The MENA region’s entrepreneurship ecosystem is growing in size and stature thanks to business accelerator schemes, alternative financing and an expanding community of angel investors and professional mentors.
In the Middle East and North Africa, according to a funding report by MAGNiTT, some 260 start-up deals were completed last year to the investment tune of 560 million dollars.
Women are underrepresented when it comes to new business launches and Elissa Freiha – founder of the first female-focused accelerator in the region, Womena – is passionate about pushing the numbers higher.
“Honestly, I think this region is the most exciting start-up space globally right now for the simple fact that the potential is still untapped,” she says. “The resources are there and they’re getting put into place.”
A major hurdle for many burgeoning businesses, however, is securing enough working capital to allow them to flourish in the first few years.
“I think this region makes it a lot harder than most to raise funding,” remarks Freiha, “Funding is definitely one of the most difficult and challenging parts of being a start-up founder but this region.”
In the four years since she started her business, Freiha has secured angel investment for more than 40 international start-ups – most of them within the tech space.
She estimates that her network of 400-strong high-net worth investors can on average expect to see a return of 10-100 times on their money within five to seven years.
“One of my favourite companies right now is called AlemHealth,” says Freiha. “It was actually our second investment as Womena and it’s a company that has a machine learning algorithm that helps individuals assess radiology scans better,
“It basically saves lives. It’s technology that’s really revolutionary that can help a lot of people and they’ve been operating in emerging markets like Afghanistan and Nigeria since we’ve invested in them.”
Freiha dovetails angel investing with mentoring budding CEO’s like Tunisian entrepreneur Amal Bahloul, who set up the company ‘Lights, Camera, Learn!’ three years ago.
Bahloul’s company runs workshops which educate Arab children – including many Syrian refugees - through the art of filmmaking. The children write, perform and produce English language short movies to help them connect with different cultures and share their own unique stories.
“Within a few months we’ve educated 179 kids, we’ve created twenty-four short films and we’ve done seven red carpet events in four different countries,” says Bahloul. “Hopefully, the non-profit message will attract the right kind of people to come and work with us.”
The business of blockchain: The digital revolution impacting the UAE
Whilst the idea of precisely what blockchain is might still be obscure to some, it hasn’t stopped hundreds of thousands of people from using it daily around the world.
What is blockhain?
The concept behind blockchain technology is that it automatically records an official and tamperproof account of digital transactions. That information is then accessible to the public. The technology cuts out the middle man, so that third-parties like banks or lawyers, don’t need to be paid to process or validate agreements.
Blockchain first emerged around ten years ago to protect digital cryptocurrencies like Bitcoin, and today it’s being used by companies in a wide range of sectors for other types of deal-flow.
Qlickhain UAE is an Abu Dhabi-based blockchain and Internet of Things (IOT) company that is using the technology to help tea farmers in India empower themselves and develop their businesses.
For example, an IOT device is planted in the soil where the farmer’s crops grow, to measure things from humidity and acidity to pesticide levels and to guarantee a truly organic product.
Blockchain then certifies this information, so that buyers can verify it for themselves online, as opposed to merely trusting a product’s label.
“The most important thing in blockchain is that the data cannot be corrupted,” says Qlickchain UAE’s director, Shaik Hamdan. “So once the data is there, it is there. No-one can edit it.”
Governments globally are jumping onboard with the use of this technology and the UAE plans to convert fifty percent of all its government transactions to blockchain, as part of its Strategy 2021. The programme is expected to result in cost savings of around three billion dollars US dollars and reduce annual labour time by 77 million hours.
The Abu Dhabi Securities Exchange (ADX) is the first stock market in the MENA region to adopt blockchain into its service, and just the third index to do so globally.
ADX announced its partnership with the UK financial technology firm EquiChain, with the goal of increasing the speed and security of capital market transactions, as the world economy continually evolves the way it does business.
Blockchain also threatens to disrupt the MENA region’s remittance industry and change the way that money is sent back home by the UAE’s millions of expatriates every month.
With blockchain certifying these transactions automatically, the fees commonly charged by bank intermediaries will completely disappear. Some experts forecast that this could one day render financial institutions unrecognizable.
“They have to change their business models,” says Amro Abdu, the founder of Market Trader Academy. “Otherwise, they’re going to be obsolete.”
Social eyes: spotting MENA’s young entrepreneurs
Mashal from Pakistan showcased her online media company called The Tempest, targeting ‘diverse millennial women’, at Sharjah’s Entrepreneurship Centre.
And Lebanese entrepreneur Jihad, the co-founder of the pre-loved shopping site Saily, stepped away from the office to hang out with one of his favourite philosophers Alain de Botton.