Aloshban and Alnamlah Family Groups in Saudi Arabia, and Mohammed Khoory in the UAE.

Oliv will use the funding to invest in its technology and work on its web application, which is set to be launched this month.

Founded in 2014 by Jean-Michel Gauthier, Oliv aims to address youth unemployment in the region by using technology to connect youth talent with employers.

“Due to various factors including high growth in population, the unemployment rate among young people in the Middle East and North Africa (Mena) currently stands at 31 per cent, the highest level in recorded history and twice the global average. It is this reality that inspired us to set up Oliv,” said Gauthier.

Oliv claims to host more than 200,000 students and graduates and works with over 1500 businesses.

“Youth unemployment in the Mena region is a serious issue with the potential to stall our economy and limit our progress so we are excited to be getting behind Oliv and the fantastic work they are doing to address it,” said Ghassan Aloshban, spokesman for the Aloshban Family Group. “Our investment reflects our belief in the power of technology as a social enabler, our commitment to this region and its progress, and our confidence in Oliv's strategy and long term prospects.”

April 7th 2019, 10:07 am

ArabyAds secures $6.5 million from Equitrust

Wamda

ArabyAds, a performance marketing company, has raised $6.5 million in its Series A round from investment arm of Choueiri group Equitrust, which acquired an undisclosed stake.

ArabyAds aims to help its business partners predict and measure the return on their advertising spend and allows them to grow their sales while trying to keeping marketing spend under control.

“We are excited to partner with ArabyAds, a company that was able –with no external funding so far- to quickly emerge as a market leader in [the Middle East and North Africa’s] fast-growing performance marketing industry,” said Patrick Thiriet, chief strategy officer of the Choueiri Group. “There are many synergies to explore and implement, both with Equitrust’s other portfolio companies and with Choueiri Group’s unique advertising footprint in the region.”

ArabyAds has been operating in the GCC market since 2013, with offices in both Egypt and Dubai and claims to  have delivered its solutions to more than 450 clients including Landmark, Emaar, Etihad Airways, Souq.com, Jumia.

“We are looking forward to strengthen our brand, and to gain access to more regional clients that are looking to boost their sales through advertising,” said Mahmoud Fathy, chief executive officer at ArabAds. “Arabyads had reached a stage where a capital injection was needed to expand further and continue delivering new solutions to regional advertisers. What we needed was the right partner, and Choueiri Group emerged quite naturally as a name of choice.”

April 7th 2019, 10:07 am

Uber partners up with Egypt’s peer-to-peer car sharing platform Dryve

Wamda

Source: Startup MGZN

Egypt’s peer-to-peer car sharing platform Dryve, announces it partnership with Uber Egypt, allowing access to their vehicles for people who wish to be Uber drivers. This comes as part of Uber’s ongoing efforts to support drivers and enable Egyptians to better access the economic benefits of flexible work.

Head of Uber Egypt, Ahmad Hammouda, comments on the partnership saying that it represents their mutual commitment to innovate to ensure drivers and vehicle owners are supported and empowered by technology, and can supplement their incomes seamlessly with part-time work. “Our statistics show that the Egyptian market needs more flexible work opportunities with the fewest possible barriers to entry, as part-timers currently contribute to 70 percent of active drivers base. Connecting drivers to vehicles for short term rentals is a further step towards our goal to make the economic empowerment provided by the ride-sharing industry more accessible,” he adds.

With the aim to revolutionize the rental car market in Egypt, Dryve allows car owners to rent out their unused vehicles. This contributes to Uber’s goal of complementing the existing transportation network in Egypt as they aim to further congestion in cities, especially with the overabundance of unused parked cars clogging the streets.

Gamal Aboul Enein, CEO and Co-Founder of Dryve, elaborates on the partnership saying: “This mutually beneficial partnership enables Dryve to tap into Uber’s massive pool of demand, while in turn providing an innovative solution to address the challenge of drivers’ accessing vehicles by unlocking a vast and uncharted market.”

In addition, Dryve has also partnered up with insurance company, AXA and have introduced the first of its kind insurance policy – PAYD (Pay as You Drive). PAYD is the first fully digitalized claims process, which gurantees the insurance of all the listed vehicles during Dryve rental

April 7th 2019, 8:37 am

Seedstars announces $100m fund to invest in African tech startups

Wamda

Source:  Ventureburn

Emerging markets startup competition Seedstars yesterday announced it would launch a $100-million fund to invest in African startups in collaboration with Paris based First Growth Ventures.

The announcement was made yesterday by Seedstars World chief investment officer Charlie Graham-Brown at the Seedstars Summit which is being held today at the SwissTech Convention Centre in Lausanne, Switzerland.

“The strategy that we’re developing now and have started working on, is to have a fund per region of around $100-million to be able to do deals in Series-A and Series-B,” Seedstars World chief financial officer Charlie Graham-Brown announced yesterday.

The fund in Africa will be Seedstars first such regional fund. Graham-Brown told Ventureburn on the sidelines of the summit today that the aim is for the fund to invest in 30 to 40 companies and to begin investing by the end of this year.

He said Seedstars would shortly reveal more details on the fund such as the countries the fund would focus on.

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April 7th 2019, 8:23 am

Darwazah Startup Accelerate 2019

Wamda

With a focus on achieving and sustaining globally recognized thought leadership in the areas of Innovation Management and Entrepreneurship in MENA, and for the 6th year in row, the Darwazah Center for Innovation Management and Entrepreneurship at the Olayan School of Business, AUB is organizing the Darwazah Startup Accelerate 2019 (DSA) Demo Day.

The Competition was launched beginning December 2019, during which students went through ideation sessions, two boot camps, three shortlisting phases, were mentored by top-notch experts, and only eight teams made it to the final stage with determination and hard work. These teams will first present their final pitches in front of a high caliber jury on April 8, and will pitch first time in front of a public on April 17, the Demo Day.

More than 80 teams applied to the competition with innovative ideas, and two will be announced as winners on the Demo Day, happening on April 17, 2019 at the Maamari Auditorium, and two startups will be awarded $10,000 each to continue developing and launching their venture.   

More information here.

 

April 7th 2019, 6:47 am

What we learned at WEF Mena 2019

Wamda

The World Economic Forum (WEF) on the Middle East and North Africa (Mena) concludes today, drawing more than 1000 government, business and civil society leaders from 50 countries. Its aim, according to the statement beneath its logo is “committed to improving the state of the world”.

Whether one conference can achieve that is debateable, but the speeches and discussions that took place highlighted the region’s many problems. From conflict to unemployment, climate change and societal impact of technology, experts and participants engaged in what were sometimes lively conversations in a bid to find solutions.

Ahead of the summit, WEF announced the region’s top 100 startups shaping the Fourth Industrial Revolution (4IR). A term coined by WEF founder and executive chairman Khlaus Schwab, the 4IR represents a fundamental change in the way we live and work, driven by emerging technologies like artificial intelligence (AI) and robotics. It was a central theme at WEF with questions over the impact of AI on society, managing policy over the proliferation of data and the deployment of autonomous vehicles in the region.  

Startups

Companies like Tunisia-based Epilert which uses AI to warn of a possible seizure and Egypt-based Shamsina which aims to eradicate energy poverty by producing affordable solar technologies were among the 100 Arab startups present at the forum.

Throughout the event, entrepreneurship and innovation were highlighted as one of the five platforms for cooperation alongside new economic and social models, environmental stewardship, peace and reconciliation and 4IR.

“The future cannot be built by government alone, or by business alone, or by civil society alone,” said Schwab in his opening remarks. Instead, he called for “inclusive and collaborative ways in which to tackle common challenges.”

Careem, the UAE-based ride-hailing app which was recently acquired by Uber for $3.1 billion was frequently cited as an example of the level of talent and potential in the region’s startup ecosystem.

“We know there is Arab talent, we see it succeeding in the US, Europe, in the largest companies. We want to see Arab talent succeeding in our ecosystem, not outside our ecosystem,” said Khalid Al Rumaihi, chief executive at the Bahrain Economic Development Board (EDB).

The regulatory hurdles, lack of funding and siloed working environments between the countries of the region were acknowledged as barriers for entrepreneurship.

“Entrepreneurs succeed despite the system, not because of the system,” said Al Rumaihi. “We need governments and startups to work together to teach us what to do.”

For Al Rumaihi, Bahrain had taken the right steps by launching a $100 million fund of funds, introduced a bankruptcy law that allows startups to fail and restart and launched data protection laws that allows data to move freely across the middle East.

One area that few agreed on was the talent pool in the region. Those from Jordan, Tunisia and Dubai claimed there to be talent, others lamented the lack of skills.

“There are two sides of talent,” said Ahmed Alfi, founder of Sawari Ventures, Flat6labs and the Greek Campus in Cairo. “There is talent that’s graduating, that’s good and is mostly self-taught, which means the universities are doing a lousy job. They teach themselves online. The people with passion exel. I don’t want to graduate people who become digital servants of the West. The opportunity is there, we need to give them support.”

For Dubai, support came in the form of granting WEF’s top 100 startups five-year visas.  The UAE is already home to 20 of them and in a statement to WAM, Abdullah Bin Touq, secretary general of the UAE cabinet said the move “reflects our commitment to facilitate businesses, create an attractive and encouraging environment for growth, and underline the UAE's position as a global destination for talents”.

“Destination” and “hub” were terms frequently cited during the sessions related to startups and innovation. There is now greater competition between the countries of the region to establish themselves as centres for entrepreneurship and Jordan was keen to highlight its strengths in this regard.

Jordan as a hub

A somewhat bizarre school play walked the audience through Jordan’s history and present-day offerings making claims as grand as being the gateway to the world. Jordan’s officials made attempts at engaging the rest of the region and the world, positioning itself as a centre for peace with a youthful population that is well educated and skilled. Many of the 100 Arab startups have their backend offices based in either Jordan or Egypt, two countries that graduate high quality engineers.

“Our most important strength is Jordan’s high-skill human capital,” said King Abdullah II bin Al Hussein, in the opening plenary session. “Our young people are globally connected, tech-savvy, fluent in multiple languages and determined to succeed. They are proven assets to every enteprrise. And we have already seen this strength at work, in the success of Jordan’s ICT industry, which has created thousands of new jobs and accessed markets across the region and beyond.”

While the country has long enjoyed a reputation for supplying engineers to the rest of the region, it faces stiff competition from the UAE which recently announced Hub 71 in Abu Dhabi. Dubai as the business hub of the region draws the majority of startups, while Bahrain has been working hard to promote its fintech finesse and now Saudi Arabia, in its bid to achieve its Vision 2030 economic plan has simplified the startup and licensing process to attract startups to its main cities benefit from its vast, wealthy market.

This competition, while beneficial to entrepreneurship and startups, risks further fragmenting the markets of the region.

Women

With the world’s poorest women participation rate in the workplace, the topic of women is highlighted in almost every conference and summit that takes place in the Middle East. In a session titled the Rise of Arab Women, the panel, made up of female leaders from the region highlighted the need for government measures and a shift in cultural mindsets to unlock the potential of the region’s women.

In a survey published by consultancy PwC, 66 per cent of employees believe that governments should intervene in the private sector companies and set targets for gender diversity. The Women in Work Index, surveyed more than 3000 women and men across Egypt, Saudi Arabia and the UAE to provide policy recommendations.

“In this report the pay gap was not seen as something that is as significant as access to promotion and leadership positions,” said Norma Taki, partner and Middle East diversity and inclusion leader at PwC. “Mena loses $575 billion per year due to social and legal barriers facing women. If we increase the number of women participating in the workforce it could add $2.7 trillion to the economy by 2025.”

Saudi Arabia has set an ambitious target of 30 per cent female participation in the labour force by 2030, up from 22 per cent currently, meanwhile Egypt’s female participation has remained flat over the past twenty years due mainly to societal attitudes. It is the UAE that leads in gender diversity in the region, with women accounting for close to 41 per cent of the overall workforce and 66 per cent of public sector workers and 30 per cent of leadership roles according to PwC.

Ultimately, it is a cultural and societal shift that is needed to enable women to succeed in the region.

“When I graduated as a lawyer in 1995, women were not allowed to study or practice law in Saudi Arabia” said Sofana Rabea Dahlan, founder and managing partner of the Sofana Rabea Dahlan Law Firm. Despite a government employee telling her she would not get a certificate in a 100 years, she became one of the first women to become accredited and now 25 years later, there are 250 female lawyers in Saudi Arabia with renewal of certificates available online.

“We have to be patient with our people,” she said.

But the region’s youth have already demonstrated their restlessness for change once before and now again in Algeria, patience therefore, may not always be the answer.

 

 

April 7th 2019, 2:32 am

How investors can support entrepreneurship in the Middle East and North Africa

Wamda

The potential for entrepreneurship in the region is high, based on digital consumption and a startling increase in investment funding for startups. Ahead of the World Economic Forum on the Middle East and North Africa taking place in Jordan 6-7 April, McKinsey & Company Middle East’s senior partner Omar El Hamamsy, associate Ahmad Alkasmi associate partner Luay Khoury and partner Abdur-Rahim Syed explain how investors can help entrepreneurs.

The Middle East and North Africa (Mena) region is one of the most digitally connected in the world: across countries, an average of 88 per cent of the population is online daily, and 94 per cent of the population owns a smartphone. Digital consumption is similarly high in some countries for example, Saudi Arabia ranks seventh globally in social media engagement, with an average of seven accounts per individual.

Despite this sizable appetite for online content and services, key digital sectors remain nascent, and entrepreneurship potential is yet to be fully tapped. Across Mena, only 8 per cent of small and medium enterprises (SME) have an online presence—ten times less than in the United States. Only 1.5 per cent of Mena’s retail sales are online, which is five times less than in the United States.

Research by Digital McKinsey suggests that the Middle East has only realised 8 per cent of its overall digital potential, compared with 15 per cent in Western Europe and 18 per cent in the United States.

However, we believe the region is at the start of a new S-curve: Mena is experiencing a startling growth in both the number of successful startups and the amount of investment funding available to them. Startups are scaling by adapting offerings and business models, from digital music to digital logistics to serve local needs. Examples of this abound, from the UAE’s Fetchr using GPS technology to power delivery in a region with few addresses to Egypt’s Fawry using a local network of retailers to anchor its payment network and overcome barriers in the financial technology (fintech) space.

Moreover, the number of investors in the region increased by 30 per cent from 2015 to 2017, while total funding increased by more than 100 per cent in the same period. Corporate-venture-capital (CVC) funds, in particular, are rapidly emerging in the evolving Mena investment ecosystem. In 2015 and 2016, 14 new, significant CVC funds entered the Mena market. The number of CVC assets under management grew by more than 2.4 times from 2012 to 2016, reaching 20 per cent of total VC assets under management in the region.

Through items from targeted, VC-like investment funds to structured incubator and accelerator programmes, public institutions are also playing an increasingly key role in the startup ecosystem. Recent examples include the establishment of Fintech Factory in Egypt, FinTech Hive in the UAE, and National Fund for Small and Medium Enterprise Development in Kuwait.

Overall, the ecosystem supporting the growth of Mena’s startup landscape has been falling into place. However, distinct gaps remain for investors in properly identifying potential in new business models and in scaling chosen startups. We recommend investors in the startup space adopt the following six best practices to unlock the potential of entrepreneurship in the MENA region:

Local Mena entrepreneurs have demonstrated they can be innovative and bold to meet changing demand. The appropriate adoption of best practices in venture investing can create significant value for investors, promising new businesses, and the entrepreneurship ecosystem in the region.

 

April 3rd 2019, 10:04 pm

Property Finder becomes largest shareholder in Turkish real estate portal

Wamda

Source: The National

Property Finder increased its stake in Turkish property marketing website Zingat to almost 40 per cent from 17 per cent, as it looks to expand its operations in the Middle East, North Africa and Turkey (Menat).

“The partnership with Zingat has proved hugely successful, and has reinforced our confidence in the Turkish market and its economy,” said Michael Lahyani, chief executive and founder of real estate portal Property Founder.

The stake increase “aligns with our vision of expanding market share in Menat”, Mr Lahyani added, and makes Property Finder the largest shareholder in Zingat, Turkey’s fastest growing property platform. The value of the deal was not disclosed.

The deal is Property Finder’s first since the close of its $120 million investment round in November, led by US private equity company General Atlantic.

As part of the Zingat transaction, General Atlantic’s vice president Tom Hussey will join Zingat’s board as a director.

Zingat was founded in 2015 by Ahmet Kayhan and Mehmet Erkek – the entrepreneurs who also set up Dubai real estate data provider Reidin – alongside Turkish conglomerate Doguş Group.

Continue reading this story 

April 2nd 2019, 8:53 am

In conversation with Muhammad Chbib of Tajawal

Wamda

Having been raised and educated in Germany, Muhammad Chbib describes himself as someone with “German thinking paired with Arab passion”, a duality that he believes has served him well as an entrepreneur.

He has set up several businesses but is perhaps best known for founding and formerly running online travel site Tajawal as its chief executive officer (CEO). Tajawal is a corporate startup, part of Saudi Arabia’s Al Tayyar Travel Group and according to Chbib, Tajawal and its sister brand Almosafer managed to generate sales of $1 billion within three years.

Prior to this, Chbib worked on two of his own startups and has also worked as a consultant for McKinsey and Company. He joined Sukar as its CEO and scaled it from a $200,000 to $2 million before it was sold to Souq.com

Today, Chbib is undertaking a new venture, one focused on the Muslim travel market.

Why did you become an entrepreneur?

The first business I set up was at the age of 12, I told my dad I didn’t want any more pocket money. He used to give me 10 Deutsche Marks (DM). I had a little bit of savings and I purchased a bike forDM40, I sold it for DM70 so I bought two bikes, one I rode and the other I sold.

I became a bike dealer, I would fix them and sell them and at one point I figured if I go to this factory close to my house, I could buy the parts and assemble the bike myself. Once I assembled one for DM300, I put it in the newspaper and this guy came with his son and he said “We’re interested in buying this bike”. I was 14 and my response to him was “get out of our house, this is not a bike, it’s a racing machine, if you’re not going to appreciate that you cannot have it”. I sold the bike to him for DM1200. This was the starting point of my entrepreneurial journey.

I have intrinsic sales skills that are the basics of any type of entrepreneurship. When you don’t have sales skills, you’re not a great entrepreneur. You need to sell your company idea, your concept to investors and to employees.

You founded a company with your wife, what was that experience like?

We launched a modest fashion business called Citra Style. My wife is paediatrician and it’s a tremendous value add when you have someone with you who is female and understands the product you’re about to launch.

How do you tell investors your co-founder is your wife? In Germany I saw no issues, as a person you can wear many hats. But in the Middle East we’re judgemental and generalise.

But it’s a challenge to start a company with someone you live with. In business, you have tough discussions, how do you turn off those discussions in private?

I’m extremely good at switching off my brain when I get home. Switching off makes me a better performer. I know I will not save the world or my business in those 2-3 hours.

Why did it not work out?

The funny part is it was working, we did a funding round but the problem was the investor structure, it was not good enough so I decided to give up the company. It wasn’t easy. The much bigger emotional attachment is to the people who work for you. I had 25 employees when we shut down. We placed everyone in a new job and some of them came back to work with me. That’s what hurts the most when you stop working with talent. This region is not blessed with tech talent, when you find people and you have to let go of them, it’s a big disaster.

What is the biggest sacrifice you’ve made?

Being an entrepreneur in this region is much tougher than anywhere else, the infrastructure, funding and talent are not as advanced.

When did you realise it was time to leave Tajawal?

Once a quarter, I question the incremental value I add to a business, if I hire a full time CEO, will he or she be able to do the exact same performance as me or better? The moment I can answer yes, then it’s time for me to leave. After three and a half years of running Tajawal, the profile that was required was much more corporate. Exposing yourself to other people in other environments helps you grow further. You don’t want to reach a plateau, you need to continue learning.

What are you working on now?

I look at the global 200 most impactful brands and not a single one caters to Muslims who have specific needs that are very common from China to Canada. There’s a huge opportunity there if you do it right, the point is not to just target Muslims, but to service everyone else. So, we’re working on a travel business, a customised marketplace. We’re creating a front end that enables users to set up trips with the assistance of artificial intelligence (AI) and on the backend side, we’re onboarding existing offline travel agencies to regain business from the online space.

You could book a bespoke Hajj or Umrah trip or you could book a 12-day trip to Sri Lanka with a component to help you find the halal food options and dry hotels, or packages that explore the Muslim heritage of Andalucia – both Muslims and non-Muslims will be interested in that.

What will your industry look like in the next decade?

There will be moves towards consolidation. There will be three global players and they will own everything of relevance. There will be a big Chinese player, the second player will be a booking holding and the third player has yet to emerge. If you look at the online travel space, it hasn’t been fully disrupted. Offline players will vanish in a few years.

 

 

April 2nd 2019, 3:08 am

Egypt’s Brimore raises $800,000 in seed fund

Wamda

Source: Menabytes

Cairo-based direct-selling distribution platform Brimore has raised $800,000 in a seed funding round, the startup announced today in a statement to MENAbytes, adding that the investment was co-led by two of the country’s leading VCs Algebra Ventures and Endure Capital, with participation from 500 Startups, Flat6Labs, and some angel investors.

Founded in 2017 by Mohamed Abdulaziz, Ahmed Sheikha, and Mahmoud Refaay who come with extensive experience in FMCGs, direct selling, and distribution management, Brimore helps small local manufacturers sell their products directly to consumers through its network of freelance sales agents. It uses an Avon-like model to incentivize these sales agents who could consume the products themselves, sell it to their friends, relatives and neighbors, or even put them up for sale in the small stores in their neighborhoods.

In their own words, “Brimore is a technology-powered retail distribution platform that allows manufacturers direct access to local communities who can both promote and consume their products. The platform creates significant efficiencies for local manufacturers by dramatically optimizing their branding and distribution costs, providing them with better demand visibility, and allowing them to improve utilization.”

It is an ingenious idea which on one side is empowering manufacturers to reach consumers they previously had no access to for different reasons and on the other side enabling these freelance distributors or sales agents, majority of which are women, make some extra money by selling to people they already know.

Abdulaziz co-founder and CEO of Brimore, notes, “Many local manufacturers and products have suffered and died because of inefficient and expensive distribution networks that are better suited to big multinationals. We’re leveraging the power of people and their social networks to solve the problem of market access for SMEs in Egypt and disrupt the traditional distribution model.”

Continue reading this story

April 2nd 2019, 3:08 am

Fodel raises $2.6 million in pre-Series A

Wamda

Dubai-based last mile delivery startup Forward Delivery (Fodel), has raised $2.6 million in a pre-series A round from multiple investors including Saudi-based Al Rajhi family members.

Fodel’s technology gives customers the option to collect their parcels from 1000 pick-up locations across the UAE at a time most convenient to them. Essentially a click and collect options, it aims to eliminate the uncertainty of delivery times for customers by providing them an alternative solution to home delivery.

The company counts Choithrams and Al Maya supermarkets among its pick-up locations.

“Fodel puts an end to the uncertainty associated with last mile delivery in the GCC by making the process simple and convenient. Consumers can now select a store nearby like a grocery, pharmacy, laundry, or a gas station. Their products get delivered there and they can then pick it up whenever it is most convenient, at any time they want,” said Soumaia Benturquia, founder and chief executive officer at Fodel.

The investment will be used to expand its operations in Saudi Arabia where it has already secured 800 pick-up locations. Fodel is also partnering with a couple of international logistics firms to offer a cash on delivery option for them.

“As e-commerce increases, cash on delivery will increase. Us as consumers now have a lot of choices, I may not want to pay for something online, I want to see it and then pay for it. This service will be a game change for e-commerce,” said Hamdi Osman, chairman at Fodel.

March 31st 2019, 4:17 am

Saudi undergoes entrepreneurship drive but challenges remain

Wamda

Saudi Arabia’s government is no stranger to technology or entrepreneurship. In fact, the country’s sovereign wealth fund, the Public Investment Fund (PIF), is one of the most prolific investors in startups outside of the Middle East and North Africa (Mena) region.

PIF is a direct investor in Uber after clearing a $3.5 billion cash transaction in 2016 for a five per cent stake in the company. It also a hefty investor in Japan’s Softbank Vision Fund, the world’s largest venture capital (VC) fund by signing a $45 billion cheque for access to its list of portfolio companies like Slack, OYO and GM Cruise.  PIF is hoping to become a $2 trillion fund by 2030.

Closer to home, the government’s focus has been less on investments and more on creating and developing a startup ecosystem.

The Kingdom of Saudi Arabia (KSA) is the Middle East’s biggest economy with a gross domestic product (GDP) of more than $680 billion and a population of 33 million of which 70 per cent are below the age of 30.

The petroleum sector accounts for 87 per cent of budget revenues, 42 per cent of GDP and 90 per cent of export earnings according to Index Mundi.

This reliance on oil has been deemed unsustainable and so over the past couple of years, the government has been trying to wean Saudis off public sector jobs and has instead been encouraging them to start their own businesses. It has done so by simplifying the visa and licensing process, launching several government initiatives and establishing entities like Monshaat, the small and medium sized enterprise authority, and Fintech Saudi while enforcing a Saudisation policy across the private sector.

During Step’s inaugural conference in Riyadh, Mazin Al Zaidi, director of innovation and entrepreneurship at the Saudi Arabian General Investment Authority (Sagia) said that there are some 12 regional and global VC firms in the pipeline registering to have a presence in Saudi Arabia, six months ago, most of them were not interested.

With the new entrepreneur licence costing just $500 and requiring two documents, entrepreneurs can establish their company in just three hours according to Al Zaidi, the level of interest is increasing across all sectors.

Of all the venture capital deals that occurred in the Mena region in 2018, seven per cent happened in Saudi Arabia, just one per cent higher than 2017 according to data from Magnitt. This year however, greater growth in the amount and number of deals is expected, in fact almost every sector is gearing itself up for an innovations and entrepreneurial boom.

According to Abdulrahman Mutrib, the chief technology officer at Al Tayyar, one of the region’s biggest travel agencies, 97 per cent of Saudi’s economic growth will come from technology in the next five years. 

The rising level of entrepreneurial activity is evident for Omar Al-Shabaan, co-founder and chief executive officer (CEO) at The Space, a network of co-working spaces in Saudi. Al-Shabaan ended up building another floor in his Jeddah location in order to meet demand for office space for young startups.

“When it comes to people who have ideas, there are a lot. When it comes to people who are actually taking the entrepreneurial journey, there are also a lot, but is there maturity to the ideas or is it only copy and paste? It’s the latter. There are not many original ideas,” he says.

For all the talk of pushing entrepreneurship, Saudi Arabia’s ecosystem is still incredibly nascent. The country has yet to produce an exit of a value greater than $100 million. Many investors in startups are conventional businessmen looking to diversify their portfolio rather than exits.

“Four years ago when we first started the accelerator at KAUST, not many people knew what entrepreneurship was. There was a period of awareness and knowledge building,” says Amal Dokhan, director at the Babson Global Centre for Entrepreneurial Leadership. “What does innovation mean? It’s not just opening a shawarma place, so it took us a lot of time to do these campaigns.”

The need for education has not dissipated, not just for startups but other stakeholders in the ecosystem too, including the regulators.

“The VC culture still needs a bit of education as well so we can have the right people come into it, they want the returns really fast, they have a real-estate mindset,” says Dokhan. “The life cycle of a startup is super fast and super short, but that is not mirrored in the legalities side.”

One other legality that may come in the way for startups is Saudisation.

Uber is the latest company to feel the brunt of this policy, while not officially declared, from 25 March 2019, only Saudi nationals could work as Uber drivers.

That day, there were fewer Uber drivers during the day, with price surges of 2x as witnessed by Wamda. The majority of Saudi drivers for Uber and Careem have a day job, usually in the public sector and are only able to take the wheel in the evening, thus reducing the availability of drivers during the day.

"Government intervention in the private sector, especially the labour market, except for labour laws that protect employees, is usually a hindrance to private sector growth,” says Fares Ghandour, partner at Wamda Capital. “The private sector should be free to employ based on merit.”

However, one government official who asked not to be named thinks this move is being deployed in the more visible sectors only.

“Saudisation has been going on for a long time, all that’s happening now is that there is more focus on sectors that are easy to find the local talent,” says the official.

The government is issuing six visas for any company that has a Saudi national registered as the chief executive officer.

“For a startup, this is enough, you usually don’t need more than this in the beginning,” he says.

But for startups in the growth stage, they do need more. Riyadh-based logistics company Salasa has considered relocating to Dubai in a bid to attract the talent that is lacking in KSA.

“We used to say lack of funds was a challenge, but this is not an issue anymore especially with government support. A big hassle for us is to find someone talented who wants to work for a startup. This is why sometimes we think if we move to Dubai, it will be easier to acquire talent,” says Abdulmajeed Alymeni, co-founder and CEO at Salasa.

But given Dubai’s high cost of living, Saudi is positioning itself as an alternative, more cost effective hub for entrepreneurship, whether it can compete with the region's main hub, remains to be seen. 

“The opportunities are huge, there are a lot of emerging markets, a lot of areas that need change. There are also possibilities and opportunities for foreign startups to come to Saudi, we need that healthy competition to collaborate, partner and enhance companies here,” says Dokhan.

March 30th 2019, 9:13 pm

Turkey-based Prisync acquires Spotlite

Wamda

Prisync, a provider of competitor price tracking in the e-commerce market has acquired its Australia-based competitor Spotlite.

The agreement represents Prisync’s first acquisition.

“Welcoming the Spotlite brand and its customers into Prisync family will go a long way in helping us sustain and grow Prisync’s presence within Australia and also in the wider Asia Pacific region,” said Burc Tanir, chief executive officer at Prisync.

Prisync’s technology, enables e-commerce companies to automatically track their competitors’ product prices and stock availability. The company also offers dynamic pricing, enabling the e-commerce companies to automatically change the prices on their website in a bid to increase sales volume and become more competitive.

It is estimated that there are more than 10 million e-commerce companies in the world and the global market is projected to grow from $2.8 billion in 2018 to $4.8 billion in 2021 according to Statista’s recent research.

March 28th 2019, 3:00 am

In conversation with Christina Ganim of Kenz

Wamda

Christina Ganim founded Kenz with her colleague and friend Nicola Cuoco. The e-commerce website, founded in Palestine, sells underwear to women primarily in Saudi Arabia. The company recently won a place on the Misk 500 Mena Accelerator programme.

We spoke to Ganim, about her entrepreneurial journey and the opportunities for the youth in Palestine.  

Why did you become an entrepreneur?

I’ve always tried to do different things. I studied political studies and international law and I thought I would work at the United Nations but I obviously did not do that. I started learning more about entrepreneurship in Palestine. I had a couple of friends who had startups and I liked the community aspect. I started getting interested in apps and on a whim decided to take an online course on the business side of app development. I developed three app games and saw the whole process from start to finish. I liked the challenge, the work and experience and I wanted to learn more and explore it more.

How did the idea for Kenz come about?

We started Kenz with the idea of a space online for women. We drew from our own experiences. We don’t have such a great story about why we came up with lingerie, we wanted to do an online store and thought about products we liked and were interested in. When we were thinking of an idea, we saw that women had to go abroad to buy bras because they could never find what they were looking for. So we thought let’s start with lingerie since it is focused and specific and it is one product that you need.

What was the biggest difficulty you faced in starting your business?

We did not have any business experience and we learned along the way, it was very difficult. I didn’t know how to create an income statement and balance sheet. I had never hired people before. It was an extreme challenge. We are so lucky that we have five people, four women and a man who have been with us since the beginning. Also, working with men can be challenging especially when a woman is their boss, we always had problems with this. Our [male] software developer joined a year ago. It took us so long to find a really good tech person who understood what we were doing.

What is the biggest sacrifice you have made?

Given my background and everything I have studied, I could have a job that pays me much higher. For several months I have not had a salary but thankfully, I have the support of my family. At one point, we thought we wouldn't continue because we didn't have funding or enough sales and considered shutting down, but we thought no, this is something that could easily grow and scale.

 What is like being a startup in Palestine?

The biggest challenge is access to funds and talent. When it was just my co-founder and I, we were literally doing everything. We put the money we had saved ourselves into the business but that didn’t last long. We got funding from Ibtikar in June 2017 and they invested $150,000. Ibtikar really took a chance on us that is how we were able to grow the team.

In general, with entrepreneurship in Palestine, we transcend geo-politics and borders, as long as you have an internet connection you can work from anywhere. Entrepreneurship could be an answer to some of the challenges we face in Palestine – economic development, creating jobs, creating opportunities, there are so many talented young people who are educated yet they can’t find a decent job. Entrepreneurship could be the best answer for not relying on aid and foreign entities and instead having the talent start and bred from within the country and creating our own destiny.

What will your industry look like in the next decade?

It is giving me hope that the market growth achieved by Namshi and other players highlights the prospect for fashion e-commerce in the region and that it is possible to create influence for the next entrepreneurs to come and success within this industry. We are witnessing the transformation of retail in the region and I am certain over the next 10 years we will continue to see further acquisitions, growth among competitors, and of course a shift in the mindset among Middle Eastern shoppers, creating more avid, confident and trusting online shoppers in the region.

 

March 27th 2019, 9:12 pm

Egyptian e-sports company GBarena raises seed funding

Wamda

Source: Menabytes

Giza-based esports and gaming community GBarena has raised seed funding from HIMangel, the startup announced today. GBarena did not disclose the exact size of investment but has told MENAbytes that it is a six-figure (US Dollar) transaction and is part of their ongoing seed round that they’re aiming to close in the next six months.

Founded in 2015 by Samer Wagdy, Mustafa Zaza and Bishoy Mesdary, GBarena helps gamers find local and global challenges, enabling them to compete for titles and rewards. The startup allows users to create, publish and manage the tournaments through their web-based platform. The users once logged in can choose their favorite game titles to receive suggestions for both on-ground and online tournaments nearby.

The platform handles everything starting from registration, scheduling of matches and bracket generation to match results and announcements of final winners. GBarea also makes it easy for the tournament organizers to manage the tournaments. They have the options to add moderators who can assist in tournament management and stay in touch with participants using different communication channels.

Esports industry has been witnessing massive growth lately and according to some estimates is expected to exceed $1.6 billion by 2021. Epic Games, the company behind a popular game ‘Fortnite’ had allocated $100 million as prize money for different Fortnite tournaments. They recently announced to put another $100 million for 2019, which shows how big esports already is. Finals of esports tournaments attracting thousands of attendees and millions of online viewers has become a norm which has also attracted many brands in the industry who sponsor these tournaments.

Continue reading this story

March 27th 2019, 4:49 am

The Careem sale to Uber and how it affects the Mena startup ecosystem

Wamda

I would have liked Careem to go public and remain independent because that is how you make the biggest statement about the maturity of the regional tech ecosystem. But unfortunately, the region is not mature and wouldn’t have been able to support such an initial public offering (IPO) due to regulatory, liquidity and other hurdles that the regional regulators have not yet been able to resolve.

This is my first and most important message here, you want companies to stay here to open the markets, change the regulation on foreign ownership and allow companies that don’t have a track record of profitability to list and let the market decide whether it values these companies rather than let regulators artificially interfere.

So I started with the challenging news, but here is the fantastic news for the ecosystem.

This sale to Uber proves that the region can have a unicorn that maintains and increases its value.

It also says that when you scale and prove that you can compete, you will be able to attract global investors whether strategic or any other kinds of investors. Uber in this case, General Atlantic in the case of Property Finder.

This means that the doom and gloom about the regional political and economic environment applies to certain sectors but not to tech and digital disrupters. They will thrive and grow and deliver stellar results regardless of the economic environment in the bricks and mortar economy.

Moreover, this acquisition marks the first substantial exit for the venture capital (VC) community in the region, most big VCs including STC Ventures, BECO, Wamda Capital and STV to name a few, invested and are going to reap massive returns to their limited partners.

Then there are the big conglomerates and families in the region, such as Kingdom Holdings and Al Tayyar. These are all regional investors who are at the core of supporting and investing in homegrown companies. They invest early and reap the benefits.

And all the amazing McKinsey and Company colleagues and angel investors who bet on Careem co-founders Mudassir Sheikha and Magnus Olsson early before the launch, they are going to do 10s of multiples on their investments. Go Angels!

Most importantly, this liquidity event will generate wealth to so many Careem employees like the region has never seen before. Not only will the founders get huge infusion of funds, but the generous stock option plan of the company means there will be tens if not hundreds of people who will either get millions or hundreds of thousands in paychecks.

This matters, because that is what entrepreneurship is all about – creating value and generating new wealth away from the traditional wealth generation in the region from inheritance or family businesses. This is completely new and unprecedented in its scope.

Last but not least what this means for the ecosystem is that so many massively talented people will leave their work at Careem and become new entrepreneurs, innovating and wanting to replicate what they saw at Careem, or become co-founders of already established startups or invest in startups.

This will be what the Maktoob sale to Yahoo did to the region in 2009 to the factor of 10s of X… a new era has arrived and this is going to be the era of the Careem graduates taking the region to the next level of innovation and company creation – creating new jobs, and new wealth.

 

March 26th 2019, 10:13 pm

Uber confirms Careem acquisition for $3.1 billion

Wamda

Uber, the US-based ride-hailing giant has acquired UAE-based Careem in a deal worth $3.1 billion in a cash and stocks transaction.

Uber will pay Careem $1.4 billion in cash and the remainder in convertible notes marking the biggest exit of a technology startup in the Middle East to date. The transaction is expected to close in the first quarter of 2020.

According to statement from Careem, the comany will remain a "wholly owned subsidiary of Uber, operating independently with its own brand and services. Careem will retain the name, app, branding".

Careem was founded by Magnus Olsson and Mudassir Sheikha in 2012 and within four years became the Middle East and North Africa’s (Mena) first technology startup to become a unicorn, a company valued at $1 billion.

Today, Careem now operates across 120 cities in 15 countries and has 33 million users and 1 million drivers. It also has several other offerings beyond ride-hailing, including a delivery service, food delivery and is currently exploring financial technology solutions.

"Joinring forces with Uber accelerates our collective ability to improve the region's transportation infrastructure at scale and offer diverse mobility, delivery and payment options," added the Careem statement.

The acquisition will no doubt strengthen Uber’s position in the Middle East, where it operates across eight countries and offers some of its other services like Uber Eats, Uber Scooter and an on-demand bus service that it first launched in Cairo. One of Uber’s biggest investors is also in the region, back in 2016, Saudi Arabia’s Public Investment Fund (PIF) injected $3.5 billion in cash into the company for a five per cent stake.

"With a proven ability to develop innovative local solutions, Careem has played a key role in shaping the future of urban mobility across the Middle East, becoming one of the most successful startups in the region," said Dara Khosrowshahi, chief executive offier at Uber. "Working closely with Careem's founders, I'm confident we will deliver exceptional outcomes for riders, drivers and cities in this fast-moving part of the world."

In its initial few years, many investors were reluctant to place their bets on Careem, believing it would not be able to compete with Uber, despite the fact that Uber was the second entrant to the region and had yet to establish as strong a presence. Many also believed that Careem’s valuation was too steep.

 

 

Having worked as consultants for McKinsey and Company, Olsson and Sheikha understood the dynamics of the markets in the Middle East and were able to pivot and react quickly to customer needs.

“They switched from B2B to B2C and offered something customers wanted,” said Fadi Ghandour, chairman at Wamda Capital which first invested in Careem in 2015 in its $60million Series C round. “They also scaled to Saudi Arabia very quickly and offered cash payments. They understood the market.”

It was Careem’s ability to scale so quickly to the region’s most important markets – UAE, Saudi Arabia and Egypt, at times launching when regulators were ill-prepared for the ride-hailing revolution, that enabled them to stay ahead even when Uber did launch in the UAE in 2013.

“Careem was able to provide a solution for the infrastructure problems that several cities in the region faced most notably the absence of robust and effective public transport networks ,” said Khaled Talhouni, partner at Wamda Capital. “It managed to localise a global business mode through providing the ability for consumer to pre book their rides and pay in cash. In doing so and in scaling the model they proved that the region was capable of producing a business that could compete  head to head with a global juggernaut.”

Careem has raised $800 million to date and in its last round raised $200 million, valuing it at $2 billion.

For Uber, this acquisition places it in good stead for its initial public offering (IPO) on the New York Stock Exchange expected to take place in April this year at a valuation of $120 billion according to some reports. 

 

March 26th 2019, 4:23 am

UAE's The Modist secures investment from Farfetch and Nicola Bulgari

Wamda

Source: Harper's Bazaar 

Luxury e-tailers The Modist, who already counts Vaultier7 and Chalhoub Group as investors, has confirmed strategic investments from Farfetch and Nicola Bulgari, vice chairman of Bulgari Group.

The partnership aims to “bringing together market-leading industry, VC and technology players to guide The Modist journey,” according to Nicola Bulgari.

“We are delighted to welcome Farfetch, an invaluable player in the world of luxury and innovative technology and look forward to continuing our journey of growth with their support and expertise,” said Ghizlan Guenez, founder and CEO of The Modist. “Equally, Mr. Nicola Bulgari values excellence in the needs of the evolving luxury consumer and we are thrilled to have his guidance and vast experience, thereby reaffirming our positioning in the rapidly evolving luxury modest fashion space”.

Continue reading this story

March 26th 2019, 3:53 am

Uber confirms Careem acqusition for $3.1 billion

Wamda

Uber, the US-based ride-hailing giant has acquired UAE-based Careem in a deal worth $3.1 billion in a cash and stocks transaction.

Uber will pay Careem $1.4 billion in cash and the remainder in convertible notes marking the biggest exit of a technology startup in the Middle East to date. The transaction is expected to close in the first quarter of 2020.

According to statement from Careem, the comany will remain a "wholly owned subsidiary of Uber, operating independently with its own brand and services. Careem will retain the name, app, branding".

Careem was founded by Magnus Olsson and Mudassir Sheikha in 2012 and within four years became the Middle East and North Africa’s (Mena) first technology startup to become a unicorn, a company valued at $1 billion.

Today, Careem now operates across 120 cities in 15 countries and has 33 million users and 1 million drivers. It also has several other offerings beyond ride-hailing, including a delivery service, food delivery and is currently exploring financial technology solutions.

"Joinring forces with Uber accelerates our collective ability to improve the region's transportation infrastructure at scale and offer diverse mobility, delivery and payment options," added the Careem statement.

The acquisition will no doubt strengthen Uber’s position in the Middle East, where it operates across eight countries and offers some of its other services like Uber Eats, Uber Scooter and an on-demand bus service that it first launched in Cairo. One of Uber’s biggest investors is also in the region, back in 2016, Saudi Arabia’s Public Investment Fund (PIF) injected $3.5 billion in cash into the company for a five per cent stake.

"With a proven ability to develop innovative local solutions, Careem has played a key role in shaping the future of urban mobility across the Middle East, becoming one of the most successful startups in the region," said Dara Khosrowshahi, chief executive offier at Uber. "Working closely with Careem's founders, I'm confident we will deliver exceptional outcomes for riders, drivers and cities in this fast-moving part of the world."

In its initial few years, many investors were reluctant to place their bets on Careem, believing it would not be able to compete with Uber, despite the fact that Uber was the second entrant to the region and had yet to establish as strong a presence. Many also believed that Careem’s valuation was too steep.

 

 

Having worked as consultants for McKinsey and Company, Olsson and Sheikha understood the dynamics of the markets in the Middle East and were able to pivot and react quickly to customer needs.

“They switched from B2B to B2C and offered something customers wanted,” said Fadi Ghandour, chairman at Wamda Capital which first invested in Careem in 2015 in its $60million Series C round. “They also scaled to Saudi Arabia very quickly and offered cash payments. They understood the market.”

It was Careem’s ability to scale so quickly to the region’s most important markets – UAE, Saudi Arabia and Egypt, at times launching when regulators were ill-prepared for the ride-hailing revolution, that enabled them to stay ahead even when Uber did launch in the UAE in 2013.

“Careem was able to provide a solution for the infrastructure problems that several cities in the region faced most notably the absence of robust and effective public transport networks ,” said Khaled Talhouni, partner at Wamda Capital. “It managed to localise a global business mode through providing the ability for consumer to pre book their rides and pay in cash. In doing so and in scaling the model they proved that the region was capable of producing a business that could compete  head to head with a global juggernaut.”

Careem has raised $800 million to date and in its last round raised $200 million, valuing it at $2 billion.

For Uber, this acquisition places it in good stead for its initial public offering (IPO) on the New York Stock Exchange expected to take place in April this year at a valuation of $120 billion according to some reports. 

 

March 26th 2019, 3:12 am

Ibtikar Fund invests in Receet

Wamda

Palestine’s Ibtikar Fund announced its investment in Receet, a mobile application that provides digital receipts in business transactions.

The size of the investment has not been disclosed. Receet will use the investment to improve its product and increase its customer base.

“Using the Receet app consumers can easily find receipts to make a return, file taxes or complete expense reports by searching for the receipt on their smartphones,” said Omar Barkawi, founder and chief executive officer at Receet. “They can also categorise receipts and will have the ability to upload their receipt data to personal accounting software and business expense tracking software and apps.”

The digital receipts generated by Receet can be indexed, categorised and easily searched for, all of which is not possible with email receipts.

“We are excited to invest in Receet and help them develop a product that will not only improve the customer experience, but also saves money and our environment. We believe now is the perfect time for Receet, as consumers become more conscious of their environmental footprint and seek to make better choices,” said Habib Hazzan, managing general partner at Ibtikar Fund. “We also see a lot of opportunity for Receet for the banking industry and big retailers who spend millions of dollars simply printing receipts.”

March 25th 2019, 7:44 am

Abu Dhabi offers startups Dh535 million through new hub

Wamda

Abu Dhabi will be investing Dh535 million in startups as part of a new entrepreneurship space called Hub71 launched in partnership with sovereign wealth fund Mubadala Investment Company and Japan-based investment bank Softbank as well as Microsoft and Abu Dhabi Global Market (ADGM).

As part of the emirate’s Ghadan 21 economic plan, the hub is intended to help diversify Abu Dhabi’s economy away from oil to become a knowledge-led, digital economy.

“Hub71 is an interconnected global ecosystem that we believe will transform Abu Dhabi,” said Elham Al Qasim, director at Mubadala. “Our mission is to make Abu Dhabi one of the best places in the world to live, invest, work and visit.”

Abu Dhabi will be providing a Dh1 billion ($272 million) package, half of which will be used to provide subsidies for housing, office space, health insurance and the remaining Dh535 million for an investment fund for both startups and venture capital (VC) firms which will be deployed over the next three to five years. The government is encouraging VCs to set up base at Hub71 by co-investing with them though a government matching scheme.

 “Hub71 is more than just an incubator, [it] is going to be a community where many different partners, investors, large technology companies, service providers and government all engage,” said Ibrahim Ajami, head of Mubadala Ventures. “At the heart of a real ecosystem is collaboration and engagement.”

It is the collaboration and partnerships that Hub71 is fostering that sets it apart from other attempts at establishing an ecosystem in the Middle East according to Ajami.

Mubadala launched its venture capital arm, Mubadala Ventures, back in 2017 and focused primarily on investments in Silicon Valley, where it has invested in vertical farming via Plenty, autonomous driving through Nero and communications technology via Slack.

“It took us the past three years to really understand the business, develop the brand and have cycles of how we evaluate funds and companies and there is no better place to do that than Silicon Valley,” said Ajami. “We believe now is the time for Mubadala to be active here [in the Middle East].”

Adding to the ecosystem will be some of Softbank’s portfolio companies which include Uber, China’s Didi and India’s OYO.

“There’s an immense amount of interest in our region, over the next six months you will see some Softbank companies come to Hub71,” said Ajami.

The hub will be based in the ADGM Square on al Maryah Island and is hoping to attract early and growing technology companies from all around the world. Mubadala is hoping to have 100 startups coming in and out of the Hub71 ecosystem over the next three years.

March 24th 2019, 8:29 am

UAE’s Masdar City launches new hub for tech startups

Wamda

Source: Tahawultech

Masdar City, Abu Dhabi’s flagship sustainable urban community, has launched Tech Park, a new destination for startups focused on technology, sustainability and the digital economy.

The strategic hub will house companies receiving funding and mentorship through the Catalyst, the Middle East’s first startup accelerator specialising in clean technology and sustainability, as well as provide a base for research & development and other enterprises operating in the sector.

Yousef Baselaib, Executive Director for Sustainable Real Estate at Abu Dhabi Future Energy Company (‘Masdar’), said, “The launch of Tech Park marks an important milestone in Masdar City’s development. As a sustainable urban community with a rapidly growing clean-tech cluster and business free zone at its core, we are delighted to welcome the addition of Tech Park, the first destination of its type focused on innovation in the digital economy and sustainability.”

The working population at Masdar City today exceeds 4,000 with around 600 companies now operating out of the city, from global corporations such as Siemens, Honeywell and Lockheed Martin, to homegrown enterprises and freelance entrepreneurs.

Overlooking Masdar Park, Tech Park is an eco-friendly cluster of offices, hot desks and workshops made from recycled shipping containers. Current tenants include Safe City Group, a local developer of turnkey solutions for smart and safe city projects, De L’Arta, a UAE skincare brand whose products are made from sustainable and locally sourced ingredients, Solva Technologies, Mana Ventures and Al Hakeem Advanced Engineering Services LLC.

Besides offering a fashionably alternative work environment to young businesses and entrepreneurs, the Tech Park’s shipping containers meet Masdar City’s strict sustainability standards, having significantly lower embodied energy costs than regular offices.

Continue reading this story

March 24th 2019, 7:30 am

E-groceries: The fastest growing e-commerce segment

Wamda

In the $8.3 billion e-commerce sector in the Middle East and North Africa (Mena), it is the grocery segment that has perhaps experienced the most amount of disruption.  

Buying groceries either through a website or app is increasingly becoming the norm for many people across Mena as companies like Carrefour, Danube and smaller supermarkets offer their produce direct to the customer. About 30 per cent of users across Mena are now shopping this way. The e-groceries market is currently worth $200 million in the GCC and Egypt, accounting for less than 1 per cent of the e-commerce market and so there is room for rapid growth.

The region is no stranger to food delivery. Apps like Zomato, Careem Now and Deliveroo have normalised search and taps to get food. This restaurant-to-door delivery service is worth Dh12.9 billion ($3.5bn) in the UAE alone with 60 per cent of the population using a food app on their smartphone or tablet. Germany’s Delivery Hero, which counts Talabat, Hunger Station, Carriage and now Zomato in its portfolio of companies in the Middle East can attribute almost half of its $2 billion yearly revenues to this part of the world.

Talabat is now offering groceries on its platform, highlighting the natural progression in food consumption and delivery. E-commerce platform Wadi.com has completely shut down its non-food offering to focus now on grocery delivery in partnership with Carrefour. Majid Al Futtaim, which owns the franchise rights to the French hypermarket led an investment round worth $30 million in Wadi.com back in October 2018.

The trends are highlighted in the Online Grocery Retail in Mena report by Wamda Research Lab. As the most under-penetrated sector of the e-commerce sector, we expect the e-grocery market to experience a growth rate of more than 100 per cent year on year for at least the next couple of years. To find out more about the emerging trends and the challenges of e-grocery and how the region’s sector compares globally, read the report here.

We recently recorded a podcast with Instasalla, one of Kuwait’s fastest growing e-grocery companies. To get a better understanding of the processes in delivering fresh produce via an app, listen here.

 

March 24th 2019, 2:04 am

The anatomy of an exit in the Middle East

Wamda

Khaled Talhouni is the managing partner at Wamda Capital

Anyone active in the startup scene today seems to be pre-occupied with when and how liquidity will be generated for investors and founders in the Middle East. Indeed, the very validation of the entrepreneurial ecosystem rests, in large part, on the ability of its constituents, the venture capitalists (VC) putting their money to work and investing in these companies and the founders dedicating their time and effort, to generate a strong financial return.

It is a natural question to posit and investors continue to consider how these exits might materialise so that they can better position their portfolio companies for exits.

Understanding the driving forces of an exit

Tech and tech-enabled companies in the region are maturing rapidly. Generally, businesses attract global and local attention from would-be acquirers when they scale beyond a certain threshold.

In the past five years, companies that boast users in the millions and revenues in the hundreds of millions have grown substantially.

Five years ago, it would have been impossible to name more than one or two companies with revenues north of $10 million. There are now dozens of tech companies that fit this description in the Middle East, including Careem, Anghami, Souq and Noon. Achieving such scale and geographic footprint attracts acquirers, both locally and internationally as was evident with the acquisitions of Dubizzle and Souq.

VC funds are now entering their harvesting period

As these companies continue to scale, the underlying VC funds that have helped to drive and fuel their growth are all on average in their fifth to seventh year of operation as most VC fund vintages in the region fall between 2012 and 2015.

What this means effectively is that as the typical five-year investment period ends and funds enter into their harvesting periods, they are under pressure to market these assets for exit in line with their agreements with their own fund investors. This process of active marketing will inevitably raise awareness for the quality of assets in the region and create pressure for exits to materialise.

Tech-based disruption is affecting “real world businesses”

Traditional industries by which most family wealth has accumulated over the past 30-40 years in the region is under pressure from emerging technologies and technology-enabled companies. E-commerce is challenging traditional brick and mortar retail at a pace considered unfathomable five years ago and leading to what can only be described as a period of very serious soul searching among the region’s retailers as either their sales decline or are forced to slash their margins in an effort to compete with online retailers.

This dynamic between emerging technology players and traditional players is replicated across industries from mobility to hospitality and financial services at varying speeds. What is certain, and in line with the historical trend, is that the rate of this disruption is set to accelerate as more and more users come online.

In order to get ahead of this disruption curve, traditional businesses will have to look to the tech startups for acquisition to help accelerate their digital transformation. In many cases, they will attempt to do it themselves but will realise that it is easier, faster and more cost effective to acquire than to greenfield a digital platform. 

Generational succession in traditional business is driving interest in the adoption of digital platforms. Most traditional and tech-enabled businesses are today led by a younger generation of leaders who are more at ease with technology and a digital world.

Global companies seeking accelerated presence and regional footprint

The region is among one of the few markets where global players are yet to enter. The complexities of operating in our markets is both a hindrance for entrepreneurs as well as an opportunity to maximise value. The realities of operating in the Middle East and North Africa (Mena) requires companies to scale in multiple countries simultaneously not least among them Egypt, Saudi Arabia, the UAE and the GCC more broadly. On the cost side, the question of regional footprint is no less pertinent. Talent is more readily available on a cost-effective basis in the Levant and Egypt.

This imperative to operate in multiple countries both for revenue/commercial purposes as well as cost optimisation creates a natural barrier to entry for global businesses.

Startups that are able to navigate this successfully and create truly regional businesses find themselves in highly defensible positions whereby it becomes easier for global players to acquire them rather than attempt to recreate this complex regional set up from scratch and accelerates the path to market entry considerably as well as maximising the probability of success.

Historically, this is the profile of exits that have transpired in the region – global companies looking for new markets.  The exit of Souq to Amazon is a good example of a regional company being acquired as a point for market entry. Germany’s Delivery Hero has been active in pursuing a consolidation strategy for regional footprint by acquiring Talabat, Hunger Station, Carriage and most recently Zomato’s UAE business. Indeed Delivery Hero’s entire Mena business of more than $2 billion is driven by an acquisition strategy.

Naspers’ recent acquisition of the remainder of Dubizzle for $190m is another example of global companies acquiring regional players for local footprint.

Private equity both global and local are looking for new opportunities

The conventional wisdom had previously been that technology was its own discreet and easily identified sub-sector of the economy. The 1990s tech boom was focused on companies that lived and breathed within their own sector and would have been readily identifiable as “technology companies”.

Today, the world’s fastest growing and emerging tech companies directly challenge traditional business models across a variety of industries. As such traditional private equity (PE) players that had previously been focused on brick and mortar businesses are also looking at investing in technology companies. Uber for example, directly challenges the growth of traditional mobility businesses that had hitherto been a target for PE in the past.

Also in search of new markets are global investors looking for new growth opportunities. As mentioned before, the region is one of the last remaining under-developed markets when it comes to technology. As such, global PE will be actively seeking opportunities in this segment in our region.

General Atlantic’s investments in both Network International and PropertyFinder are a clear example of this profile of a liquidity event, Goldman Sachs’ recent investment into online modest fashion retailer Modanisa is also a clear example of a private equity becoming increasingly active in this category. 

Money waiting on the sidelines

The Mena region as a bloc is one of the world’s largest economies - representing an economy worth almost $2 trillion.

It is also worth noting that some of the world’s largest sovereign wealth funds operate out of the region. These large and concentrated pools of capital whether government or sovereign, quasi-government or entirely private have traditionally shied away from investing regionally unless significant scale is achieved. It is not feasible for these pools of capital to invest in relatively small ticket investments and will only react once opportunities present themselves at scale. For example, Gulf Finance House’s recent acquisition with Al Futtaim of The Entertainer is a good example of a quasi-sovereign investment firm wading into the tech and tech-enabled sphere as The Entertainer grew to a size where it became attractive.

Secondaries generating liquidity for early stage investors

Exits are already happening and accelerating only not in the way one would consider or think about as an exit.

Across our portfolio companies we’ve seen numerous instances of early stage and angel investors exiting at the Series A, Series B and Series C rounds. These exists tend not to be widely publicised given that they are relatively small and bilateral agreements between small shareholders or occur as part of larger rounds

Many of Wamda Capital’s Series A and Series B rounds include some element of secondaries where early stage investors achieve some liquidity. In Jamalon’s most recent round for example, a number of secondary transactions had taken place.

The twin paradigms of success and failure

Our prediction that exits will accelerate are based on the above points and we believe this is a dynamic that will be borne out over the course of 24 months from 2019 into 2020 rather than just in 2019 alone.

The nature of the innovation cycle is not one of success and exits alone. Failure is at the heart of this narrative as well. The nature of the entrepreneurial endeavor if fraught with risk, it is the very essence of risk and with that risk comes the very real eventuality of failure.

It is critical that we remember that failure is a necessity and crucial part of the entrepreneurial process and we are unable to have success without it. Undoubtedly a great many companies helmed by intelligent, hardworking and driven entrepreneurs will fail. Companies both big and small will fail as part of this acceleration of the entrepreneurial and innovation ecosystem and that is a normal part of this process. However, it is our firm belief that we will see success manifested in the creation of value and exits that will far outstrip the failures that we will see in the coming two years.

March 20th 2019, 9:30 pm

MIT SciTech 2019

Wamda

The MIT SciTech 2019 is happening on April 19-21, and this year's theme is  “Envisioning the Future: Cities of MENA.” Within the topics of Energy, Innovation, and Infrastructure, the conference will explore the problems, perspectives, and potential solutions that will help revolutionize the cities of the Middle East. The vision of SciTech is to create a global network of students, entrepreneurs, researchers, and innovators who are interested in using both science and technology to help change the region. 

Introduced last year, The SciTech Exhibition is a great way for participants to engage with organizations and companies to create partnerships and explore career opportunities.

In addition to the Exhibition, the event will also be introducing the SciTech IDEAthon in 2019 - an idea pitch competition for teams in each of the main topics: Energy, Infrastructure, and Innovation.

The hackathon-style IDEAthon is a unique SciTech experience that will run in parallel to the main conference. Attendees who choose to participate in the IDEAthon will be divided by topic and will work in teams to pitch their solutions to a panel of judges and the entire audience. Winners will walk home with cash prizes. 

Find out more here

March 20th 2019, 8:52 am

Arabnet Startup Battle - Baghdad

Wamda

As part of the IBBC Tech Conference happening on April 30 at the Babylon Rotana Hotel, Iraq Tech Ventures and Arabnet are hosting a tech startup competition 'Arabet Startup Battle - Baghdad' to showcase Iraq’s best and brightest tech entrepreneurs on April 29 at the Station, Baghdad.

Startups will pitch their business in 5 minutes to a panel of judges made up of angel and corporate investors, along with key industry leaders. Judges will choose 3 promising Iraqi startups who will be entered into Arabnet’s Regional Startup Championship on 12-13 June in Beirut, where the winning startup will win a cash prize and an acceleration scholarship in Silicon Valley by TechWadi.

Startups must:

Startups can register for free here. Applications are due April 15.

March 20th 2019, 8:09 am

Egypt sets up $57 million FinTech startup fund

Wamda

Source: ITWeb Africa

FinTech start-ups in Egypt could soon have access to 1 billion Egyptian pounds (approximately US$57-million) after the country's government set up fund via the Central Bank of Egypt (CBE).

According to the CBE the fund will support research into FinTech as well as start-up companies focused on digital finance.

The objective is to position Egypt has a regional centre for electronic financial services said the finance institution.

Ayman Hussein, Deputy Governor of the CBE in charge of Payment Systems and Information Technology, made the announcement while speaking at the Arab African Forum in Aswan, Egypt, on a panel discussing to the impact of financial technology and innovation on Africa.

Hussein said the CBE is striving to ensure the development of financial technology in Egypt by creating a financial technology unit.

"We are also creating a new application laboratory for innovative financial technologies which would be used to test new applications," he said.

Hussein also mentioned plans to launch a cybersecurity centre for the banking sector by the end of 2019, responsible to deal with cybersecurity threats and incidents.

Hussein said: "Egypt has the success factors that have made it a pioneer in the financial technology sector, including the strong demand for financial services, the banking sector, telecommunications companies, electronic payment companies, insurance companies, regulators, incubators, business accelerators, investors and small and medium-sized enterprises (SMEs) financial."

While Egypt has the largest population in the Middle East and North Africa (MENA) region, only 14% of the adult population has a bank account, according to the World Bank Global Findex.

The North African country has one of the largest mobile telecom markets in Africa, with effective competition and a penetration rate of approximately 105%.

The main challenges facing FinTech start-ups include funding, the ability/ capacity to create partnerships with banks and reaching the unbanked sector.

 

March 20th 2019, 5:33 am

Jamalon raises $10 million in Series B

Wamda

UAE-based online book retailer and publisher Jamalon has closed the first leg of its Series B funding round raising more than $10 million from existing and new shareholders.

The round was led by Wamda Capital, followed by Aramex with new investments from Anova Investments, 500 Falcons and Endeavor Catalyst. It is the largest amount received by a Middle East e-commerce retailer to date.

Founded in 2010 by Ala’ Alsallal, Jamalon plans to use the funds to increase the reach of Arabic books worldwide and expand its print-on-demand service which is capable of printing more than two million titles in under five minutes per book.

“We are very excited to close this new round with investors that have been supporting us from the beginning,” said Alsallal. “Our ability to service customers globally via Jamalon’s five distribution hubs will grow even further thanks to our data-driven approach.”

Jamalon today offers more than 10 million publications in both Arabic and English working with 3000 Arabic publishers and 27,000 English-language publishers in a market valued at $1.7 billion.

“We are excited to lead this funding round and to continue supporting Jamalon in its mission to reinvent the region’s publishing and distribution industry,” said Fadi Ghandour, executive chairman at Wamda Capital. “The print-on-demand solution is an example of how the industry is evolving and Jamalon is primed to capitalise on this shift and further scale its business.”

March 19th 2019, 1:27 am

In conversation with Abdullah Boodai of Kuwait's Snapbook

Wamda

Snapbook is a Kuwaiti startup that began as a photo-printing service. Today, it likes to describe itself as a gifting service, offering customised and personalised products like mugs, cushions and keyrings.

The company raised $1.5 million in seed funding in 2016 from Faith Capital and is now looking to raise up to $3 million in a pre-Series A round.

We spoke with Abdullah Boodai, Snapbook’s founder and chief executive officer about his entrepreneurial journey.

Why did you become an entrepreneur?

I began my career as an investment analyst in an investment company. One of the many responsibilities was visiting our portfolio companies and reviewing their performance on a regular basis. During that time, I also had my own web development startup.

Working as a part-time entrepreneur and witnessing those portfolio companies grow, I discovered my passion for running businesses and building something from scratch. During the period, I co-founded and managed several businesses in several sectors including healthcare, real estate, manufacturing and retail.

How did the idea for Snapbook come about?

In 2014, my wife and I returned from a trip and wanted to print the photos that we captured on our iPhones. The process was tedious and inconvenient having to go through a series of steps such as transferring the photos and visiting photo studios to print your photos. I realised an opportunity existed, which was to simplify the photo printing process.

As a result of my experience as an investment analyst, I knew that printing photos was too narrow of a business to scale.  I began researching international companies and decided to offer printing and gift customisation services. We did not reinvent the wheel, we simply adapted it to this region’s needs.

What do you feel is the biggest sacrifice you’ve made?

The biggest sacrifices are family time, social life and financial stability. As an entrepreneur the actual success comes a few years down the line if you sell your business or scale, you should always keep an exit strategy in mind and if you don’t, you will just be an employee of your own business.

There is an everlasting imbalance between social life and business. In order to succeed, you have to accept that and live by it.

What are your main challenges?

Being the first of its kind in this region, finding talent is very difficult. Another main challenge in this market is managing cash on delivery, which could reach 85 per cent of total sales. Since we are producing a customised product prior to receiving payment, the risk of payment loss is increased. We created a system capable to reduce such occurrences which allow us to easily manage those orders.

You have kept your production team in the Middle East, why is this?

This region relies heavily on photo privacy. Our female customers would only feel comfortable if females handle their photos. Considering this important requirement, we have decided to keep our production and customer service team members strictly females, which we refer to as “100 per cent pink service”.

What will your industry look like in the next decade?

If you rewind back 20 years, Kodak capitalised on giving customers the ability to save their photos. They referred to this as the “Kodak moment”. Through the years, Kodak failed to keep up with the technology. Technology might have changed, but people and their sentiments have not. They still want to cherish their memories through print, but with convenience. Rather than visiting a store to create a personalised gift or print a photo album, you can do so from the palm of your hands. Technology will continue to evolve and we will continue to evolve with it. This is rooted in Snapbook’s DNA.

 

 

March 18th 2019, 9:55 pm

Kuwait’s Carriage expands to Egypt, launches in Cairo after onboarding 600 restaurants

Wamda

Source: Menabytes

Kuwait-based food delivery startup Carriage has expanded to Egypt, the startup told MENAbytes today, adding that they’ve been testing the service for over a month and have launched it officially last week in Cairo. Egypt is the sixth market for Carriage. Started with Kuwait, their services are also available in UAE, Saudi, Bahrain, and Qatar.

The startup that is owned by Delivery Hero after (the Germany-based global food delivery giant acquired it last year) has already onboarded 600 restaurants in Cairo and will be launching them in different phases, Carriage’s Chief Operating Officer Bader Al-Ajeel told MENAbytes.

With a team of over 100 employees in Egypt, Carriage has been preparing for Cairo launch for months.

“We never compromise when it comes to quality of service. This is why Carriage launched alpha phase a month ago to ensure full alignment with the local setup. That alpha phase allowed us to launch now with the desired quality of service,” explained the COO.

Carriage’s food delivery services are currently available in different areas of Cairo including Maadi, Shaikh Zayed City, Heliopolis, Fifth Settlement, 6th of October, and Nasr City. The startup plans to expand them to cover more areas of Cairo and then launch in Alexandria and two other cities in Egypt later this year, said its COO, speaking to MENAbytes.

Just like their other markets, they are planning to expand beyond food deliveries in Egypt.

“Carriage will bring a whole lot more to the table with groceries, flowers, pharmaceuticals, fashion, cosmetics, and more. Think of Carriage as your personal driver,” explained Bader Al-Ajeel.

Continue reading this story 

March 18th 2019, 3:15 am

Convenience and efficiency drive Mena's health tech innovations

Wamda

Where and when the world’s first hospital was established is frequently disputed, but there is little doubt that the Middle East was a medical powerhouse during the height of the Islamic Golden Age. Under various caliphs, the region was once a pioneer of medical advancements, developing tools and apparatus that still exist in one form or another in today’s hospitals.

But much like other aspects of societal progress in the Middle East and North Africa (Mena), stagnation supplanted innovation, until now.

According to a report from the Middle East Medical Devices and Diagnostics Trade Association, the annual value of the medical technology market in the region is set to grow to $11 billion by 2021 while overall healthcare spending will reach $144 billion in Mena by 2022 according to Al Masah Capital.

One big part of that spend is technology, which has managed to permeate through almost every sector of healthcare. Technology is increasingly being used to treat the causes and symptoms of chronic illnesses like diabetes, which affects 35 million people across the region. But while investment in the sector is increasing, the region tends to lack in deep technology innovation and research and development (R&D).

Many of the startups that have emerged in healthcare technology tend to be on the services side, aiming instead to increase access, efficiency and accuracy while cutting costs for providers.

Finding and Booking

One of the more popular startups to have emerged in Mena are online booking portals. Finding the right doctor for your needs can take some time, particularly if you are not familiar with the medical care available in your area.

Egypt’s Vezeeta, which recently raised $12 million in its Series C round and an additional $1 million from the International Finance Corporation (IFC) and Morocco’s Dabadoc have made finding, reviewing doctors and booking appointments a simpler process.

In the UAE, Fodhil Benturquia has managed to sign up 1000 doctors onto his platform, Okadoc, with plans to have signed up 30 per cent of all doctors in the UAE by 2022. The idea for his company came about from his own arduous experience of trying to book an appointment with his doctor when he was ill.

“We want to solve the first step – I’m sick, I want to feel better,” says Benturquia. “That experience of accessing healthcare, I want to make it efficient. Finding a doctor who speaks your language, within your insurance network, that is available today if you search, but organising that data is extremely important.”

Such services claim to cut down on no-shows by up to 75 per cent as they give patients reminders of their upcoming appointments.

Better Access

For those who find it difficult to make the time to visit a doctor or perhaps cannot afford to do so, tele-medicine and tele-health is becoming a viable alternative.

One tele-health startup is Dubai-based Altibbi, which has so far raised $8.5 million since its launch in 2015. The Arabic platform provides articles, informative videos and the ability to start a consultation with a healthcare professional over video or audio chat. Altibbi recently launched in Egypt in partnership with the country’s health ministry and offered a million free consultations to help alleviate the burden of medical costs for Egypt’s poorer communities.

Healthcare can be incredibly hierarchical in the Middle East with economic status usually determining access to and quality of healthcare. Health at Hand, a tele-medicine company founded by Charlie Barlow aims to democratise access to primary healthcare.

“I really got a sense that it wasn’t a level playing field. Access was based on wealth and location,” says Barlow. “Access to quality primary healthcare is a basic human right and not a privilege for the few, yet the reality is quite different.”

He founded Health at Hand in 2016 operating with four full-time doctors. Barlow claims the company would only need 13 doctors to service 3 million people on its platform. Every patient who calls experiences a waiting time of just two minutes. The company hopes to be the first point of contact for non-emergency healthcare, helping to reduce costs for insurers and patients.

“The market is completely broken, mandatory health insurance puts more pressure on insurance companies,” he says.

Health at Hand is looking to expand and incorporate drug delivery onto its platform. If a patient is suffering from a cold, a doctor on the app will be able to diagnose it, prescribe the medications, which will then be delivered to the patient.

“In most instances your tele-health experience will be as good if not better than seeing your doctor face to face,” says Barlow who believes the reasons for that include the short wait time and its “robust technology”.

Scope for Innovation

According to a report from PwC, the Middle East has the foundations to become a global leader in artificial intelligence research and development (R&D). With two thirds of the survey respondents saying they felt comfortable replacing human doctors with AI or robots, the region is already open to technological change.

“When you combine the clinical workforce shortages in the Middle East, with more positive factors like a young, digitally minded population that, is willing to adopt AI and robotics – PwC thinks the Middle East could leapfrog other countries in the these technologies,” says Tim Wilson, Middle East health industries leader at PwC.

In a hackathon organised by the Ministry of Health and run by Wamda in partnership with Hikma Ventures, the sophistication of the ideas and level of technicality was visible. The two-day challenge which took place in Sharjah in February, invited students from across the UAE to pitch their health tech ideas under the theme of mental illness and chronic diseases. The winning idea was Epicap, a hat fitted with sensors to help people with epilepsy know when a seizure is about to happen so that they can get to a safe space.

But while the ideas and the willingness to innovate exists, there is a lack of infrastructure and funding support to truly test and scale such ideas.

Wassim Merheby, co-founder and chief executive officer at Dhonor Healthtech which uses blockchain and artificial intelligence (AI) to track donated organs and prescriptions has faced obstacles in dealing with the Middle East’s fragmented nature and various regulators.

“There are a couple of challenges,” says Merheby. “The talent pool – technical people are extremely expensive. We’re a startup but we’re not able to compete because our cost is very high. You don’t have universities that are graduating top talent. We’re having to outsource our development.”

 It would, according to Merheby, be cheaper and more sustainable to move abroad.

One Dubai startup already made the exodus. Medicus AI, which explains and interprets blood tests and medical reports to provide personalised health tips moved from its base in Dubai to Vienna after it received seed investment from European investors which was followed on by an ongoing Series A round worth $3 million led by a Germany-based investor. The company relocated to Vienna in 2016 where the startup ecosystem is more supportive of deep tech and scientific innovation.   

There is however a desire to enable deep tech innovation in the Middle East, particularly in the UAE. One of the exhibits at the Museum of the Future on show during the World Government Summit in February this year was a series depicting the evolution of healthcare technology. From robot surgeons performing procedures all the way to immortality, the potential for innovation in the healthcare sector was visible. Dubai is keen to position itself as a thought leader and an adapter of such technology, but it requires better access to talent, a more affordable living environment for startups and investors willing to take the risk before it can reach that stage.

March 16th 2019, 9:54 pm
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