BEIRUT: In the midst of social, political and economic flux, a prosperous and sustainable MENA rests on the region’s ability to adapt to technological changes while fostering a vigorous entrepreneurship eco-system.
“New perspectives and models of collaboration to harness the wave of technological transformation will support a sustainable and prosperous future,” Ramy Matar, a Wharton MBA candidate told those gathered at the 8th Annual Wharton Middle East and North Africa Conference.
The conference, held at the Sofitel in Center City, Philadelphia over the weekend, brought together prominent business and industry leaders for a round of discussions, panels and keynote speeches to explore trends in entrepreneurship, innovation, investment, and policy-making.
Matar, acting as the conference’s co-chair, acknowledged that the region faces many challenges, from political and social unrest to an ever-changing economic landscape.
The key moving forward, however, lies in the region’s youth, which represents over 28 percent of the population with a pool of 108 million people aged between 15 and 29.
The largest number of young people to transition to adulthood in the region's history holds the key to driving sustainable development and inclusive growth in the region, Matar said.
Talented youth, coupled with a healthy and vibrant Venture Capital ecosystem, have the ability to propel the region to new heights. This much is evidenced in the $893 million raised by 366 entrepreneurs in 2018, capped off by the first unicorn exit after the sale of cab-hailing app Careem to Uber last month.
VC funding has made rounds in recent years, booming in the UAE, Egypt, and Lebanon, the top three transaction hubs respectively.
The UAE alone accounted for 70 percent of the amount invested in 2018, while Egypt saw its number of deals increase by seven percent to reign in 22 percent of transactions made. Lebanon, meanwhile, managed to retain its spot despite a four percent drop in transactions year on year.
One of the conference’s panels featured a number Venture Capital veterans who touched on the challenges and opportunities in the MENA region, including Henri Asseily, founder of leap ventures, and Ramy Adeeb, founder of 1984 Ventures.
The speakers touched on a number of challenges, from government interference to limited access to financing (HO)
Careem, who last month was sold for $3.1 billion, was pinpointed to showcase how far the regional tech ecosystem has come, while also shedding light on the most daunting challenge being faced by startups today: raising capital.
Zach Finkelstein, who once served as Careem’s VP of corporate development, argued that one of his former employer’s main assets was their ability to attract capital.
“People who are hesitant of stating companies in the region are worried about their ability to attract capital at a reasonable scale,” he said.
Another factor that comes into play is the nurturing of talent, which Careem succeeded in attracting and retaining from the top down while empowering its employees.
“There are a lot of nuances in terms of localized products and strong operational talent, but a lot of people who failed was because they couldn’t raise enough money.”
Yet there is still a long way to go to for the MENA ecosystem to attain the level of maturity of Europe and other parts of the world, with Asseily seemingly painting Careem as an exception to the rule due to the experience of its founders.
“You don’t become an entrepreneur overnight, but it takes a lot of time and effort,” he said, pointing to a steep learning curve that can only be climbed by working at other startups and mastering the art of storytelling.
“Its all about selling yourself and your company to investors, to potential employees, and that takes a lot of time,” he said.
Despite MENA still being in the early stages, Asseily expressed hope in the region becoming on the par with the rest of the tech and VC hubs.
“I am confident that this will work in MENA and we are starting to see flashes of maturity, expertise, and sharing of knowledge.”
Touching on the difficulties facing the Lebanese ecosystem, where his venture capital firm is based, Asseily laments the interference of politics and the “Lebanisation” of the process.
“This means that everybody has to be consensual and agree on everything and more importantly not to get on the bad side of anyone,” he said, which handicapped the development of the ecosystem despite the Central Bank’s efforts.
In 2013, the Central Bank launched a $400 million stimulus package for banks called Circular 331 to boost investment in startups, which resulted in the inception of 8 funds with an estimated $350 Million allocated and the funding of 50 startups.
Yet increased regulations, political bickering, and a cash strapped economy on the verge of collapse have stifled progress.
“Things have ground to a halt,” he said, reiterating the need to instill a learning and teaching process throughout the ecosystem, “from the regulators and the engineers all the way to the entrepreneurs.”
An-Nahar is not responsible for the comments that users post below. We kindly ask you to keep this space a clean and respectful forum for discussion.