BEIRUT: Launched in 2011 with the mission to foster a culture of high-impact entrepreneurship, Endeavor Lebanon marked eight years of growing support for Lebanese scale-ups in an annual Impact Report that showed strong growth numbers and partnerships.
Endeavor Lebanon’s Managing Director, Christina Chehade, told Annahar: “Scale-ups are companies led by high-impact entrepreneurs who dream big, build and grow innovative successful businesses. In the current economic context, they're the ones who have the capacity to transform the Lebanese economy by generating wealth and creating jobs.”
Chehade noted that recent studies have shown that these companies generate on average 1.6 times more jobs and revenues than traditional SMEs in the country.
“As they expand locally and internationally, their impact will go far beyond that. They will bring back knowledge and credibility, they will give-back, invest and inspire the youth and future generations of entrepreneurs, multiplying their impact and fueling the entire ecosystem,” she added.
In a country where unemployment has reached unprecedented rates and where local scale-ups face numerous challenges including lack of mentors, great exposure to risk, and limited access to smart capital, Endeavor Lebanon has succeeded in riding against the tide, identifying leaders of high-growth businesses and speeding their scale-up journeys by providing them with the skills and tools that enable them to generate wealth, create jobs, and reinvest in the entrepreneurial ecosystem.
To date, Endeavor Lebanon has supported 40 entrepreneurs, representing 31 Lebanese companies. Crossing borders, their high-impact efforts have managed to generate more than $260M in revenue in 2018, employing more than 2,300 people.
Annahar sat down with Chehade for an interview concerning Endeavor Lebanon’s report.
1) Your scale-ups go through a rigorous five-step selection process. What criteria do you use in selecting them?
At Endeavor, we support Scale-ups and look for several selection criteria: we look for companies that are scalable, innovative, and are at an inflection point, meaning they have reached a certain extent at which they need specific support to grow. We also look for companies with a proven business model. As for entrepreneurs, we look for those who can act as role models and are willing to give back to the next generation of entrepreneurs.
2) You have several events. One of them is the Women in High Impact Entrepreneurship (WIHE). How much of a role do women play in Endeavor?
We have a lot of women entrepreneurs that we support in our portfolio: Delphine Eddé, cofounder of Diwanee, Nadine Hachach-Haram, co-founder of Proximie, Rima El-Husseini and Rana Najjar, co-founders of Blessing, Hind Hobeika, cofounder of Instabeat, Maha Rifai cofounder of Beesline, Taline Assi, founder of Mosaic Marble and Nada Debs, founder of Studio Nada Debs.
In fact, we’re working on launching a program for women entrepreneurs on a global level, but I can’t reveal more details at this stage.
3) You have the Multiplier Map in your report which highlights the “influencer” companies, those that have the biggest influence on the network of companies in the ecosystem. What is the importance of this map?
One of our main aim at Endeavor is having entrepreneurs give back to the community once they grow, because this is how you create an ecosystem. The importance of the Multiplier Map is that it shows us that the most successful entrepreneurs are actually those who help and invest their time and money in the smaller startups; in other words, those who give back to the community. You have Anghami and Diwanee as the ones with the biggest impact on the ecosystem.
Regarding how we identified these influencers, we sent out questionnaires to almost all of the tech companies in the ecosystem and we asked them questions like: “Who mentored you? Who inspired you? Where did you work before?” And these types of questions create links between entrepreneurs. It should be noted that this map is a standardized Endeavor formula that takes place in all the countries we are present in.
4) You point out in your report to the merging of several companies like Diwanee’s merger with Uturn or ArabiaWeather’s merger with Raymetrics. How do such mergers affect the ecosystem?
These are local and regional mergers of companies from our portfolio. This shows the success these companies have achieved and their ambition to grow even further. For Diwanee, it shows the potential that you can develop a company in Lebanon, grow it, and merge with another company to create a regional player.
5) You mentioned that you have 170+ mentors in Lebanon. Do you train them? Most importantly, how do you convince someone to be a volunteer mentor and invest their time and energy in other companies?
The mentors that we have are high-profile people; they are CEOs and consultants, experienced leaders in their industries who have achieved so much. The reason why they want to mentor these entrepreneurs is to give back. Most of them can relate to entrepreneurs with similar challenges. They also learn from the entrepreneurs they mentor, so it’s a two-way relationship between the two.
6) Strategy&Middle East developed a scale-up readiness index to assess the state of the scale-up ecosystems and their needs for development in five countries in MENA. Lebanon ranked second after the UAE. What does this indicate?
It’s a positive sign. It means that we are ready to have scale-ups set up in Lebanon despite the tough economic situation. It's also less costly to set up an office in Lebanon than it is in other countries like the UAE. Yes, you have many challenges in Lebanon but you also have a lot of positive factors that would allow companies to set up [office] here.
7) What are the main barriers to access to capital for entrepreneurs?
The companies we deal with raise money from venture capitals, and as they grow, they need bigger rounds of funding which are not available in the country. This is why we need foreign investors who believe in our country and our companies in order to invest in them.
Thus, the main challenge is raising funds outside of Lebanon, even though many companies have done it. Basically, if you have a successful company with a successful regional product, your chance of finding investors is higher. The main barrier for entrepreneurs is that they need to scale to the region to show they have an exciting company and attract investors.
8) Where do you see the ecosystem in five years?
I see it growing despite the troubling economic situation. The Lebanese in general are entrepreneurial people and they’re going to continue building and growing businesses despite the fact that getting loans and funds will be more complicated. I think we Lebanese have it in us to be resilient, and if we continue on that path, the ecosystem will grow.
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