Issue no 14. Fall 2017
FOOD GLORIOUS FOOD The Many Shades Of Food Tech
THE FORCE OF AI Meet MENA’s AI Startups
LET’S TALK ABOUT ARABIC UX
Best Practices For Arabic UXD
MENA DIGITAL INVESTMENTS
Original Research From ArabNet And Dubai SME
MENA BUSINESS
REPORTS
OF THE HIGHEST CALIBER Thanks to a unique and exclusive access to the MENA market, ArabNet has developed studies and reports that bridge the knowledge gap within regional industries. The ArabNet Business Intelligence initiative produces reports that feature original data, fresh insights, consumer habits, digital trends and industry best practices. We produce tailor-made reports, with exclusive partners just like you!
Download our Reports Intel.arabnet.me
The Next Report can be Yours Intelligence@arabnet.me
LETTER FROM THE EDITOR
XIV The Quarterly is back after the summer break. I hope you all managed to take some time off and relax at some point. It’s been one busy summer in the tech sector to say the least. Have you managed to keep up with all the startup funding news? It feels like we have been announcing investment stories on our website on a daily basis! We’ve included some of the main stories in this issue, just in case you’ve missed out on them. I’m pretty sure that from the time this issue went to print and got to your hands, several more investment announcements were made, so make sure to subscribe to our digest to get weekly top stories in your inbox.
Rita Makhoul Managing Editor
@rampurple
Also during the summer, a large amount of articles from all across the globe have commented on the doom of artificial intelligence (AI) creating reverberations of worries. Many famous individuals who work in technology such as Elon Musk, Stephen Hawkins, and several others have echoed those fears. Is AI capable of taking over the world? What is the future of man and machines? Will AI become more intelligent than humans? In this issue, we studied the history of AI and explored how AI has impacted the automotive, health, education, and banking sectors. We also checked out all the emerging startups in the MENA region that have been utilizing AI. There’s a scene in the musical Oliver! in which the orphans belt out “oh food marvelous food, wonderful food, magical food, fabulous food, beautiful food, food glorious food.” Once you read our feature story in this issue on the digital transformation of the food industry in the region that explores the many shades of food tech, and maps out all the food tech startups, you will be singing “Food Glorious Food” as well – albeit for a different reason than those poor orphans did. It’s my wish that The Quarterly will become an essential part of your professional life, a resource that you depend on to keep up with the rapidly evolving world of digital technology. As always, I hope you enjoy this issue, and do let me know if there are any topics you would like to see covered in the future. Happy reading!
INDUSTRY STORIES
INDUSTRY STORIES Alabbar’s Ventures for Summer 2017
TECHNOLOGY 4
World Bank Invests $50M 6 in Jordan’s Innovative Startups Fund Delivery Hero Acquires Carriage
2
8
THE QUARTERLY Fall 2017
BUSINESS
Artificial Intelligence: A Force Disrupting Many Sectors
12
AI’s Impact on the Automotive Sector
13
When AI Meets Healthcare
14
AI Transforming the Future of Education
15
Banks Harnessing AI Tools
16
Who Are the MENA’s AI Startups? Prominent MENA AI Startups Up and Coming AI Startups in Lebanon.
18 19 22
CEO SERIES: HANI SAIF 24 CIO of eXtra Maya Hojeij interveiws Hani Saif to discuss eXtra’s move to ecommerce, the challenges they have faced, as well as the technology behind the platform and the vital role it plays. The Digital Transformation of the 28 Food Industry in MENA Food Delivery
30
Restaurant Tech
31
Chef/Catering Services
32
Food Subscription
32
Issue no 14, Fall 2017
DIGITAL MEDIA
ENTREPRENEURSHIP
How to Measure the Unseen: Digital Audio, Emotions, and Ad Effectiveness Research conducted by Choueri Group Data Team on insights to the impact of audio.
36
Let’s Talk About Arabic UX Design In this article, we underline the steps to creating a splendid Arabic UXD.
40
MEET THE TEAM
The State of Digital Investments in MENA (2013- 2016) Excerpts of the 2nd edition of the report conducted by Dubai SME and ArabNet that provides a comprehensive analysis of investors and investments in technology startups in the MENA.
44
10 MENA Startups to Keep On Your Radar In every issue, we bring you a list of startups from the MENA region to put on your radar.
52
Editor-in-Chief Omar Christidis
Managing Editor Rita Makhoul
Staff Writers Lynn El Bizri Nadine Kahaleh
Contributors Youmna Borghol Nicholas El Bizri
Design Marc Abdullah Mira Breish
Business Development Michael Aswad
FOR CONTRIBUTING Do you have any news to share? Send to news@arabnet.me Are you interested in contributing? Pitch your idea to: rita.makhoul@arabnet.me To advertise with us: michael.aswad@arabnet.me Tel: +961 1 658-444
Fall 2017 THE QUARTERLY
3
INDUSTRY STORIES
INDUSTRY NEWS
Alabbar’s Ventures for Summer 2017 Mohamed Alabbar, Founder and Chairman of Dubai’s Emaar, the developer of the world’s tallest tower the Burj Khalifa, has been on an acquisition spree this year. In May, Dubai’s Emaar Malls acquired a 51% stake in e-commerce fashion website Namshi from Global Fashion Group (GFG), a startup set up by Rocket Internet, for $151,M as competition for technology deals heats up in the Middle East. During the same month, Alabbar also announced that he had accquired a large stake in Middle East Venture Partners (MEVP) to create one of the leading venture capital investment platforms in the Middle East and North Africa (MENA) region. In September, following the strategic partnership, MEVP and Alabbar launched the Middle East Venture Fund III (MEVFIII) - with a target size of $250M. MEVFIII will invest in innovative early-stage and growth-stage tech companies in the MENA and Turkey region. The target fund size of $250M makes it one of the few independent regional venture capital funds capable of committing large investments to meet the growth requirements of tech companies in MENA and Turkey. The fund will offer long-term investors looking for tech exposure in the MENA and Turkey a diversified investment vehicle led by MEVP’s strong management team that has a proven track record. The international retail franchise operator M.H. Alshaya Co. acquired a strategic stake in Noon, the region’s new e-commerce platform, in September. Alshaya also revealed that it will become a seller on Noon’s marketplace platform, listing a portfolio of international brands covering the fashion, health & beauty and home & lifestyle categories. At the time of print, Noon had launched in the UAE offering an extensive range of international brands, covering categories that are popular among youth, families and children. It is set to launch in KSA in the coming weeks.
500 Startup Closes $15M Fund “500 Falcons” 500 Startups, an early-stage venture fund and seed accelerator, has closed a new $15M fund known as ‘500 Falcons’ in May, with a target of $30M. The fund will exclusively target early-stage startups in MENA, MENA diaspora founders, and non-MENA founders targeting MENA. Both the Oman Investment Fund, which has previously invested capital into 500 Startups’ main fund, and new entrant Qatar Science and Technology Park are serving as anchors for the new fund. Although the group has been investing in the MENA region since 2011, with 55 deals in 32 companies on its portfolio for a total of $6M, 500 Falcons is considered its first MENA focused fund. Furthermore, the group plans to invest in approximately 100-150 companies with about half of the fund and reserve the other half for follow-on investment in the top 20% of companies.
4
THE QUARTERLY Fall 2017
MEVP Invests in Wego Dubai-based VC firm MEVP invested in Wego, an online travel company in the Middle East, in exchange for equity ownership, in September. The announcement followed to MBC Group’s investment and strategic partnership with the company in July. Founded in 2005 in Singapore, Wego is currently dual-headquartered in Dubai and Singapore. It presents an unbiased comparison of all travel products and prices offered in the marketplace by merchants, both local and global, and enables shoppers to quickly find the best deal and place to book whether from an airline or hotel direct, or with a third party aggregator website. Wego records over 10M monthly visits by collaborating with over 700 local and global airlines, hotels, and online travel agents.
Paytabs Raises $20M
In August, Saudi Arabia’s fintech company PayTabs raised $20M in investment to support its plans for global expansion to 20 markets in the MENA region, Southeast Asia, India, Africa and Europe within the next two years, in August. The company also plans to invest in product development in areas such as digital payments, and engage in strategic acquisitions to boost its product and services portfolio. Moreover, the investment aims to create over 4000 direct and indirect job opportunities that will support global economic growth. The participants in the investment round were not disclosed. According to Abdulaziz F. Al Jouf, Founder and Chief Executive Officer of PayTabs, the company wants to provide secure and flexible financial solutions to small and medium enterprises, and large corporations to help them flourish and grow their revenue in multiples.
World Bank Invests $50M in Jordan’s Innovative Startups Fund The Jordanian Ministry of Planning and International Cooperation signed a $50M facilitated loan agreement with the World Bank (WB) to support the establishment of the Innovative Startups Fund, in August. The Central Bank of Jordan (CBJ) will also support the fund with $48M. The fund project will be implemented and operated by the Jordan Loan Guarantee Corporation. Innovative Startups Fund comes in line with Jordan 2025 vision and the recently adopted Jordan Economic Growth Plan 2018-2022. These blueprints seek to enhance economic growth by providing further support to innovative and entrepreneurial micro, small, and mediumsized enterprises (SMEs), that create jobs and contribute to the national economy. The fund will help potential entrepreneurs in further developing their business ideas, connecting them with business incubators, and providing venture capital to entrepreneurial small and medium sized businesses that prove their ability for sustainability and growth. It will also support 200 innovative business ideas across the country.
Fall 2017 THE QUARTERLY
5
INDUSTRY STORIES
NOW Money Raises $700K in Investment
Delivery Hero Acquires Carriage
UAE-based fintech startup NOW Money has raised $700K from two US-based VC firms, in August. The funds have been raised from Accion Venture Lab, the seed-stage investment initiative of financial inclusion firm Accion, and Newid Capital, two firms that are known to make investments that target the financially underserved. Over the past year and a half, the startup has secured partnerships with many local and private companies including Noor Bank, MasterCard, and various exchange houses across the region. In June, NOW Money competed against 9 finalists at Arabnet’s Startup Battle in Dubai, and claimed first place. It also came second place in ArabNet’s Championship in May. NOW Money also won other awards from competitions such as Pitch360, Get in the Ring, Chivas the Venture, IBM SmartCamp, and Women in STEM. In addition to that, NOW Money entered Central Bank of Bahrain’s (CBB) regulatory sandbox in September. In September 2015, under the tagline ‘empowering the unbanked’, former bankers Katherine Budd and Ian Dillion launched NOW Money with the goal of providing workers with financial inclusion via direct access to a current account, debit card, and low-cost remittance services directly from an app and service center. Through the startup’s partner bank, workers would be provided with accounts into which they would get paid every month, as well as a debit card they could use to withdraw money from an ATM or make online and in-store purchases.
In May, online food takeaway firm Delivery Hero agreed to buy Middle East food delivery platform Carriage, in a series of technology deals in the region for around $100 million. This is the highest IRR in the region to date. The acquisition came further to Carriage’s reception of a seed capital fund amounting $1.3M in January 2016 to kick-start the project. Delivery Hero currently operates in 53 countries internationally in Europe, Asia, Latin America, and the Middle East and partners with over 300M restaurants. What’s interesting to note is that Rocket Internet has invested $613M in Delivery Hero. Rocket Internet acquired Carriage’s main competitor, Talabat.com, in February 2015 for roughly $170M. Carriage is a food-delivery service in Kuwait that offers delivery from registered restaurants, many of which don’t usually deliver, with livetracking of orders. Carriage’s process is straightforward. Customers select their area, choose from a list of over 50 restaurants, and place their order. The order is then seen instantly by both the restaurant and the nearest available driver, who then heads to the restaurant to pick up the order and deliver it to the client. In the meantime, customers can track their order and view the estimated time of arrival. Customers can pay cash on delivery or online via credit cards, and Carriage earns one KD per order regardless of location or the order size/value. While Carriage entered a competitive market just 14 months ago, which includes Carriage’s main competitor, Talabat.com, Carriage is unique in that it acts as a link between restaurants and clients, and takes care of all logistic services. Carriage also does not have a ‘minimum-order’ policy and is one of the fastest food delivery services in Kuwait, with the average delivery taking an average of 45 minutes.
Iliad Partners Invests in Fetchr’s $41M Series B Round Dubai-based logistics startup Fetchr raised $41M in a series B round, in May. Iliad Partners were a major investor in the round, with a $2M investment. They joined a number of global and regional VCs who participated in the Series B round, which was led by Silicon Valleybased VC New Enterprise Associates (NEA), and includes Majid Al Futtaim Holding (MAF) and Nokia Growth Partners (NGP), among other investors. According to Iliad Partners, this investment round is one of the largest Series B rounds in MENA; it comes at a time of high growth and rapid change in the MENA ecommerce sector following the landmark acquisition of Souq.com by Amazon. Iliad Partners is stretching its arms to the emerging ecosystem of companies supporting digital commerce, where the firm sees an expanding range of promising opportunities. Within that context, the VC firm states that Fetchr is achieving high growth and scaling rapidly; it is solving a real problem in the last-mile delivery space in emerging markets via its innovative tech-enabled solution, driving faster, more accurate and efficient deliveries.
6
THE QUARTERLY Fall 2017
Fall 2017 THE QUARTERLY
7
INDUSTRY STORIES
Shedul.com Raises $6M in Series A Funding Round Dubai-based startup Shedul.com, a free booking platform for salons and spas, closed a $6M round of Series-A financing, in June. The round was led by Dubai-based Middle East Venture Partners (MEVP) and backed by Dubai’s BECO Capital and San Francisco-based Lumia Capital. The new round of funding follows an earlier seed round also lead by MEVP. Launched in 2015, the platform streamlines small and medium sized business operations with intuitive, free-to-use software. Shedul.com takes the hassle out of running a business by managing appointment bookings, point-of-sale, customer records, human resources, inventory, and financial reporting. In under two years, Shedul.com has quietly signed up a vast user base of over 40M merchants in more than 120 countries, most of whom learned about the platform by word of mouth. Over half of Shedul.com users are in the United States, followed by the United Kingdom, Canada, and Australia. Millions of bookings are made on the platform each month, and bookings are growing at an average rate of 35% month-on-month. The platform is well on track to process over $1BN worth of appointment bookings by the end of 2017.
Didi Chuxing Invests in Careem DiDi Chuxing, China’s largest mobile transportation platform, has invested in MENA’s Uber rival, Careem, in August. Both parties did not reveal the size of the investment. The startup will use the investment to share knowledge and resources about various topics, including intelligent transportation technology, products and operations, which falls under its vision of helping to accelerate mobility in the region, and sustaining innovation, and community engagement. The investment followed to the startup’s announcement of raising $150M, to close a $500M Series funding round in June 2017. DiDi Chuxing serves more than 400M users in 400 cities with over 20M rides per day, and is on a mission to build an open and sustainable global mobility ecosystem to advance transportation technology and product innovations. Careem is currently operating in 13 countries and 80 cities, with 250000 drivers and more than 10M users. The startups has launched its services in Palestine on June 15; it started with the city of Ramallah, with plans to expand to additional cities in the country. The startup has also partnered up with AirWayBill, the peer-to-peer shipping platform in June, and became its official transportation partner in the Middle East.
Modacruz Raises $2M in Series B Funding Round Modacruz, the mobile marketplace of second-hand women fashion items in Turkey raised $2M in a Series B investment round led by MENA VC firm, Middle East Venture Partners (MEVP), in June. Hummingbird and Nevzat Aydin also subscribed to the fundraising. The completion of the Series B investment round marks the third funding round by Modacruz, which was seeded by Aslanoba Capital in July 2014. The proceeds of the latest round will fund the next phase of user acquisition and further expansion of Modacruz in Turkey. The investment will also be used to grow the company’s over 3M listed items. Founded by Turkish entrepreneur Melis Guctas and backed by its shareholders, Modacruz quickly built a large customer base and inventory. In the last three years, Modacruz has grown its customer base to 1M women, sustaining an average order value of $30, which is two times higher than fashion e-commerce’s AOV in Turkey.
8
THE QUARTERLY Fall 2017
Fall 2017 THE QUARTERLY
9
INDUSTRY STORIES
Compareit4me.com Secures $3.5M Compareit4me.com, the comparison site, has raised $3.5M from its existing investors, including STC Ventures, Wamda Capital, Dubai Silicon Oasis Authority, and Saned Partners, in its latest phase of funding, in May. The majority of the new investment has come from existing investors STC Ventures, managed by Iris Capital, and Wamda Capital, which first backed compareit4me in the company’s Series A in 2015, with both doubling their investment in the business through this latest round of financing. The round also includes further investment from Dubai Silicon Oasis Authority and Saned Partners. To date, compareit4me has raised over $9M in total. The money raised is part of an initial closing ahead of a larger, Series B round of funding to be concluded in the coming months. It will be used to help the company expedite the growth of its fast-growing insurance business in the UAE and wider Middle East. Since launching the UAE’s first online car insurance comparison portal in March 2016, compareit4me’s insurance business has grown to selling $1.5M worth of insurance policies per month, with the company expecting that number to reach $5M per month by the end of 2017. As of April, compareit4me’s year-on-year growth in insurance policy sales reached 600%, making the company, by a considerable margin, the largest insurance aggregator in the UAE and one of the country’s top insurance distributors. And with sales five to seven times greater than those of its nearest competitor, over that same period, compareit4me has seen GMV (the total value of policies sold) growth of over 400%.
Numu Capital Invests in Mintrics Numu Capital, the Dubai-based VC seed fund, invested an undisclosed amount in Mintrics, the social video analytics dashboard, in June. Numu’s investment is geared towards supporting the Egyptian startup’s global expansion plans and further development of the technology. In addition to receiving an undisclosed seed fund in February, and an angel investment in June, Mintrics were also one of 72 applicants, out of 450 total, that were chosen to participate in a four-month Swiss program by Boston-based Accelerator program
MassChallenge that ended in September. Mintrics is a social video analytics tool that provides the science behind video content creation. The tool analyzes data and gives unique metrics, charts and benchmarks that explain how the video is doing, and then gives recommendations on how to improve. Tarek Nasr and Tarek Shalaby, who run a digital creative agency called ThePlanet in Cairo, launched the startup in February 2016, after they couldn’t find a tool to measure how their creative video content on Facebook was performing, as Facebook Insights was too basic and did not dig deep into the metrics. Today, Mintrics is the only tool that analyzes compares and benchmarks videos across Facebook and YouTube using users’ tokens and not Facebook API. Mintrics currently has three payment plans, each of which comes with a 15-day free trial, and users analyzing up to 10 videos can use Mintrics for free. Brands and content creators that have used Mintrics to analyze their videos include the likes of Buzzfeed, GoPro, LG, Disney, AJ+, Facebook, American Idol, and several others. Mintrics has been used to analyze 251,899 videos up to date, and has garnered 56,603,550,972 views so far.
10
THE QUARTERLY Fall 2017
Cairo Angels Invests in Egyptian Logistics Startup Bosta Cairo Angels, a global network of angel investors focused on supporting startups in Egypt, the Middle East, and Africa, invested in Bosta, a logistics startup based in Cairo. The Cairo Angels investment follows a previous investment by Dubai-based seed fund, Numu Capital. Founded by Y Combinator alumnus Mohamed Ezzat, the on-demand delivery platform allows customers to send, receive, and track deliveries at the push of a button. Already operating in Egypt, Bosta plans on using the investment to increase its product offering and to grow to other markets in the MENA region. On another note, the logistics industry is valued around $3B in the MENA region and is expected to double in the next 3 years after the entrance of big ecommerce players like Amazon in the region.
Souq.com Acquires Wing.ae
In September, Dubai-based ecommerce platform, Souq.com, acquired Dubai-based courier startup, Wing.ae. Founded by Muzaffar Karabaev in 2016, Wing.ae is an on-demand delivery and courier marketplace and first received funding from Souq.com in August 2016. The acquisition, which is Souq’s first since being bought by Amazon, will allow the ecommerce platform to provide innovative mobile and web-based delivery solutions for its customers and merchants and will also allow Wing.ae to continue investing in growing its same and next day delivery service in the region. Wing.ae’s fast-delivery network will potentially help Amazon build out its Prime business in the region. Prime is Amazon’s the subscription-based service that provides free and fast shipping to members on many different items, along with a bunch of other perks like music and video services. Amazon has already started selling a handful of Amazon-branded products through Souq.com as it moves to grab a larger share of the Middle East’s online shopping market.
Ibtikar Fund Announces a $2.5M Capital Increase
Ibtikar Fund, Palestine’s early stage venture capital fund, announced a $2.5M capital increase in June, welcoming the International Finance Corporation, the Dutch Good Growth Fund, and Reach Holding as investors. With this closing, Ibtikar (“Innovation” in Arabic) increased its capital to $10.45M, providing it with the ability to invest in more Palestinian startups over the next three years. This marks the first investment in Palestinian venture capital by the International Finance Corporation (IFC) and the Dutch Good Growth Fund (DGGF), active worldwide investors. For DGGF, this is the first venture capital investment in MENA, the second for the IFC under its new Startup Catalyst program. Launched in May 2016, Ibtikar has made 14 investments in Palestinian startups, a growing portfolio that has already been attractive to regional and global investors.
Fall 2017 THE QUARTERLY
11
TECHNOLOGY
ARTIFICIAL INTELLIGENCE: A FORCE DISRUPTING MANY SECTORS By Nadine Kahaleh | @91Kahaleh
1842 I Ada English mathematician and writer, Ada Lovelace wrote in her notes an algorithm to compute the Bernoulli numbers. This was considered the first computer program to create a programmable mechanical calculating machine.
12
1950 I Turing Test Named after English Mathematician Alan Turing, who published a paper on "Computing Machinery & Intelligence" asking the question "Can machines think?� The test is a method for determining whether or not a computer is capable of thinking like a human.
THE QUARTERLY Fall 2017
1956 I Dartmouth Conference Dartmouth mathematics professor, John McCarthy, organized the famous Dartmouth Conference in summer 1956, where he was the first to coin the term "Artificial Intelligence."
1961 I Unimate First industrial robot, called Unimate, goes to work at General Motors assembly line at the Inland Fisher Guide Plant in Ewing Township, New Jersey.
1965 I ELIZA Built by German-American computer scientist, Joseph Weizenbaum, ELIZA is the early natural language processing computer. Manufactured at the MIT Artificial Intelligence Laboratory, the computer was able to maintain dialogues with users as a Rogerian psychotherapist.
Several factors have impacted the proliferation at which the research and development of AI is progressing. The increase in computational resources, the explosive growth of data which stands at 48% year-on-year, based on Mary Meeker’s 2017 Internet Trends Report, along with the decreasing cost of data storage, and the surge of open source frameworks, in addition to the shift from broad AI to industry-focused AI, have enabled Machine Learning (ML) and Deep Learning to accelerate the evolvement of AI. Today, different stakeholders are betting on the capacities of AI in transforming the world as we know it. In fact, Global Forecast 2022 report expected the AI market to be worth $16 BN by 2022,
which will evidently increase the investments in the technology. AI is already on the track of empowering different sectors. In this article we will be underlining the main sectors where AI is already having or is projected to have the greatest impact: automotive, healthcare, education, and banking.
WHAT DOES AI STAND FOR? Known as the father of Artificial Intelligence, English mathematician John McCarthy, coined the term "Artificial Intelligence" in 1956 when he held the first academic conference on the subject. He presented his definition of the word at a conference on the campus of Dartmouth as such "the science and engineering of mak-
AI’S IMPACT ON THE AUTOMOTIVE SECTOR
Ever since AI made its way to the automotive sector, the industry has been transforming drastically, bringing about some of the most innovative auto tech features to date.
ing intelligent machines". A number of dictionaries define AI to be an area of computer science that emphasizes the creation of intelligent machines that work and react like humans. AI can rationalize and take actions that have the highest probability of achieving a specific goal. The technology bases itself on the idea that human intelligence can be mimicked by a machine that is wired using approaches from mathematics, computer science, linguistics, psychology, and more. It is important to mention that AI is not merely one technology; it is a group of correlated technologies including (1) natural language processing, that ensures a normal interaction between computers and humans, (2) ML, that allows computers to evolve once exposed to data, and (3) expert systems that are softwares programmed to provide advice.
AUTONOMOUS VEHICLES
With the release of a fully autonomous car inching its way to existence, it is important to point out the importance of AI technology in making such a feat come true.
Computer Vision AI provides vehicles with “computer vision” which enables vehicles to identify various objects, scenes, and activities in unconstrained environments. This feature operates upon a combination of cameras, radar sensors, and LIDAR units. The vehicle’s computing power, made up of complex ML algorithms makes up the vehicle’s AI. The
1968 I MacHack A computer chess program written by Richard D. Greenblatt, Mac Hack was developed at the Massachusetts Institute of Technology. Mac Hack defeated Ben Landy with a USCF rating of 1510 in game 3, tournament 2, of the Massachusetts State Championship.
1969 I Shakey Developed at the Artificial Intelligence Center of Stanford Research Institute, Shakey the robot was the first general-purpose mobile robot and was able to reason about its own actions. It combined robotics, computer vision, and natural language processing.
1970 I WABOT 1 Developed by Ichiro Kato in Waseda University, WABOT 1 is the world's first full scale anthropomorphic robot. It was able to communicate, measure distance and direction, and transport objects.
1984 I WABOT 2 Waseda University launched WABOT 2. The robot was able to talk, read musical scores with its eyes, and play an electronic organ.
1986 I Jabberwacky Created by British programmer Rollo Carpenter, chatterbot Jabberwacky was built to simulate natural human chat in an interesting, entertaining, and humorous manner.
Fall 2017 THE QUARTERLY
13
TECHNOLOGY
USEFUL APPS FOR TRANSPORTATION
ML algorithms are based on object tracking and sophisticated pattern recognition .applied to input from computer vision
INFOTAINMENT SYSTEMS
These systems include the most innovative in-vehicle features like speech recognition and virtual assistants.
Virtual Assistants The advancements in speech recognition have paved the way for in-vehicle virtual assistants. At first, drivers were very limited with what they could do with speech recognition technology, but today, virtual assistants allow drivers to ask for directions, get general information and even adjust their seating position and A/C settings. By learning driver preferences, habits, routines and even tracking the user’s location, route and destination, virtual assistants can make recommendations on-the-go. It can remind its users to pick up items on their way home, recommend restaurants in their area or even place their coffee order while they’re on their way to their local coffee shop.
A Round-Up of Taxi-Booking Apps for Residents in MENA
“Computer vision” constantly analyzes the environment and feeds perceived images into the algorithms. The images are then analyzed and the nature of the objects is classified through AI. These algorithms give the vehicle ‘intelligence’, allowing the vehicle to learn object characteristics such as movement, size and shape in order to classify future images with higher accuracy.
Connected Cars AI enables cars to communicate with one another and with the road infrastructure. By handling back-end computations, AI will deliver accurate and timely data, whereas ML algorithm will be tracking and registering data related to the vehicle’s speed, location, and destination. AI will learn the driver’s daily schedule, the roads they usually take, and their habitual stops to provide the driver with insights before their commute.
Speech Recognition Speech recognition provides an easier way for humans to interact with technology and in this case, providing the interaction between drivers and their cars. How does it work? AI interprets voices as sound waves that are converted into code which the algorithms then analyze. Further to that, the speech is compared to other samples stored in the cloud to determine what the user is saying. The speech recognition software will immediately start to update speech samples the more the driver uses it, taking into account how specific words are pronounced and the tone of the driver’s voice. The technology’s capability of learning a distinct accent and pronunciation of words also provides outstanding accuracy and precision. AI also helps speech recognition technology recognize speech context and tone.
WHEN AI MEETS HEALTHCARE
Integrating AI into the healthcare field is improving the clinician workflow and optimizing the clinical process. By doing so, AI algorithms are taking the load off doctors. However, it is absolutely positive that the role of AI in the field of medicine is not limited to the above. AI can go a long way in the healthcare sector, from assisting doctors in the OR to reducing waiting time in clinics, all the way to early on disease recognition.
1995 – ALICE The enhanced version of ELIZA.
14
1997 - Deep Blue Deep Blue, a chess playing computer from IBM (International Business Machines Corporation), defeated world chess champion Garry Kasparov.
THE QUARTERLY Fall 2017
1999 - AiBO Sony launched the first consumer robot pet dog named AiBO with skills and personality that can develop over time.
2002 – Roomba First mass produced autonomous robotic vacuum cleaner from iRobot, named Roomba. It learned to navigate and clean homes.
2011 – Siri Apple launched Siri, an intelligent personal assistant. It uses voice queries and a natural language user interface to answer questions, make recommendations, and perform actions. It caters to users' language and preferences.
AI HEALTHCARE ASSISTANTS
AI health bots are able to cover a vast number of outpatient services; they will ask you about your symptoms and provide you with the information you need to know about your medical condition by looking into the outcome of past treatments, as well as your personal medical history. AI assistants can also sustain continuous monitoring and care to the patients who require that sort of attention, like in the case of mental healthcare. Moreover, bots can also communicate with patients on behalf of doctors to follow up on their progress, and revert back to the doctors with the feedback and information related to the patient’s recovery journey by using Natural Language Generation and Processing (NLG/NLP) technologies.
PATTERN RECOGNITION
AI and ML are currently capable of understanding how the human DNA functions and impacts life. Systems such as Google’s Deep Mind and IBM’s Watson can digest immense amounts of data - like patient records, clinical notes, diagnostic images, treatment plans - and perform pattern recognition in a short span of time. By interpreting the human genome, ML can predict the molecular effects of genetic variation and identify patterns across millions of data points - a task that would take humans forever to do. ML algorithms can quickly scan a patient’s personal and family health records for similar patterns and come up with suggestions that can lead to an early detection, hence prevention, of a dangerous disease.
With this process being put into action, medicine could detect dangerous diseases such as cancer and Alzheimer’s through very faint symptoms, which increases the survival rate or treatment options of the patient.
DRUG DISCOVERY
According to tech crunch, new drugs usually take 12 to 14 years to be available for commercial use. However, with AI/ ML applications on deck, the process is accelerated. Computers can mine patient biological data to understand why people survive diseases and apply the results they found to improve current utilized therapies, or create new ones.
AI TRANSFORMING THE FUTURE OF EDUCATION
Contemporary learning methods are still cursed with being terribly static; they stand very far from engaging learners and crafting interactive educational methods. Today, AI can help decipher the micro-steps that students go through while being taught a certain subject, and process this data to better the educational experience. Other than automating menial tasks and saving teachers’ time, AI leverages softwares to adapt to students’ needs and cater to their learning pace; these softwares are divided into three categories: Intelligent Tutoring Systems, Intelligent Support for Collaborative Learning, and Intelligent Virtual Reality.
2011 WATSON IBM's question answering computer, named Watson, won first place on the television quiz show Jeopardy and collects $1M.
2014 - EUGENE Eugene Goostman, a chatbot passed the Turing Test, with one third of the judges believing it is human.
2014 – ALEXA Amazon launched Alexa, an intelligent personal assistant that is capable of voice interaction, music playback, setting alarms, providing real time information, and more.
2016 - TAY Tay was an artificial intelligent chatterbot released by Microsoft Corporation via twitter in 2016. The chatterbot posted offensive tweets, which forced the company to shut it down 16 hours after its launch.
2016 - AlphaGo Google's DeedMind’s AlphaGo defeated Go champion Lee Sedol.
Fall 2017 THE QUARTERLY
15
TECHNOLOGY
USEFUL APPS FOR TRANSPORTATION INTELLIGENT TUTORING INTELLIGENT VIRTUAL SYSTEMS A Round-Up (ITS) of Taxi-Booking REALITY Apps for Residents Simulating a one-to-one human tutoring experience, ITS leverage AI to deliver learning activities that cater to students’ cognitive needs; it provides targeted and timely feedback. Many ITS use machine learning techniques, selflearning algorithms that aggregate and analyze large data sets, along with neural networks; this combination allows the systems to decide on the type of content that should be delivered to the learner. On another note, the tutoring systems that are model based utilize a number of AI-Ed tools that tailor the learning experience to the student’s cognitive and affective states, allows them to discuss and question the subject being taught, and include open learner models that motivate the students by keeping them aware of their own progress, along with social simulation models that help the student understand the subject by understanding the culture and the social norms behind it.
Virtual Reality (VR) is all about simulated immersive experiences. It creates an environment where learners get the chance to explore, interact, and manipulate certain elements. They are therefore capable of using these virtual experiences in the real world. Today, students can explore a nuclear power plant, wander through the streets of Ancient Rome, or orbit around the outer planets. Coupled with AI, VR becomes intelligent and delivers an optimized virtual experience. It offers an environment that can interact or respond to the student’s reactions. Intelligent synthetic characters are incorporated to the virtual world; they can play roles in setting that can be dangerous or unpleasant to the student.
INTELLIGENT COLLABORATIVE LEARNING
Collaborative learning has proven itself to be a rather effective method of learning,
BANKS HARNESSING AI TOOLS
76% of worldwide banks will deploy AI interfaces as their primary point of interaction with customers within the three years to come, according to a survey conducted by Accenture. With AI in the picture, banks will not only revolutionize the customer relationship management, it will provide personalized recommendations of products based on their customer’s habits and needs, and will also offer personalized financial advice and portfolio management that caters to their subject’s financial plans. Banks will also be able to cut down on expenses related to basic customer service and back-office tasks, while optimizing their performance on both ends.
CHATBOTS
Also known as Smart Virtual Assistants (SVAs), Chatbots are artificially intelligent softwares that can maintain a conversation with a person; they’re automated chat systems that do not require any human intervention. By identifying the context and emotions exuded by their subject during a chat, they respond with the relevant and appropriate answer. Some chatbots are voice activated and other are text activated. By employing this smart tool, banks will redefine customer support. In fact, chatbots offer a wide array of benefits including 24/7 customer service, cost saving plans, penetration of millennials, and targeted content delivery.
16
THE QUARTERLY Fall 2017
as it engages learners and motivates
in MENA them. AI-Ed technology supports many collaborative approaches such as :
1. Adaptive group formation : Coupled with data about each learner in the classroom, AI’s goal is to design a grouping of students that share the similar cognitive level and interests. 2. Expert facilitation: AI techniques provide collaboration patterns that are used as an interactive support to the collaborating students. For example, Markov modeling, an approach using the probability theory to represent randomly changing systems, identifies collaborative problem-solving strategies. 3. Virtual agents: They can act as an expert a coach or a tutor, a virtual peer (fellow innovative student), or someone the students have to teach themselves. 4. Intelligent moderation: Using machine learning and shallow text processing techniques, they help the teacher in analyzing discussions all the way to reaching a productive collaboration.
Banks engage with their clients either via in-person conversations in a branch, or through telephone calls with sales or service representatives. Although this sort of interaction has proven to be extremely effective, it also presents itself to be costly. Chatbots can be very helpful on that level, as they maintain quick and high-quality customer service, while plummeting banks’ expenses. In addition to the above, banks can better connect with the millenials by incorporating AI into their systems. As they are considered the largest users of mobile messaging services, such as Facebook Messenger, WhatsApp, and Snapchat, banks will have a wide open window of interaction with this generation and will expand its client-base and conversion opportunities. Moreover, the use of AI promotes user-tailored content; further to aggregating data related to their subject’s habits and needs, bank bots will be enabled to prompt notifications about new products that are available and also send more personalized messages. On another note, banks leveraging voice enabled chatbots add an extra layer of biometric security for their customers. The bot will recognize its users’ voice and therefore allows them to access to their account balance, set up account related alerts, pay bills, and report a lost card, among many other functions.
ROBO-ADVISERS
Robo advisors are digital platforms that provide automated and algorithm-driven financial planning services, and require little to no human intervention. As any AI-focused system, robo-advisors collect information related to their clients’
financial situation and future goals, and then employs the aggregated data to offer advice and/or automatically invest client assets. Today, robo advisors are capable of performing sophisticated tasks, such as tax-loss harvesting, investment selection, and retirement planning, all at lower costs and greater investment outcome. According to Investopedia, client assets managed by robo-advisors is projected to surge to $2TN, after having reached $60BN in 2015’s Q4. Other than being an easily accessible tool that is available 24/7, robo-advisors offer a great advantage - they are low-cost alternatives to traditional advisors. By eliminating costs related to human labor, they can offer high-quality service at a fraction of the cost. In fact, most of these online platforms charge an annual flat fee of 0.2% to 0.5% of the client’s total account balance, that compares to a rate amounting to 1% to 2% charged by a .human financial planner However, despite its proven efficiency, the robo-advisor is still nascent technology. Although it has automated some functions related to asset allocations, portfolio management, and more, 40% of bank users would not be comfortable using this tool alone in the times of extreme market volatility, as stated by Investopedia and the Financial Planning Assosiaction’s recent study.
FRAUD DETECTION
By leveraging AI instruments, banks can identify and prevent fraud and security hacks in real time. If a customer is using a debit/credit card, the detection engine can score transactions within 0.3 seconds,
and then flag fraud or approve genuine transactions without any interruption of the purchase process. AI and ML technologies can crunch a massive number of transactions and flag any anomalies; they are able to learn from one instance, and therefore improve security. Some banks are also employing these technologies to payment providers, supporting security operations throughout the entirety of the payment ecosystem. These technologies’ algorithms can identify patterns in the data to recognize fraudulent claims, and by learning from each case, they can automatically assess the severity of damages and predict the repair costs based on historical data, sensors, and images. AI-driven tools can prevent false positives and provide a better detection in place, which enables fraud investigation teams free to perform tasks of higher value.
BACK-OFFICE TASKS
By allowing AI to the banks back-office operations, many labor-hours will be scratched off the employees’ task-list. AI technologies can review loan agreements, identify repayment patterns, and bring Robotic Process Automation to populate data entry and increase processing speed, specifically in the case of structured data. AI algorithms are set to be more precise given their exposure to great amounts of data. For instance, some banks are planning to include non-banking data in the loaning process, such as Amazon interactions, social media communications, and sensors in phones such as GPS and accelerometers, to therefore unearth new ways to determine the creditworthiness and provide the adequate financial help to their users.
Fall 2017 THE QUARTERLY
17
TECHNOLOGY
USEFUL APPS APPS FOR FOR TRANSPORTATION USEFUL TRANSPORTATION
WHO ARE THE MENA’S AI STARTUPS?
A Round-Up Round-Up of of Taxi-Booking Taxi-Booking Apps A Apps for for Residents Residents in in MENA MENA
18
THE QUARTERLY Fall 2017
Artificial Intelligence (AI) is still showing its first glimmers in our day-to-day life, even though it’s being heavily explored on the research and development level. In MENA, AI is meekly starting to spread its roots and the numbers say it all. According to Accenture’s 2017 Digital Consumer Survey, 76% of the users in UAE are comfortable with AI customer service, while the global rate registers 62%. Moreover, 66% of users in KSA and 65% of users in Qatar favor AI customer service, based on another survey by PwC. Today, the region is more open to AI than ever, despite all the questions that orbit around the technology. With Aramex launching Aramex Bot - an AI chatbot on Facebook- to offer details about the company, track shipments, and more, and Dubai developing a roadmap for AI, a lot of startups are emerging in the MENA with AI as their focal technology.
PROMINENT MENA AI STARTUPS that allow the users to give their bots a unique personality in order to smartly interact with the customers and maintain conversations through complex dialogs and interactions. Established by Mohamed Nabil, WideBot is A Bot Framework Creator. It allows any person to create, modify, and execute automated command-based bots. The framework provides a wide array of intelligent services; it includes AI modules
WideBot’s first product is Menu Maker - a bot builder for restaurants. It’s a dashboard that allows any restaurant to build its personal Facebook Chatbot without the need for any technical or coding-related experience. Menu Maker presents a full solution that simulates the food ordering process. The framework has a lot of features that help restaurants
to negotiate with sellers to land the best deal.
Founded by Tarek Kabrit, Seez operates in both Lebanon and Dubai. The mobile app helps users who are looking to purchase a car in choosing the one that suits their needs and budget the best. It gives buyers a full reach to every car available in the market and allows them
Seez aims to build a new type of search engine. It uses image recognition search to help users know the market value of a car. All they have to do is snap the picture of any car to get a full report of its specs and its fair market value, on the go. Seez also leverages AI predictive models who instantly check the fair price of any car. Moreover, Seez comes equipped with an AI chatbot that liaises between buyers and sellers. Named Cesar, the bot will ask the buyers about the car they want and
in enhancing their customer service and monitoring their business.
WideBot came in first place at ArabNet Startup Battle Cairo. Widebot was also named the local winner in Seedtsars Egypt competition in October, and secured its seat at Seedstars World’s Summit in Switzerland.
Country: Egypt Launched: 2016 Category: Chatbot
will look for it in the entire market. It will then contact the relevant sellers, negotiate with them to get the fairest price, and get back to the buyers with the fairest deal for both parties. The startup has received $1.8M in seed funding from B&Y, Phoenician, and Wamda capital in 2017. Seez considers all other car search sites to be a competitor; however, being equipped with image recognition technology and an AI chatbot, they have an edge. Country: Lebanon Launched: 2015 Category: Cars
Fall 2017 THE QUARTERLY
19
TECHNOLOGY
USEFUL APPS FOR TRANSPORTATION A Round-Up of Taxi-Booking technologies Apps to prepare for Residents students for the in MENA questions that suit their level. Qiyas test – a standardized exam for high school in KSA.
Founded by Mohamed Aldhalaan, Noon Edu is a personalized online social learning platform that allows its users to accommodate the learning experience according to their own potential and needs – based on the cognitive or affective state of the student. The platform combines gameification and adaptive learning
Co-founded by Guy Hood, Antonio Moratilla, Eugenio Fernandez, and David Llorente, Narrativa uses AI techniques to mine big data and generate new stories for its clients’ audience at machine scale. In other words, Narrativa’s technology takes complex data sets and transforms them into human narratives. Narrativa developed an AI product called GabrieleAI that allows companies
Founded by Matt Suiche, Comae is a cyber-security startup. It provides the necessary tools for digital forensics examiners and incident responders to successfully perform live system memory triage and analyze captured memory
20
THE QUARTERLY Fall 2017
In 2015, Noon Edu had launched Noon Game, a live online multiplayer game focusing on test preparations. The game offers an interactive environment for students to prepare for the test. By harnessing AI tools, the game helps the student in understanding where they stand exactly in the learning process, and, therefore engage them with practice
Noon had participated in ArabNet Riyadh Ideathon Competition in 2013 and came in third place. It was awarded a prize amounting $1K. It also came in first place in ArabNet’s Riyadh Startup Battle in 2015. Furthermore, Noon Edu ranked 14 on Forbes’ “50 Most Promising Saudi Startups 2016” list. Country: Saudi Arabia Launched: 2013 Category: Education
to generate millions of narratives per day. It helps corporations in the media, e-commerce and enterprise reporting space to exponentially increase the amount of content generated, significantly reduce costs, and develop new revenue streams. Using Natural Language Generation, GabrieleAI explains its knowledge in real time. The startup works with contextual data to enrich narratives and news stories, to help journalists focus on the real stories and leave the repetitive data-driven stories.
rule-based methodologies, while Narrativa employs natural language-generation AI that has the advantage of being learning system allowing customers to customize the technology.
What separates Narrativa from the large mainstream news organization, such as the Associated Press, The Washington Post, and many others, is that they use
Country: Abu Dhabi Launched: 2015 Category: Journalism
images to identify malware and threats.
Comae Technologies and Dubai Police signed a partnership to focus on AI-based memory forensics analysis solutions in 2016. The agreement goes beyond the 12week Dubai Future Accelerators’ program.
Comea offers intelligent cyber security which is an essential technology, using multiple resources. Comae correlates and analyzes threat data helping security teams identify risks that are relevant to their organization, enhancing vigilance through effective early detection and protection. Comae provides responsive capabilities to law enforcement and enterprises, helping them to investigate and to respond to cyber incidents and attacks.
In March 2016, Narrativa received a seed funding round for an amount of $143K from Flat6Labs Abu Dhabi and the Next Media Accelerator, and another seed funding of an undisclosed amount in August 2017 from twofour54.
Country: Dubai Launched: 2016 Category: Cyber security
Fall 2017 THE QUARTERLY
21
TECHNOLOGY
USEFUL APPS FOR TRANSPORTATION UP AND COMING STARTUPS IN LEBANON
A Round-Up of Taxi-Booking Apps for Residents in MENA
Lebanon has witnessed an increased activity in the AI sector; several startups have emerged from different accelerator programs, and some did or on their own. Here are some startups you should keep an eye on:
Co-founded by Ibrahim Ezzedine and Basel Jalaleddine, Cherpa an online platform that teaches robotics and electronics to youth - from building and coding projects, all the way to interacting with virtual missions. Accompanied by an intelligent chatbot that acts as a
virtual instructor and guides the learner throughout his/her entire journey, the student begins by selecting one of the many available projects (astronomy, medicine, agriculture, industrial, etc.) Further to the selection, the student is given an overview of the lesson with its learning objectives. The learning subject will then build and code the physical circuit. Once the intelligent chatbot validates that the circuit is error free, the student enters a virtual world with which the actual circuit interacts. For instance, if a student built a joystick, this production will be incorporated into a virtual space mission to Mars for NASA. Each completed mission unlocks a new lesson. In 2017, Cherpa has launched the coding a mobile application that allows users to choose a gift for their loved ones based on their lifestyle, personal preferences and interests, and delivers it to their recipient’s exact location. The application allows retailers to publish and advertise their products (targeting more than 70% of the retailers in Beirut).
Co-founded by Nehmat El Wazir and Majd Baltagi, Giftlivery plans to start in Lebanon and expand to the MENA. It’s
Founded by Samir El Zein in 2017, NEOTIC is a Beirut-based startup. A trading support platform, NEOTIC allows traders to test different trading strategies. By leveraging AI, it offers trading recommendations without writing
22
THE QUARTERLY Fall 2017
Giftlivery is equipped with an AI agent whose job is helping users in choosing the right gift. The agent harnesses Machine Learning algorithms to learn from the users’ actions, decisions, and feedback.
section for Beta testing, and converted 70 of their 100 test users to paying customers. It was amongst the 9 startups who graduated from Speed@BDD accelerator program, and qualified as semi-finalists in MITEF’s Pan Arab Competition. In March 2017, Cherpa received an undisclosed amount of seed funding from Speed@BDD. Cherpa also came out as one of the top 2 startups in the fourth cycle, and was selected for the LebNet Ignite acceleration and mentorship program in Silicon Valley. The startup is currently testing the platform with students. Country: Lebanon Launched: 2016 Category: Education
During its first year of operating, Giftlivery will use metadata to help users pick the right gift through related keywords search. It will also leverage Facebook Graph API which will record the activities, interests, skills, education background, and more information related to their customers from their Facebook account to then suggest the gift choice based upon this data. Country: Lebanon Launched: 2017 Category: Ecommerce
any line of code. Its AI technology is based on a Machine Learning algorithm that incorporates corporate fundamentals, prices through history, and financial news.
of the top 2 startups in the fourth cycle, and was selected for the LebNet Ignite acceleration and mentorship program in Silicon Valley.
The startup had closed a seed round of funding from 3 angel investors in March for an undisclosed amount. Furthermore, the startup was amongst the 9 startups who graduated from Speed@BDD accelerator program and received an undisclosed amount of seed funding on Demo Day. Neotic also came out as one
Neotic has revamped its whole user experience to optimize the onboarding of traders and refined its trading algorithm to include long and short hedging techniques simultaneously. It’s still at its BETA version. Country: Lebanon Launched: 2017 Category: Trading
Co-founded by Elie Matta, Elie Nahas, and Paul Barakat Diab, Augmental uses adaptive learning to provide a complementary online tool to class curriculums. It offers educators access to their students’ progress and therefore enables them to personalize the learning process according to their students’ cognitive and affective needs. The platform offers its services to digital native students. Augmental leverages AI algorithms that
rely on data to guide the learning path of the taught subject in real time. In addition to that, the startup increases courses interactivity by implementing the “study buddy” concept to the learning experience - a bot that maintains conversations with the students and the educators. The platform also harnesses Augmented Reality technologies and multilingual functionalities. Augmental differs from its competitors such as Knewton, Smart Sparrow, and Augment, by providing real-time recommendatiosn, as it redirects the student to a personalized path throughout the course.
Augmental is at MVP stage, and is currently working on its commercial version. The startup is testing its MVP at schools. Moreover, it has received sponsorship from the Antonine University and Multimedia Megastore to support the testing phase, and has gotten a $15K grant from Kafalat ISME.of code. Country: Lebanon Launched: 2016 Category: Education
Fall 2017 THE QUARTERLY
23
BUSINESS
CEO SERIES
HANI SAIF CIO of eXtra By Lynn El Bizri | @lnlne
24
THE QUARTERLY Fall 2017
P
roviding customers in Saudi Arabia with a complete shopping experience for electronics and home appliances, eXtra was established in 2003. Starting off with only brick-and-mortar stores, eXtra decided to set up the first ecommerce platform in 2011 led by CIO of eXtra, Hani Saif. Today, the company has over 12 million total shoppers, 12,000+ products, and 42 brick-and-mortar stores across the Kingdom as well as a store in Bahrain and Oman. During ArabNet Digital Summit 2017, Maya Hojeij, editor-in-chief and presenter from Dubai TV, sat down with Hani Saif to discuss eXtra’s move to ecommerce, the challenges they have faced, as well as the technology behind the platform and the vital role it plays. What did the move to ecommerce mean to the company in 2011? We opened our first brick-and-mortar store in 2003. From 2003 until 2010, we only had a website that was being used to check our catalog of items. In 2011, we believed that we should be pioneers and set up the first ecommerce website in the Kingdom so that customers could buy, sell, and return items online. eXtra’s strategy has always been to think ahead, and when we started our electronics store featuring the best buy model, it was the first store in the Kingdom to do so at the time. Have customers accepted the move to ecommerce? In 2011, we launched our ecommerce platform to complement our existing stores. During that year, the ecommerce website was not that successful given the problems in online payment and delivery in Saudi at the time. It’s completely different today, as we have advanced in several fields, despite the challenges that include peoples’ preference for cash payments, and Saudi’s secure financial system that does not easily allow for alternative payment methods. Between 2015 and 2016, our online revenue grew by 250% and by 150% in 2016 alone, which was proof that people were starting to embrace the idea of online shopping.
eXtra has around 42 stores in Saudi Arabia. If we are going to speak comparatively, what is the percentage of sales conducted online vs. at the brickand-mortar stores? Brick-and-mortar stores are the major drivers for retail in the region. Today, only 10% of our business is done online, however this percentage and the growth rate year over year is very encouraging. US online retail, for example, is only 15% of the whole retail market, and while in the MENA region we are only at 2%, this percentage is forecast to rapidly increase in the coming years.
“Moving forward, technologies such as VR, AI, mobile wearables, and IoT will allow brick-andmortar stores and online stores to work together seamlessly.”
number of visits, status of the customer, and customer service are all important data that help us to serve our customers better. Data collection requires a lot of investment as well as analytical tools and skilled labor, so big data is one of the key technologies we plan to adopt. How can data be used to improve customer service? You have to view touchpoints with the customer inside the store, outside the store, and even upon delivery, and every touchpoint must be reviewed to see how it can be made more efficient, productive and convenient. Moreover, we need to work with customers individually and not just as part of a group. Personalization is key, and this what we are trying to do online versus offline.
What are the key features or milestones that have helped eXtra to excel? One of our biggest advantages is that we are located in 26 cities in the Kingdom. We also substantially focus on customer service and convenience. For example, if a customer buys something online before 2pm, he or she can pick it up the same day, and if they buy any large electrical appliance we don’t charge them a delivery fee. We also recently introduced consumer financing, or installment payments, that we believe will improve customers’ shopping experience. So given the economic situation in the region, we constantly study ways to ensure our customers’ convenience and comfort while shopping at our stores. In your opinion, what do companies venturing into ecommerce need technologically in order to advance? From my perspective, it is important to utilize the data that we collect and that our customers have given us access to. For example, the shopping experience, habits,
Fall 2017 THE QUARTERLY
25
BUSINESS
USEFUL APPS FOR TRANSPORTATION What is your take on Amazon getting into MENA, given that eXtra is the number one ecommerce site in Saudi Arabia? I don’t believe Amazon is a risk or a threat, but rather an alert for every retailer in the region. Amazon wouldn’t be venturing into MENA unless they knew that the current retail market is ripe for disruption. It’s a great opportunity for big retailers like us to enhance our customer experience, delivery system, product portfolio, payment method, and all the features that Amazon has already invested in. However, I do believe it will be some time before Amazon enters our markets.
such as VR, AI, mobile wearables, and IoT
a technological perspective, and how did
online stores to work together seamlessly.
In the past, IT and technology were not viewed as priorities by the decision makers in the company. They believed that IT, just like any other department, should be operating independently with its own given tasks, requirements and reports. However, I personally believe that technology is one of the key components of a company and must be laid down at the right time. If we were late, we would have missed a great opportunity. I struggled to push the right technology early on and ensure the foundation was laid and invested in at the right time.
A Round-Up of Taxi-Booking will allow Apps brick-and-mortar for Residents stores and in MENA you overcome it?
Do you think all brick-and-mortar stores should close or should they be integrated with online stores, and if so, how? Should we cater to different ages as well? I believe we should focus on the consumer’s experience, whether online or offline, as well as at every touchpoint, it’s all about creating an integrated omnichannel experience. Customers aged 13-35 are comfortable with shopping online and prefer it, so we do need an online presence. In my opinion, if we rely solely on an online shop, we will not succeed, and the same applies for a brick-and-mortar store without any online strategies. Therefore, it’s no longer a choice for retailers to utilize one channel. Moreover, moving forward, technologies
26
THE QUARTERLY Fall 2017
“Startups need to know that venturing into ecommerce is a big investment that needs to be studied carefully and seriously. If the startup doesn’t know what it needs to do, they always can test their products and market using an existing marketplace.” What would be the biggest challenge that you have faced in your career, from
What is your advice for startups in ecommerce? From my experience, ecommerce cannot be underestimated, and is a complicated business, especially for startups. It is not merely about setting up a website, but an entire business department behind the scenes. Startups need to know that venturing into ecommerce is a big investment that needs to be studied carefully and seriously. If the startup doesn’t know what it needs to do, they can always test their products and market using an existing marketplace, which is cheaper and less risky. Once ready, they can then shift to their own online business. n
SAMIH DARWAZAH CENTER For Innovation Management & Entrepreneurship
ive cut n Exe catio Edu for
Ap
ps
e Na
sr, F O O
Hikma Injectibles
hi
s
T EA U D R C IE S H
bi
le
Mo
We provide in-depth company analysis for sustainable scale-up and growth through case studies
T N E M CEL & AC
Every Spring
Prizes
1st: $ 15,000 2nd: $ 5,000
M e n to r
We collaborate closely with the entrepreneurship ecosystem to mentor, accelerate and finance startups and SMEs.
Nada Debs
Fe e
db
dV
bs
an
I t e ra
ti o
lD
n
e
da
od
Na
B u sin e ss M
The Little Engineer
alid a ti o n
Bokja Home Deco
De
E li
ES C A S R ES &
Foo Mobile Applications Development
WHAT WE DO
When
k
ng
ze
ac
-ba s e Lear ni d
S INN TUD CONOV
P ri
O ER R IN AT G IO N
li c
io n
We organize an annual contest for innovative and entrepreneurial students
T EN ION AT ST TE
ED N T E TIO A
App
at
Cash
ent em nag Ma
We develop and deliver Entrepreneurship courses and programs
Entrepreneurship Practicum
c
tion ova Inn p| le-U Sca
S e ssio n s
P it
TAR EDU G C
g
ing
ng
th & ow | Gr ps rt-U Sta
En
ag
Who
open to students
esi
gn
www.aub.edu.lb/osb/darwazah @Darwazah_AUB
www.facebook.com/darwazahcenter
darwazah@aub.edu.lb
Fall 2017 THE QUARTERLY
27
BUSINESS
USEFUL APPS FOR TRANSPORTATION A Round-Up of Taxi-Booking Apps for Residents in MENA
THE DIGITAL TRANSFORMATION OF THE FOOD INDUSTRY IN MENA By Lynn El Bizri | @lnlne
By 2020, the food market is expected to reach $3.03TN in revenue, and grow at a 4.5% compound annual growth rate (CAGR), according to research firm Research and Markets. Food technology has been one of the key drivers of growth in the food industry, with startups using AR, AI, data analytics, and machine learning to transform the way we discover, eat, and order our food. Funding in food tech has climbed steadily over the past few years, skyrocketing in 2015 with 275 deals totaling over $5.7B, before dipping down in 2016, according to CB Insights. Regionally, investment in food tech is increasing, with over $18M in funding in the past 3 years, spread across more than 12 deals, including undisclosed investments.
28
THE QUARTERLY Fall 2017
Food Tech Investments in MENA (2012-2017) Not including acquisitions $6M
Worldwide, food delivery startups dominate the food sector, having raised $8B in 2015/2016, and $5.3B in 2017 alone. In MENA, food delivery startups have secured 33% of total funding into the food tech sector in the past five years, and six regional food delivery startups Carriage, 24h.ae, ifood. jo, Otlob, Talabat, and Hunger Station were acquired by key global players.
$5M $4M $3M $2M $1M $0M
However, although funding in food tech startups is increasing,
many startups still struggle to bring their products and services to market, despite the food sector being one of the fast growing sectors in the region. To tackle this problem, Kuwait-based Savour, MENA’s first food accelerator, was launched earlier this year to help food startups scale their businesses. The accelerator, which will fund up to $165K per team, will also provide startups with access to a coworking space and a network of mentors for guidance.
Subsidized
May, 2012 Jan, 2013
Feb, 2015
Feb, 2015 May, 2017
Dec, 2016
Oct, 2015
Aug, 2016
Nov, 2014
May, 2015
May, 2011
Food Delivery Acquisitions
Acquired
Founded
MENA
International Fall 2017 THE QUARTERLY
29
BUSINESS
USEFUL APPS FOR TRANSPORTATION
THE MANY SHADES OF FOOD TECH
A Round-Up of Taxi-Booking Apps for Residents in MENA
Apart from food delivery, startups in MENA are tackling other food tech categories such as restaurant tech, online chef/caterer hire, and food subscription. The following sections illustrate the diversity of the food tech categories and business models found within MENA and call attention to some of the most prominent players, key investments, and active markets. The 10 markets that have been included and analyzed are Lebanon, UAE, Saudi Arabia, Bahrain, Jordan, Qatar, Kuwait, Egypt, Morocco, and Oman.
FOOD DELIVERY
Food Delivery Startups by Country
101
5%
5%
5%
Food Delivery Startups
6
6%
Total Investments from 2015-2017
Mergers & Acquisitions
33%
8% Grocery Delivery
7% 12%
Grocery Delivery According to Nielsen’s Global Ecommerce and New Retail Survey, one-quarter of global respondents said that they are already ordering grocery products online for home delivery, and more than half said that they are willing to do so in the future. Moreover, the percent of respondents willing to use digital retailing options was highest in developing markets, particularly in MENA (58%). Among the different food delivery business models, grocery delivery startups are currently the most prominent and popular in MENA, with over 41 unique startups across 10 markets (almost 50% of all food delivery models). The convenience associated with ordering groceries online and having them delivered has led to a surge in grocery ecommerce solutions in the region over the past few years as well as an increase in consumers (particularly millennials) who prefer to do grocery shopping online. Grocery delivery startups in MENA have also attracted significant funding over the past few years. Leading players GoodSmart (Egypt), Knock Mart
30
Food Delivery Startups by Model
THE QUARTERLY Fall 2017
11%
(Egypt), InstaShop (UAE), El Grocer (UAE), and ToDoorstep (KSA) have collectively raised more than $4.4M in funding since 2015, and UAE-based El Grocer also acquired live ordering platform Quickshop.ae last year as part of its efforts to enhance its services.
Restaurant Delivery By providing customers with greater choices and convenience and reshaping the restaurant industry, restaurant delivery startups are disrupting the business of food delivery. According to data from CB insights, restaurants using online ordering have seen a 30% increase in revenue, and online food ordering is expected to increase by more than double to 58% over the next three years. Among the different food delivery models, restaurant delivery is the oldest in the region. Kuwait-based restaurant delivery service Talabat, which was acquired by Rocket Internet in 2015, was founded in 2004 and was the first of its kind in MENA. Today, the region is home to more than 38 unique restaurant delivery startups across 10 different
41%
Restaurant Delivery
38%
Meal Plan Delivery
Home-Cooked Food Delivery
15%
7%
markets, with over 14 startups in the UAE alone. Although funding in restaurant delivery startups has slowed both globally and in the region, M&A activity among restaurant delivery startups has seen a massive increase. In the past three years, the region has witnessed the acquisition of 6 restaurant delivery startups (24h. ae, Carriage, Talabat, Otlob, ifood.jo, FoodonClick, and Hunger Station) by Berlin tech giant Rocket Internet as well as Rocket Internet-backed companies Delivery Hero and Jumia Group.
Prepared-Meal Delivery Prepared meal delivery startups deliver pre-cooked meals to users, and differ from restaurant delivery startups in that they offer a few daily meal options that are usually prepared at a central kitchen managed by the startups themselves. Inspired by the clean cuisine trend, prepared meal delivery startups are among a new wave of companies that are looking to provide healthier options while remaining convenient and transparent about nutritional values.
While the prepared meal delivery model is still relatively new to MENA, it is gaining traction, and the region is currently home to around 15 unique startups across four markets, with the majority (11) based in the UAE. According to Nielsen’s ‘Global Health & Wellness Survey’, 83% of UAE respondents said that they are willingto pay more for healthy food, thus providing a niche for healthy food startups to flourish and grow.
Home-Cooked Meal Delivery Home-cooked food delivery startups connect home cooks with working professionals, creating opportunities for people at home to generate income by connecting them to consumers willing to pay for their healthy home-cooked meals. Unlike other food delivery rivals, these startups crowdsource the cooking process, and prioritize the home-cooked quality of food over the convenience of delivery.
While still relatively new to MENA, the home-cooked meal delivery model is catching on, especially in Egypt where 3 of the 6 home-cooked meal delivery startups are based. Cairo-based startup Mumm is currently the leading player in the sector, after having secured a $200K investment from 500 startups, its second round of investment since launching in 2015.
Food Delivery Startups by Country
Food Delivery Startups by Model
RESTAURANT TECH
15 Restaurant Tech Startups
7%
3% 17%
9.8 Total Investments from 2012-2017
14% 10% 7% 7%
Restaurant Guides
9%
10%
Reservation Platforms
6%
17%
Food Discovery Platforms Over the last few years, food discovery platform startups, which allow consumers to discover restaurants, dishes and, cuisines, have become consumers’ go-to for deciding where to eat out at or order in from. Offering a combination of restaurant data with menus as well as basic information like location, opening hours, and more, these startups not only target consumers but also restaurants looking to market their products. The MENA region is currently home to 9 food discovery platforms spread across all 10 markets. While Zomato is indisputably the leader when it comes to restaurant search and discovery, regional players are starting to make their way into the spotlight. Round Menu, a restaurant discovery platform, received an investment
of $730K shortly after being launched in the UAE in 2012 and has since expanded to 7 other markets. ElMenus, an Egyptian-based food discovery platform, also recently raised $1.5M in Series A funding, and boasts over one million monthly users. Reservation Platforms Reservation platform startups, which allow consumers to browse restaurants, book specific tables for specified dates and times, and view offers and promotions, are using technology to modernize the reservations process. Aiming to tackle and resolve the pain point associated with the inconvenience of booking a table, these startups not only help diners make last mi-nute reservations, but also help restaurants manage and boost their businesses and
promote their events. Although a hot sector, the online reservation business is nearly 20 years old – global restaurant reservation leader OpenTable launched in 1998 and the majority of MENA’s reservation platforms have been around for a couple of years. Out of the 7 reservation platform startups in the region, ReserveOut, launched in 2012, and Eat, launched in 2015, lead the sector. Jordan-based ReserveOut currently functions in 6 markets and has raised $5.4M in funding to date, and Bahrain based Eat functions in 4 markets and has raised $2.2M in funding to date.
Fall 2017 THE QUARTERLY
31
BUSINESS
USEFUL APPS FOR TRANSPORTATION
CHEF/CATERING SERVICES
A Round-Up of Taxi-BookingChef/Caterer Apps for in MENA Chef/Caterer Online Services by Model OnlineResidents Services
3 Chef/Catering Services Startups
2.5
40%
40%
Total Investments from 2016-2017 Chef hiring Platform
9%
Catering Marketplace
6%
20%
On-Demand Chef Hire On-demand chef hire startups, also known as the ‘Uber or AirBnB for Chefs’ are revolutionizing the act of dining out by providing consumers with a new option - bringing the restaurant to their home through the hire of private chefs. By connecting chefs with food lovers online, these startups aim to make fine dining more accessible for the masses. Although still a relatively new sector, the region is already home to two on-demand chef hire startups ChefXChange and BiBayti. While both startups allow consumers to search for,
discover, and book private chefs to cook at their homes, ChefXChange’s services also include private cooking classes and catering. In additon, ChefXChange currently covers 5 MENA markets, with Dubai being the largest, and has raised $2.5M in funding to date. Online Catering While still a relatively new model to the food tech space, both worldwide and regionally, online catering startups, which allow users to discover and book catering online, are growing in number and popularity. Similar to on-demand chef startups, online catering startups also aim to ‘bring the restaurant to the
home’ yet at a larger scale. Kuwait-based online catering startup BilBayt is currently the first and only startup of its kind in the region. Launched in 2015, BilBayt allows users to order catering from the caterer or restaurant of their choice, based on when and where they want their food delivered. Since launching, the startup has expanded to the UAE, and currently has over 10,000 monthly users and more than 100 restaurants and caterers on board.
FOOD SUBSCRIPTION Chef/Caterer Online Services by Model
Food Subscription Boxes
12
9%
Food Subscription Startups
9%
0
Total Investments to date
32
THE QUARTERLY Fall 2017
9% 73%
Specialty Food
Meal Kits
6%
6%
Meal Kits Meal kits, another relatively recent food tech model, capitalize on consumers’ demands for fast and easy meals by sending them recipes and pre-packaged, pre-measured fresh ingredients for meals they can cook at home. Advertised as a healthy and economical alternative to pre-prepared food and restaurant takeout, meal kit startups operate somewhere between a restaurant, grocery store, and delivery service, with most being subscription-based. With meal kit startups garnering attention from both consumers and investors worldwide, it comes as no
surprise that the MENA region is already home to six meal kit startups, four of which are based in the UAE, and two of which are based in Egypt and Kuwait. Nearly identical in service, the startups differ only in pricing and meal plan offerings, and mainly target health-conscious millennials and young couples/families. Food Subscription Boxes Subscription boxes are nothing new to the startup world. In the past few years, subscription boxes have been one of the fastest growing trends in the startup world, and are still gaining in popularity. One of the most popular
categories is food boxes, which unlike meal kits, tend to contain curated themed items hand-picked by the vendor. With healthier niche foods taking off in recent years, tailored food subscription boxes in MENA mainly cater to the region’s health-conscious residents and foodies, delivering everything from organic, ready-to-eat fruits and quality meats to healthy snacks and fitness supplements. Out of the 6 food subscription startups located in MENA, 5 are based in the UAE, and the region will most likely see more popping up in the near future.
THE FUTURE OF FOOD TECH STARTUPS Over the past few years, we have seen a greater integration of technology into the food experience –from food delivery in all its forms and cloud-based platforms connecting farmers with end consumers, to online chef hire and 3D food printing. However, the food industry is not only being transformed by entrepreneurs using food technology in innovative ways, but also by consumers, especially millennials, whose tastes and demand for technology are driving the food-startup scene. According to Goldman analysts, millennials, who care more for healthfulness, convenience and transparency than price, are expected to account for more than 75% of growth within the food vertical over the next decade. Moreover, millennials are spending more on food outside the home than any other generation, averaging $50.75 per week. Therefore, startups entering the food tech space should not only aim to compete with already established models, but rather focus on developing products and solutions that cater to consumers’ ever-changing appetites, health needs and lifestyle demands.
Fall 2017 THE QUARTERLY
33
BUSINESS
MENA Food Ecosystem
USEFUL APPS FOR TRANSPORTATION A Round-Up of Taxi-Booking Apps for Residents in MENA
ONLINE CATERING MARKETPLACE
Bil Bayt
RESTAURANT DELIVERY Amrak Carriage Click for Meal Cravez Deliveroo Doha Delivery Easy Food Lebanon Eat Clean Me Eat Easy Eat Now Foodate Food Fila FoodClub FoodonClick Hello Food Hunger Station Jibli Food Jumia Food Kanakol Lad Lugmety Lunch:On Maroc Resto Onlivery Otlob PapaOrder Qfoody Room Service Deliveries SpoonFed Talabat Talabet Online Toters UberEats Wafi Eats Wajabaty Yalla Eat Yumamia Zomato
34
THE QUARTERLY Fall 2017
RESERVATION PLATFORMS 360 Food Court Best Restaurants Maroc Dine Out Bahrain El Menus Foodiva Round Menu Tripocco Wajabaty Zomato
HOME-COOKED MEAL DELIVERY
AklaBaity Aklni Bilforon Mama's Apron Mathaqi Mumm
PREPARED MEAL DELIVERY Basiligo Bite Rite Chef Paul Crunch Doha Daintree Detox Delight Home Chef Laptop Lunch Love Food Pura Powwer Jars Rite Bite Smith St Paleo Theo's Point Yumamia
ON-DEMAND CHEF HIRE BiBayti ChefxChange GROCERY DELIVERY
FOOD DISCOVERY PLATFORMS 360 Food Court Best Restaurants Maroc Dine Out Bahrain El Menus Foodiva Round Menu Tripocco Wajabaty Zomato
MEAL KITS Cook - a - Box Dinner Time Hello Chef Live Freshr Easy Pan PantryBee FOOD SUBSCRIPTION BOXES FarmBox FitBox Arabia Fruitful Day MunchBox Martin's Meats Snack-in-a-Box
Allo Epicerie Amrak Awfar Market Baqaala Baqala Blue Passion Careeb Cozmo Jo Dakakyn E- Baqala Early Bird El Grocer Fakahany Fresh Culture FulfilMe Get Baqala GoodSmart Gourmet Egypt Gourmet ME Gourmet Shelf Healthy Shop Kuwait Insta Shop Kart On Khodarji Khodarji & More Knock Mart Live Freshr Maachla Market Plus My Market Nana Direct Online Food Grocery Plotos Qshop Quality Food Saveco Secrets Fine Food Soil Store Sokhrati Sunny Online Store To Doorstep Wafi Apps
Fall 2017 THE QUARTERLY
35
DIGITAL MEDIA
USEFUL APPS FOR TRANSPORTATION A Round-Up of Taxi-Booking Apps for Residents in MENA DIGITAL AUDIO, EMOTIONS, AND AD EFFECTIVENESS By Youmna Borghol | @yborghol
Accessing Is The New Owning
Over the past years, we have witnessed the rise of the access economy, where consumers pay for access, not for ownership. By providing consumers with convenient and cost-efficient access to resources without the hassle of ownership, many mature industries have been disrupted. Uber, Airbnb, and Kickstarter are some examples of access economy companies that are transforming the automotive, hotels, and financial services industries. Media is another industry where we are seeing access-based distribution models changing the media landscape. Spotify, Pandora, YouTube, Netflix and other streaming media services are obvious examples. One of the first industries to
36
THE QUARTERLY Fall 2017
be transformed by the access economy is music. The effect was massive on the audio landscape, as consumers shifted habits. Time spent on music apps has grown 79% in the last year and the global revenue from music subscription and streaming platforms has grown by more than 60%. Music streaming is changing the way that the world is listening to music.
typical cross-platform user averaging 81 minutes of listening per day. Looking at the consumption behavior throughout the day on Anghami vs traditional broadcast Radio, we notice that while radio listening activity over-indexes in the morning, Anghami listening builds steadily throughout the day, peaking in the afternoon and early evening. The MENA audiences are using digital audio in their everyday moments.
Streaming Has Gone Mainstream In MENA There is a major shift in the way audio streamers are listening in MENA. Anghami, the only digital audio platform in the region, is reaching around 25% of the online MENA population monthly. The MENA audience is always on and highly tuned in, with the
At this point, few would argue that streaming is mainstream in MENA. However, there are some interesting details in the data. 1. MENA is leading globally Saudi Arabian audio listeners are dominant in the global market; KSA has
the highest share of time spent listening to digital audio at 24%, compared to the US at 15%. Moreover, KSA has a significant streaming reach of 51% of the online population, the global comparison is lower at 37%. 2. Mobile is driving the huge streaming media opportunity 90% of music streamers are listening on mobile, compared to 72% of mobile consumption in MENA. The growth of mobile and audio is related because you don’t have to stop and watch audio; audio is everywhere, in your pocket, wherever you are going, on the move. 3. Anghami is built on MENA’s love of free audio streaming. Ad-supported audio streaming will continue to be Anghami’s most popular product. As of September 2017, 80% use the service for free and are, therefore, exposed to the platform’s ads. Spotify stands at 70% and Pandora at 60%.
The Only Way Is Up
The love of free music streaming and the media opportunity created are behind the huge success achieved so far by the music streaming industry. It definitely had an impact on the time users spend on radio’s former listening monopoly. There is potential for growth, and what is exciting about the numbers is the growth trajectories. New users are joining the trend every day and existing users are now listening to even more music. MENA users have increased at a significant rate; a 61% increase from 2016, up to 53 million in 2017. Not only is the number of users increasing but also the time spent listening. Time spent increased 64% up to 81 minutes in 2017. The other main thing to remember is the makeup of that audience, as many of the people streaming music are harder to reach. 23% of Anghami users in KSA do not listen to radio, which results in an incremental reach of 12%. The new audio landscape is a reality, and advertisers need to adapt to the new world order for audio. The opportunity to connect with a hard-to-reach demographic through digital audio platforms means that advertisers can now reach everyone through audio platforms combined.
Marketers Expect To Increase The Investments In Digital Audio Ads
In a recent Choueiri Group survey on the future of digital audio ads in MENA; it was shown that marketers today spend less than 5% of their digital budget on audio platforms, 69% expect to increase their investment in digital audio ads and currently, 77% of their budget is spent on digital campaigns. MENA audiences have started to embrace audio streaming for a few years now, but the adoption of digital audio advertising may be in the crawl stages. The main digital audio challenges for MENA marketers are understanding the impact of digital audio advertising and knowing how to plug it into the marketing mix as it doesn’t fall neatly into either the traditional or the digital camp.
Why Every Marketer Needs a Digital Audio Strategy
channel. Broadcast and digital audio very much complement each other, and if marketers are only concentrating on one of them, they may be missing out on the benefits they both bring to the table. We are observing the beginning of an evolving landscape. The opportunities are endless and exciting. Whether or not digital audio will displace audio in the future is not clear. But what’s clear is that the new audio landscape is evolving and it will keep evolving with the growing access economy. It’s time to shift the mentality away from thinking about defined silos like digital and radio, and start having a full audio conversation. As the world continues to go mobile and embrace streaming, the brands that know how to take advantage of these platforms, how to be part of the moments when people are listening and watching, are the ones ready to win the future.
The benefits of digital audio advertising extend beyond reach. Audio has a distinct power to build long-lasting emotional connections with consumers, a power augmented by digital technology that is making audio advertising precise, measurable and relevant. To quantify the impact that music listening has on brands and create global benchmarks for the region, a Brand Impact study conducted by DMS, Anghami and Nielsen, analyzed multiple campaigns, across sectors and markets. Results show that audio ads are 3x as likely to lift purchase intent than display ads, 2x as likely to lift brand awareness, and 2x as likely to lift brand favorability. Digital audio streamers are also twice as likely as non-streamers to advocate for and feel emotionally connected to brands, and twice as likely to have rational associations with the brands. In general, regardless of brand or sector, streamers are more likely to allocate positive attributes to brands compared to non-streamers. Research results also indicated that when brands add digital audio ads to an existing broadcast campaign, the average purchase intent increases by 11%. The results are aligned with global findings, confirming that audio is no longer one unified
Youmna Borghol, PhD Head of Data, Choueiri Group, UAE Youmna Borghol is a passionate media, data, advertising, and technology executive with balance of strategic thinking and leadership with operational experience across the advertising industry. She has over 10 years of business experience with a solid background in data and marketing analytics and a PhD in social media analytics. Youmna started her career at National ICT Australia as a Data Scientist specialising in data, analytics and predictive models for social media. She then moved to Mediacom Australia as the Director of Business Science, focusing on data-driven marketing and communications strategies to solve real business objectives for advertisers. In present, she heads the Data department at Choueiri Group where she oversees all aspects of the data team and data-related product solutions on both the buy and sell sides.
Fall 2017 THE QUARTERLY
37
DIGITAL MEDIA
MARKETERS EXPECT TO INCREASE THE INVESTMENTS IN DIGITAL AUDIO ADS MAIN REASONS FOR NOT INVESTING OF THE NON-INVESTORS
Not clear on the impact on brand metrics
62%
OF MARKETERS INVEST IN DIGITAL AUDIO FOR THEIR BRANDS
44%
87%
Not clear on the best practices for planning digital audio
44%
INTENT TO INVEST IN DIGITAL AUDIO IN THE FUTURE
Don’t have the reach which is brand key objective
25%
Not clear if it fits with a media mix plan
25%
Brand don’t want to be associated with music
6%
INCREASING DIGITAL AUDIO BUDGET
DIGITAL AUDIO BUDGET LESS THAN 5%
OUT OF DIGITAL BUDGET 77%
DIGITAL AUDIO SPENDS COMPARED TO LAST YEAR 44%
YES 5%-10% YES10%-15%
11%
YES 15%-20%
6%
YES MORE THAN 20%
6% 28%
NO REMAINED CONSTANT NO DECREASED
YES INCREASED
DIGITAL AUDIO CAMPAIGNS PLANNING
79%
77%
OF MARKETERS MENTIONED THAT AUDIO BUDGET COMES FROM DIGITAL ONE
NO DIDN’T INCREASE
6%
Previously
5%
SHARE OF DIGITAL AUDIO BUDGET OF THE TOTAL MEDIA BUDGET
Today
BRAND IMPACT IS WHAT MARKETERS ARE EXPECTING FROM DIGITAL AUDIO PLATFORMS
75%
94% 56% 44% 16%
Part of a digital mix
19%
Part of a radio mix
MEANS OF BUYING DIGITAL AUDIO TODAY
Performance
Brand Impact
Brand Association
BRANDS STILL NOT TAKING ADVANTAGE OF MUSIC STREAMING PLATFORMS 81% recommend creative type to their clients
Today
Future intention
81%
81%
73%
38% 81% Direct
38
THE QUARTERLY Fall 2017
Programmatic
USE UNTAILORED CREATIVES
STREAMING HAS GONE MAINSTREAM IN MENA MENA AUDIENCE IS ALWAYS ON Radio
Anghami
81
53M “USERS”
MINS “TIME SPENT”
STREAMING REACH
AROUND 25% OF MENA ONLINE POPOULATION
1:00
0:00
23:00
22:00
21:00
20:00
19:00
18:00
17:00
16:00
14:00
15:00
13:00
12:00
11:00
9:00
10:00
8:00
7:00
6:00
5:00
4:00
3:00
MENA 2017
MENA 2017 67% INCREASE SINCE 2014
SHARE OF DIGITAL AUDIO TIME SPENT
'of the online population' 61% 51% 41%
37%
GLOBAL
SW
KSA
US
GB
35%
AU
11%
AU
JP
UK
64%
53 Mn
GROWTH YoY“TIME SPENT” MENA
AVG. TIME SPENT PER DAY: 81 MIN
2014
2015
2016
11% 7%
HARD TO READ AUDIENCE
USER BASE GROWTH
2013
15%
US
THE ONLY WAY IS UP
2012
24%
KSA
37%
10%
21% OF ANGHAMI USERS DON’T LISTEN TO RADIO SAUDI ARABIA
INCREMENTAL REACH SAUDI ARABIA
2017
253% GROWTH “USERS” MENA SINCE 2012
THE IMPACT
X2
X3
More likely to lift More likely to lift BRAND AWARENESS PURCHASE INTENT than any digital campaign than any digital campaign
EMOTIONAL CONNECTION
X3 More likely to lift BRAND FAVORABILITY than any digital campaign
2X
More likely to feel EMOTIONALY CONNECTED with the brand
RATIONAL ASSOCIATION
1.7X
More likely to have RATIONAL ASSOCIATION with the brand
Fall 2017 THE QUARTERLY
39
DIGITAL MEDIA DIGITAL MEDIA
USEFUL APPS FOR TRANSPORTATION USEFUL APPS FOR TRANSPORTATION A Round-Up of Taxi-Booking Apps for Residents in MENA
Let’s Talk About Arabic UX Design
A Round-Up of Taxi-Booking Apps for Residents in MENA By Nadine Kahaleh | @91Kahaleh
ف
ض
ز
ا ث
Arabic UX design is a buzz phrase that bears no difference in its core principals than standard UX design. It refers to the design of a specific experience, tailored to a specific crowd – in this case, the Arabs. Yet, whomever the userthe is, user UXDis,shouldn’t Arabs. Yet, whomever UXD lose its Human-Centric glow. shouldn’t lose its Human-Centric glow. Deciphering the general guidelines of Deciphering Arabic UXD the hasgeneral becomeguidelines imperativeofto Arabic UXD become imperative to any Arab UX has Designer. any Arab UX Designer. Why? We’ll start off with some numbers from the Arabian Gazette: from the Arabian Gazette:
42 40
ب
THE QUARTERLY Fall 2017 THE QUARTERLY Fall 2017
• • •
60% %60 of Arabic speakers prefer browsing internet content in Arabic. Arabic is the 7th most popular language on the web, and the 4th most popular on a global scale. Less than 1% %1 of the digital content is in Arabic language.
Based on the aforementioned numbers, the Arab online community finds itself hungry for more quality content in Arabic to satisfy the growing need of the 141M
و
ح
ض
users. Hence, the demand for savvy Arab UX Designers is on the rise. Similar to every UXD project, Arabic UXD follows specific mental models in its workflow, as well. However, before making any assumptions, you need to be aware of the differences that mark Arab users’ interactions with online products – in other words, their user experience. In this article, we’ll be underlining the steps to creating a splendid Arabic UXD.
Ara bic Ty pe fa c
rch ea
Arabic User Experience Elements
es Valu ture Cul
Translati ons & Usa bili ty
S al gu n i til ul
e
M
Left Layout Right to
Don’t Get Lost In Translation
Adopting a direct translation strategy for your Arabic website/app can engender usability fails. English is a very concise and straightforward language; whilst Arabic tend to be more verbose. Some English words or expressions don’t have a direct Arabic translation, and end up being described in long sentences. This can be problematic, if the designer is limited to a screen real estate such as button copy or mobile interfaces. Copywriters have to know their way around the language, and have to steer clear from word-to-word translation, and focus on capturing the essence of the message. This resonates well with how users read online copy – they want things quick, they want things now.
Adopt A Multilingual Approach Even if we’re talking about the Arabic user experience, that doesn’t cast away the multilingual feature and its usability purposes. Most Arabs prefer surfing the web and browsing websites in Arabic language; however, including both Arabic and English will make your design more affordable and task-bound. A valid example in that context is ecommerce websites. For instance - your users are searching for a phone called LG G4 Stylus. Imagine having to type that in Arabic. Another valid example is software language that users are only familiar with in English. Don’t test your audience’s patience on that end and keep things familiar.
Understand The Arabs’ Culture If you’re running for elections, you’re in it for the win. Same goes for UXD. Let’s draw the parallel here. You want to
win the elections, you have to advertise a political agenda that resonates with the citizens’ needs. Same logic applies to UXD; you want to convert, you have to design an experience that resonates with your users’ culture. In other words, you want to be loved by the people, you gotta please them.
Culture In Dialect The variation in culture travels beyond visuals towards dialect. The Arabic people speak in a diversity of dialects. The question is, if one wants to create a website or an app that appeals to all Arabic speakers, how would one accommodate that?
Culture In Pictures If you want your visual elements to be aligned with Arabic culture, it doesn’t mean that you should infuse your design with pictures of camels, deserts, palm trees, etc. It’s fairly simple, use visuals that are appropriate and compatible with the Arab world’s social norms.
By using what’s referred to as “Modern Standard Arabic” (MSA) or Classical Arabic aka Fusha, the problem should be solved. The majority of Arabs are familiar with this dialect, as they have studied it in schools and know how to read and write it.
More on the matter - give the users visuals they can relate to. For example, if you’re targeting males in Saudi Arabia, you can use the visual of man wearing the traditional thawb. Of course, your choice also depends on the context of your product. Whatever you do, don’t fall into the stereotyping snake pit.
But if you decide on using Fusha, note that this dialect is only used in formal means of communication. So, if you’re looking for an interactive voice tone for your brand, Fusha might not be your best pick. That is why you will have to research the dialect that fits your product’s character the best.
Fall 2017 THE QUARTERLY
41
DIGITAL MEDIA
Take Up The Left To Right Layout
The main difference between Right To Left (RTL) layout and Left To Right (LTR) layout is the direction in which the content of your interface is displayed. When the interface switches from one direction to another, the process is called mirroring. RTL layout is the mirror image of an LTR layout; in other words all visual elements should be mirrored – texts, images, graphics, numbers, etc. The concept of mirroring, in this context, expands to the user behavior. However, that doesn’t imply that the Arabic UX designer is obliged to mirror every single element on the interface. One can break the rules without bending them. Let’s take logos and icons as an example - if your user has gotten used to a certain alignment of visual elements, then hardcore mirroring shouldn’t be implemented. Remember, users favor recognition over recall, which means that familiar design pays off better.
On another note, users scan the elements on your interface in two ways - either diagonally, or in an F shape. One thing is certain, they will work their way from the top down. Make sure that the information’s hierarchy of your interface flatters that behavior. In conclusion, the mirroring process depends in its majority on your user’s expectation of information flow. Think affordability, think familiarity.
I Like Big Fonts & I Cannot Lie!
Off to the greatest challenge in Arabic UXD – Arabic Typeface. As it represents a key factor in the usability of the interface, the UX designer has to be very intricate when it comes down to making the typeface choice. The hurdle here is the following: Arabic
42
THE QUARTERLY Fall 2017
characters are shorter and wider than Latin characters, and they also take up a lot of horizontal space as they are not readable if used in the same format of English letters. So, in order to achieve legibility, the Arabic type should be 4 points larger than the English type. This implies that your Arabic UXD should take into account the necessary space requirements for the Arabic copy.
Keep This In Mind
There is no monolithic way to create Arabic UXD. Testing and iterating should always be placed on a pedestal, as it is your gateway to the final answers; it’s the mean to fully understand how your users interact with your designs and what they really want out of them.
Fall 2017 THE QUARTERLY
43
ENTREPRENEURSHIP
USEFUL APPS FOR TRANSPORTATION THE STATE
OF DIGITAL INVESTMENTS IN
A Round-Up of Taxi-Booking Apps for Residents in MENA
MENA (2013-2016)
MENA witnessed a record year in technology startup funding in 2016: more than 30 new investment institutions launched, and more than $900M was invested in 2016 alone, more than the value of all investments between 2013-2015 combined (approximately $750 million)! The UAE remains the region’s tech startup hub, capturing the largest number of deals and almost all of the growth capital - a whopping 90% of total dollars invested. Ecommerce still dominates the investment landscape, especially for growth-stage deals, but new areas of significant interest are emerging, including health tech, fintech, and IoT / smart devices. Digital entrepreneurship and innovation remain focal points for government leaders across the region as they develop their economic strategies. We have seen the launch of many new initiatives to support this in the past year: the
44
THE QUARTERLY Fall 2017
establishment of the SME Authority in Saudi Arabia, the launch of the Dubai Future Accelerators in the UAE, and the announcement of $300M in government-backed funds in Oman (OTF and IDO) to name a few. In total, billions of dollars are being earmarked for programs to stimulate startup growth and investment. This second edition of our Investment Report, conducted in collaboration with Dubai SME, is the most comprehensive research on investors and investments in tech startups in MENA to date. It covers more than 150 funding institutions and 760 transactions that took place between 2013 and 2016, and actively analyzes year-on-year trends – from the distribution of investors by geography to the percentage of founders who are female. In addition, the ambition of this report is to help investors and policymakers’ measure identify the
strengths and gaps in their ecosystems and monitor the impact of their policies and programs. N.B: The report's findings are based on data collected from 75 investors and accelerators in the MENA region, specifically in the United Arab Emirates, Egypt, Lebanon, Jordan, Saudi Arabia, Morocco, Kuwait, Palestine, Algeria, Tunisia, and Bahrain. The report also aggregates information from publicly available data such as those listed on Crunchbase, CB Insights, AngelList, and Eureeca, among others. The report also collected data from startups through surveys and analyzes a total of 768 regional investments (all investments analyzed in the report are for equitybased investments only, and therefore institutions that provide grant/non-equity funding have not been included in the analysis).
GLOBAL INVESTMENTS IN STARTUPS GLOBAL VENTURE FINANCING TRENDS The year 2016 saw a substantial total venture capital investment of $127.4B globally, while worldwide venture capital activity declined by 24%, closing in on just 13,665 deals - suggesting some very large deals. While the value of investments appears relatively good in comparison to previous years - amounting to nearly double the total global VC investment seen in 2013 and only a 10% decrease in value of investments year-on-year, the major decline in the number of deals indicates a more complicated year for venture capital investment. The outlook for 2017 remains positive, however, with the announcement of new or expanded funds, including a $1.5 billion VR fund from HTC and a new AI-focused effort at Microsoft. 145
150
115
FIGURE 1: NUMBER OF INVESTORS BY YEAR The number of tech investors in MENA has been growing exponentially, with the ecosystem adding (on average) around 10 new funds per year between 2009-2012, accelerating to about 20 new funds per year in 2013-2014, and then jumping to about 30 new funds per year in the past two years (2015-2016). Of the 30 funding institutions founded in 2016, 40% of these funds are based out of the UAE; meanwhile, 6 funds have closed down in the period covered by the research.
83 65 44 30
1
1
4 3
4
2005
2006
2007
1 2004
Total Investors by Year
9
11
5
2
2008
2009
18
7 2010
32 12
14
2011
2012
Total Cumulative Investors - 2016
21
18
2013
2014
30
5 2015
2016 2017-YTD
Total Cumulative Investors - 2015
Investors by Geography in %
1%1% 2%1% 2%
UAE
2%
KSA Lebanon
3%
Egypt
4%
33%
5%
Tunisia Jordan Palestine
6%
Kuwait Bahrain Morocco
9%
Oman
18% 13%
Algeria Qatar Yemen
FIGURE 2: PERCENT NUMBER OF INVESTORS BY GEOGRAPHY The investor community continues to be heavily concentrated in a few countries, with the rest of the investors being scattered, a few each, across other markets. The UAE is home to about one third of all investors; Saudi Arabia and Lebanon combined account for another third; and all other countries together make up the remaining third of the investor pie. Lebanon has an exceptionally high number of funds for such a small country, driven by Circular 331 of the Central Bank of Lebanon; meanwhile, Egypt, one of the region’s largest markets, has a relatively low number of funds for such a populous country with so many startups.
Cumulative years: 2004 to 2016.
FIGURE 13: GENDER DISTRIBUTION AMONG FOUNDERS BY YEAR Gender distribution among startup founders has been relatively stable over the years ranging from 10% to 15%. Interesting, this past year broke from that pattern – female founders in MENA tech startups that raised funding in 2016 jumped to 26%demonstrating that the ecosystem is doing a better job attracting and supporting women founders.
Number of Total Female Founders Vs. Total Male Founders by Year in % Number of Total Female Founders Vs. Total Male Founders by Year in %
87%
90%
85%
74%
87%
90%
85%
74%
13%
10%
15%
26%
13%
10%
2013
2014
2015
15%
2016
2013
2014
2015
2016
26%
Female Founders by Year
Male Founders by Year
Female Founders by Year
Male Founders by Year
Fall 2017 THE QUARTERLY
45
ENTREPRENEURSHIP
INVESTMENTS IN MENA INVESTMENTS IN MENA AND BY MENA INVESTORS BY GEOGRAPHY
234
UAE Jordan
118
Egypt
101
Lebanon
100
KSA
94 39
Palestine Tunisia
29
Morocco
20
Bahrain
19
Algeria
5
Kuwait
4
FIGURE 4: NUMBER OF INVESTMENTS BY GEOGRAPHY When it comes to the number of deals per country over the past four years, the UAE (234) is far ahead of the pack, approximately double the next set of countries. The next set of countries is Jordan, Egypt, Lebanon, and Saudi Arabia, all hovering between 100 to 120 deals, roughly half the number of the UAE. Palestine, Tunisia, Morocco, and Bahrain come next, ranging from 20-40 deals each, about a third of the previous set of countries.
Syria 3 Oman
1
Qatar
1 Cumulative years: 2013, 2014, 2015, and 2016.
INVESTMENTS IN MENA BY YEAR FIGURE 5: NUMBER AND VALUE OF INVESTMENTS BY YEAR The total number of investments per year in MENA has remained level since 2014, hovering between 200 and 220 deals each year. This is surprising given that the number of investors has increased by 75% during that same time period. At the same time, the total dollars invested witnessed a 70% jump in value. This increase is mostly explained by two mega-rounds, raised by Careem and Souq.com: Careem raised $350M, while Souq.com raised $275 million.
$918
$379
$190
208
$247 201
218
141
2013
2014
Nbr of Investments
2015
2016
Value in Million
INVESTMENTS IN MENA BY STARTUP BUSINESS MODEL Number Deals Model Number of of Number Deals by by of Startup Startup Deals byBusiness Business Startup Business Model in in % % Model in %
5%
5%
14% 14% Transactional Transactional Transactional
38% 38%
Media
SaaS SaaS
SaaS
Technology Technology Technology
21% 21%
Agency Agency
23% 23%
Cumulative years: 2014, 2015, and 2016. Cumulative years: 2013, 2013, 2014,2013, 2015,2014, and 2015, 2016. and 2016. Cumulative years:
46
Media Media
THE QUARTERLY Fall 2017
Agency
FIGURE 9: PERCENT NUMBER OF INVESTMENTS BY STARTUP BUSINESS MODEL Examining the past four years of deals, transactional business models (38%) comprise the largest share. Next come media (advertising) and software as a service which encompass close to 50% of all deals by business model. The three aforementioned business models add up to 82% of all deals that took place regionally in the past four years.
Number of Investments by Startup Business Model in % Number of Investments by Startup Business Model in %
1% 1% 7% 7% 6% 6% 5% 5%
FIGURE 10: PERCENT VALUE OF INVESTMENTS BY STARTUP BUSINESS MODEL Diving deeper and analyzing by value of deals, transactional startups raised the bulk of investment dollars (81%), driven by the major rounds of Souq.com, Careem, and Jumia, while the agency business model (1%) received the smallest proportion. Technology, software as a service, and media business models have captured roughly similar proportions (5-7%) of all dollars invested over the years, among which Cequens, a technology business, raised the biggest round worth $53 million.
81% 81%
Cumulative years: 2013, 2014, 2015, and 2016. Cumulative years: 2013, 2014, 2015, and 2016.
FIGURE 8: PERCENT VALUE OF INVESTMENTS BY TICKET SIZE
Value of Investments in %
Early Stage
Venture Capital
Growth Capital
Although early stage deals are the biggest contributors to the number of deals conducted, they naturally contribute the least to the value of investments by ticket size. 2016 was a record year for growth stage deals, which captured 84% of all dollars invested – the highest share in the past 4 years, driven by Careems’ $350 million round and Souq.com’s $275 million round.
0.5% 1% 5.5%
2016
5%
4%
84%
2% 4%
2015
21%
11%
5%
57%
2%
1% 2014
3%
11%
4%
79%
1% 2013
4%
18%
Transactional Transactional Media Media SaaS SaaS Technology Technology Agency Agency
5%
$0K-$100K
72%
$100K-$500K
$500K-$2.5M
$2.5M-$4M
$4M-$7M
$7M+
INVESTORS IN MENA BY TICKET SIZE FIGURE 3: PERCENT NUMBER OF INVESTORS BY TICKET SIZE Approximately half of the investor communities are early stage investors: accelerators make up a quarter, and seed funds and angel networks split the other quarter roughly equally. At the same time, venture capital funds represent the single largest group of investors, and account for one-third (31%) of the community. For this report, corporate investors have been placed between venture capital and growth investors as they mostly tend to invest in the later stages/more developed products or businesses. The corporate investment space is attracting significant attention (globally and regionally), and is expected to continue to grow.
Investors by Ticket Investors Ticket Size % Size in % Investors byby Ticket Size in in %
9% 9% 10% 10%
9% 12% 12%
EARLY EARLYSTAGE STAGESTAGE EARLY Angel Network Angel Network Angel Network Seed Fund Seed Fund Seed Fund Accelerator AcceleratorAccelerator
12%
10% 14% 14%
14% Angel Network Angel Network Angel Network Seed Fund Seed Fund
Seed Fund
Accelerator Accelerator Accelerator Venture Capital Venture Capital Venture Capital
31% 31%
31%
23% 23%
23%
Corporate Corporate
Corporate
Growth Capital Growth Capital Growth Capital
Cumulative years: Cumulative years: 2004 2016.2004 to 2016. Cumulative years: 2004 to to 2016.
Fall 2017 THE QUARTERLY
47
ENTREPRENEURSHIP
INVESTMENTS IN MENA BY GEOGRAPHY Value of Investments in %
69%
42%
44% Careem Total UAE-2016 90 %
42%
34%
32% 19% 17%
15%
4% UAE
Souq.com
17%
JOR
EGY
LEB
4% KSA
UAE
JOR
2013
7% EGY
LEB
KSA
UAE
9%
3%
JOR
EGY
2014
13% LEB
6%
12%
2% 1%
6% 1%
KSA
UAE
JOR
LEB
EGY
2015
2016
INVESTMENTS IN MENA BY TICKET SIZE
KSA
FIGURE 6: PERCENT VALUE OF INVESTMENTS IN THE TOP 5 COUNTRIES When examining how the total dollars invested is distributed among the top 5 countries, the findings are skewed heavily by the few large deals that took place in each year.The figure shows that the UAE is capturing a larger and larger share of total dollars, driven by the fact that growth stage companies – and therefore deals – are increasingly based in Dubai. In 2016 this is stark – the Careem and Souq.com investments alone represented 78% of all dollars invested, which means that overall a whopping 90% of all dollars invested went into the UAE.
Number of Deals in % Early Stage
FIGURE 7: PERCENT NUMBER OF INVESTMENTS BY TICKET SIZE The research shows that, over the years, the distribution deals by ticket size are quite consistent (with 2014 being somewhat of an outlier). The majority of deals have remained in the early stage, representing around two-third of deals in the past four years.
2016
Venture Capital
Growth Capital 3.5%
42%
21.5%
22%
6%
5% 1.5%
2015
46%
20%
24%
4%
4.5%
1% 1.5% 2014
54%
25%
2.5%
16%
2% 2013
47%
21%
$0K-$100K
$100K-$500K
$500K-$2.5M
$2.5M-$4M
24%
$4M-$7M
6%
$7M+
Number of Deals in % Early Stage
Venture Capital
Growth Capital 3.5%
2016 42% 21.5% FEMALE FOUNDERS IN FUNDED STARTUPS
22%
6%
5% 1.5%
2015
Number of Startups Active Vs. Inactive in %
46%
20%
24%
4%
Number of Startups Active InactiveActive in % Vs. Inactive in % Number of Vs. Startups
1% 1.5% 2014
54%
25%
2%
15%
2013
Active Active Inactive Inactive
Active Inactive
85%
85% 85%
Cumulative years: 2013, 2014, 2015, and 2016.
Cumulative years: 2013, 2014, 2015, and 2016. Cumulative years: 2013, 2014, 2015, and 2016.
48
2.5%
16%
15%
15%
4.5%
THE QUARTERLY Fall 2017
47%
21%
24%
FIGURE 12: GENDER DISTRIBUTION AMONG FOUNDERS $0K-$100K $100K-$500K $500K-$2.5M $2.5M-$4M $4M-$7M $7M+ Last year’s Investment Report tackled the question of gender diversity in technology startups. Looking at the MENA region as a whole, not much has changed in terms of female representation. The previous analysis indicated that females represent 13% of all founders, while this year’s updated data demonstrates that female representation is 14% - roughly 1 in 6 - of all founders/cofounders of investor-backed businesses in MENA.
6%
VALLEY OF DEATH FIGURE 11: NUMBER OF OPERATING VS. CLOSE D FUNDED STARTUPS IN MENA BY GEOGRAPHY Although UAE has the highest number of inactive startups (22), it is also the country with the most number of operational startups (148). An interesting insight is that Lebanon stands as an exception with zero closed startups. This may be attributed to the surge in capital brought on by Circular 331, which allows startups better access to financing and giving them a longer lifeline. Egypt has one of the highest rates of closure for startups, and this could potentially be attributed to the decrease in capital in Egypt–demonstrated in the first part of this report.
148
100 63
74
65
24
22
21
14
12
UAE
Egypt
KSA
Jordan
7 Palestine
18
6
Tunisia
Inactive
2 Algeria
3
17
3
Morocco
10 2 Bahrain
Lebanon
Active
Cumulative years: 2013, 2014, 2015, and 2016.
Number of Startups Active Vs. Inactive
CORPORATE INVESTORS IN MENA 145
FIGURE 14: NUMBER OF INVESTORS VERSUS CORPORATE INVESTORS BY YEAR The corporate investor trend is not new to the MENA investment scene, however, the trend truly started picking up in 2012. Companies across sectors are launching investment initiatives, either through standalone funds or opportunistic investments. Today, corporate investors represent 18% of the surveyed investors. The main bulk of new corporate investors are located in the UAE and Lebanon. In Lebanon the latest corporate investors include banks (Almawarid Bank and Société Générale de Banque au Liban - SGBL); this was encouraged (again) by Circular 331, which supports investments by banks not only into VC funds but also into startups directly The UAE’s coporate investors are companies across broad sectors, such as du, Souq.com, Alabbar Enterprises, and DHx (Dubai Holding).
Corporate Investors by Geography in %
4%
4%
4% UAE
7%
Lebanon KSA
44%
Jordan Algeria Egypt
18.5%
Tunisia
150
115
83 65 44 30 1 1
1
4 3
4
9 5
11
2004
2005
2006
2007
2008
2009
2
Total Cumulative Corporate Investors
18 7 2010
12
14
2011
2012
New Investors by Year
21
2013
32
30
2015
2016
18 2014
5 2017
Total Cumulative Investors
FIGURE 15: PERCENT NUMBER OF CORPORATE INVESTORS BY GEOGRAPHY More than half (62%) of the region’s corporate investors are GCC-based, with UAE topping the list at 44% followed by Saudi Arabia at 18%. Lebanon, compared to last year’s data, has quickly caught up and is now standing at 18%, similar to Saudi Arabia. The majority of Lebanon’s corporate investors became active in 2016; whereas Saudi Arabia did not see new corporate investors becoming active in 2016. Dubai is quickly outpacing the MENA region in the establishment of new active corporate investors especially with the activation of four new corporate investors in 2016.
18.5%
Cumulative years: 2002 to 2016.
Fall 2017 THE QUARTERLY
49
ENTREPRENEURSHIP
THIS IS ONLY THE TIP OF
THE ICEBERG ...we go much deeper Your Events Did you know that ArabNet can bring the magic and energy of its conferences to your very own events? Our white label Event service is your one-stop-shop to engage face-to-face with your audience and create the best experience around your brand.
Business Intelligence We have been able to build one of the largest and most specialized databases of startups, executives and investors for the Middle Eastern market. We can offer tailor made business-matching events to help you meet your business objectives, in addition to annual reports on the digital industry.
50
THE QUARTERLY Fall 2017
Our Conferences and Media We're best known for our conferences in Riyadh, Beirut and Dubai, widely considered the top events for professionals and entrepreneurs in the digital sector, and our online news portal and magazine, which give you key insights into the trends driving the market.
Content From our brand new website, to our magazine and weekly digest, we can put at your disposal our extensive knowledge, network and expertise in the industry to create engaging content for your audience.
Simply call us today on +961 1 75 11 80/1/2 or email us on contactus@arabnet.me Fall 2017 THE QUARTERLY
51
ENTREPRENEURSHIP
10
MENA STARTUPS
to Keep on Your Radar By Lynn El Bizri | @lnlne In every issue, we bring you a list of startups from the MENA region to put on your radar. In this edition, we have picked a wide range of startups that include everything from a wellness app and on-demand childcare platform, to 3D-printed anatomical modeling, and a financial technology solution for the underserved.
52
THE QUARTERLY Fall 2017
an easy-to-follow points system and the traditional Arab kitchen.
Founded by nutritional specialist, Mas Watad, Dawsat started as a unique numerical system of classifying foods that has since evolved into a mobile application, website, magazine, YouTube channel and physical wellness centers. Created after Watad noticed that the region lacked its own specific nutritional guide to healthy eating, Dawsat is the first and only wellness program based on
Founded by Angela Solomon, Hassan Baylon and Stephanie D’Arc Taylor, Jaleesa is a Lebanon-based social impact business that connects busy parents with experienced, trusted, child carers. Their mission is to empower women to work in three ways: 1) by offering flexible, trusted childcare for a modern generation of mothers, 2) by recruiting child carers from all backgrounds in Lebanon, and 3) by subsidizing childcare for underprivileged families so more women can enter the workforce.
Tailored to the user’s age and gender in accordance with scientific research, the program is based on a daily points-quota system as well as weekly group support meetings. Using Watad’s numerical system, food and drink items are assigned a number based on their ingredients. Through the mobile app, users can keep track of their daily meals, Dawsat consumption and fitness activities. On the website, they can access success stories, recipes, articles about food, Dawsat news, and cooking videos by Watad herself. Dawsat’s business model consists of the online platforms, offline platforms, and
Parents can browse through the available sitters on Jaleesa website, message and meet them, and once they have chosen their sitter, can book any of the flexible hourly rates, bundles, or subscriptions. Sitters set their own rates depending on their qualifications and experience. All Jaleesa childcarers go through a four-step security and training process, including background checks and training in first aid, CPR, and child development. While Jaleesa is one of its kind in the region, global competitors with similar models do exist. In April, the startup was selected among 2,000 women-led startups from across
taken during a typical therapy session.
Founded by Ahmad Al-Kabbany, an assistant professor at the Arab Academy for Science and Technology, VRapeutic is an Egyptian research-based software startup using VR technology to develop therapeutic solutions for patients with autism. By collaborating with therapy centers in Alexandria and Doha, VRapeutic are creating content that supplements the classical approaches
VRapeutic have developed their prototype and are currently iterating on its design in collaboration with three therapy centers in Egypt and the Gulf region. In addition to one-size-fits-all VR content, the startup also offers customizable solutions that address the diverse personal needs of people on the autism spectrum. During the summer, the team behind VRapeutic sponsored the first AR/VR meet-up in Egypt, alongside AR social platform Augmania and IT service provider ITQAN. The event focused on issues such as social anxiety and how VR
the in-person methodology at the wellness centers and the cost varies according to the type of service offered. Today, Dawsat has 20 core employees, 65 wellness center leaders working in Palestine, Jordan, UAE and London, and 30,000 users on its mobile application. Watad and her team are currently looking to expand their services in MENA as well as Europe, and are in talks with potential investors to grow the startup, expand and move forward. Country: Palestine Launched: 2016 Category: Wellness
the region, and won second prize in the WeMENA final in Casablanca. Jaleesa’s participation in the competition was sponsored by Altcity’s Bootcamp, which Jaleesa graduated from in September 2016. In May 2017, Jaleesa secured a $40K equity-free contribution from the World Bank as part of a $200K seed round which will contribute to the further development of their high quality child care, and allow them to expand to other cities in MENA. Country: Lebanon Launched: 2016 Category: Childcare
can empower individuals to overcome social obstacles. VRapeutic’s future plans involve addressing other disorders and cases such as dyslexia, PTSD, physical therapy, pain management, addiction and elderly care. VRapeutic are expected to work side-by-side with and offer services through public and private hospitals, therapy and rehabilitation centers, and private clinics. Country: Egypt Launched: 2017 Category: Therapy
Fall 2017 THE QUARTERLY
53
ENTREPRENEURSHIP
their high performing tutors with top corporations looking for qualified interns.
Founded by Audrey Nakad, Synkers is a mobile application connecting students to highly qualified tutors on the spot, with the mission of enhancing students’ academic performance and preparing them for a brighter future. Synkers aims to follow the progress of students, assess their strengths and accompany them until they find a job, as well as connect
Founded by Mohamed Elawad, Medativ is a 3D printing medical solutions startup that was launched late 2015. Operating out of Boston, Massachusetts and Dubai, Medativ aims to improve patient outcomes and safety while reducing costs. Medativ create prosthetics as well as replicas of patients’ anatomy – also known as anatomical modeling. Using medical imaging technology such as CTEs and MRIs, they convert scans of the anatomy or specific organs into 3D models on a
Founded by Mohamed Ezzat, Bosta is an on-demand delivery platform with a B2C focus that allows businesses and individuals to send, receive and track packages less than 10 kg, in a time that does not exceed two hours, and with insurance up to 5000 EGP.
54
THE QUARTERLY Fall 2017
Using the mobile application, students can search for the course they need help with, pick a tutor based on their preferences, and directly book a tutoring session on the app. In order for tutors to be qualified, they must have a grade of 85+ on the material they would like to teach, and be interviewed by the Synkers team to assure they have the required communication skills. The application makes money by taking a commission on every booked session, and also offers a money back guarantee. Today, Synkers has 11 employees, is present in 10 universities, has over
600 verified tutors and is used by over 5000 students. The startup graduated from Speed@BDD in 2016 and has won several competitions including the Hyundai Start-Up Competition, the Femme Francophone competition, and the ArabNet Startup Battle in Beirut. In addition to the competitions, Synkers has also received a grant from Kafalat and is looking for funds that will be used to grow locally among schools and universities, and to penetrate the Dubai market later this year. Country: Lebanon Launched: 2016 Category: Education
computer, which are then printed. The 3D printed replicas are used for a variety of applications from determining optimal surgical entry points and trajectories, to choosing surgical screw size and placement. Patient-specific 3D models in particular increase efficiency and accuracy in the operating room, help physicians offer more personalized care, and reduce operating time, blood loss, and exposure to radiation. The models also give patients themselves a better understanding of their condition and the proposed procedures.
with Dubai’s Health Authority and gained local and international visibility and the chance to meet with strategic leaders and investors. Medativ went on to sign an agreement with the Dubai Health Authority to help implement their 3D printing strategy, and aim to set up a 3D printing facility to serve the needs of Dubai and the greater region. Moving forward, they plan to deliver new solutions to the region, grow their staff, and expand to other markets outside the UAE and into the wider GCC.
In September, Medativ were accepted to participate in Dubai Future Accelerators’ 12-week program, where they were given the opportunity to work directly
Country: Egypt Launched: 2015 Category: Homemade Food
For businesses to get started with Bosta, they simply need to fill in a signup form, and once verified can start using the services. Businesses receive access to a simple dashboard that will allow them to request, manage and track their deliveries. Moreover, they can communicate with the delivery person or ‘Star’ along the way at any point. Customers also receive a SMS with a tracking link to track their delivery.
global network of angel investors, and plan to use the investment to increase its product offering and expand across the MENA region starting with the UAE. Earlier in March, Bosta also received an undisclosed amount of funds from Dubai-based Numa Capital which they used to hire more people to handle operations, more delivery men to handle customers’ demands and intensify their marketing strategy.
The startup is currently working with more than 100 companies. In July, Bosta received funding from Cairo Angels, a
Country: Egypt Launched: 2016 Category: Delivery
Founded by Abdelrahman Elgamal, FriendyCar is the first marketplace for borrowing and lending cars in the Middle East, and is focused on facilitating the process of car sharing, decreasing the population of cars and providing anyone who doesn’t own a car with a convenient affordable solution. FriendyCar aims to switch the car owner status from someone who pays maintenance, insurance, and parking fees to someone who gets to share their car, make more money, and support their community and the environment, all while their car is completely covered by FriendyCar’s insurance partner.
Founded by Mehdi Khemiri, Favizone is a platform that allows e-merchants to fully exploit new technologies and the potential of big data. Favizon taps into customers’ past preferences and real-time behavior to deliver one-to-one recommendations to sellers across all channels, while also boosting a sellers’ e-commerce website performance. The aim is to match complex big data tools with a simple interface to help e-merchants improve their offers.
FriendyCar aim to shift the car ownership model from its current status to a ‘timeaccess’ model, allowing people to access any car anytime and anywhere in the world. Through the FriendyCar website, car owners can list their car for borrowing by filling in their car’s details and setting a daily price as well as any weekly or monthly discounts. After listing the car, the car owner can then control who gets to borrow the car, and check borrowers’ profiles, reviews and ratings before accepting or denying a request. Moreover, all car borrowers are screened and must get their accounts verified before they can request to borrow a car. One of the main advantages of FriendyCar over car rental services is the fee, which is 30-40% cheaper.
Earlier this year, FriendyCar came in second place at the Arabnet Startup Battle in Dubai and also claimed the first place prize at the Dubai Smartpreneur Competition in May. Although the startup is currently based in Dubai and targeting the Middle East region, it plans to expand to Eastern Europe and Southeast Asia as a next step. Although FriendyCar has no direct competitors in the region, international players with similar models do exist.
The service is easy to install, and gathers activity data of each of the customers of Favizone’s e-merchant clients. The clients are then given one-to-one recommendations by Favizone and can choose different actions to push their customers to buy, such as customized recommendations via channels such as e-shop, emails and messaging apps.
will help the startup to expand its business in Europe.
Although originally based in Tunisia, Favizone have since opened a subsidiary in the business hub Ill-de-France, which they found easier to expand to in terms of mobility and visas compared to the UAE or the US. The creation of the subsidiary should create about 20 jobs in 3 years and
patterns and derive as much value from the data as e-commerce counterparts.
Founded by Samy El Khoury, Vision in Motion offers an advanced softwarebased solution that allows brick-andmortar businesses to monitor, track and analyze their customers’ behavioral
The startup’s tech platform allows retail stores to monitor their customers using image processing and computer vision technology. By connecting to surveillance cameras and tracking people’s behavioral patterns as they shop, businesses can know how many consumers entered the store, what they are looking at, and how long they are staying in the store or a certain area.
Country: UAE Launched: 2016 Category: Automotive
In May, Favizone was declared the winner of the Tunisian leg of the Seedstars World global seed-stage startups competition and will represent Tunisia at both the Seedstars Global Summit in Switzerland next year and at the Regional Summit in Africa in Rwanda in December. Favizone is aiming to look for funding in France to accelerate Favizone’s growth. Country: Tunisia Launched: 2016 Category: E-Commerce
The dynamic heat maps generated by the startup’s technology and superimposed on actual pictures of the store also help to track their customers’ movements and trace their paths, making the technology more accurate and affordable compared to other similar solutions. In April 2016, Vision in Motion were part of Speed@BDD’s second batch of startups, and got the chance to travel to Silicon Valley and participate in the Blackbox Connect program. In 2017,
Fall 2017 THE QUARTERLY
55
ENTREPRENEURSHIP
the startup came first at ArabNet Beirut’s 2017 Startup Battle and were one of 5 startups selected for the final pitch round at the Startup Championship in Dubai. In September, they came first place in
Founded by Helm Egypt, an NGO that aims to promote full inclusion of disabled individuals, Entaleq is the interactive website and mobile app designed to allow people with disabilities to identify the places that are fitted to their needs. With the goal of driving economic and social progress, the Entaleq platform locates over 800 accessible places across Egypt, facilitating the movement of those with disabilities in Cairo.
56
THE QUARTERLY Fall 2017
SeedStars Beirut. Today, Vision in Motion is installed in over 40 locations across Lebanon, and plans to expand to the UAE and KSA in the coming two years.
Through the interactive and easy-to-use mobile application and website, disabled individuals can view and search for places with disabled access. Every place has a profile that includes an access guide with five categories: accessibility, bathroom, parking, braille menu, and sign language, and every category is ranked by its level of accessibility. Users can also find a detailed description of the accessibility features under each category, rank places, add comments/reviews, and recommend venues to become accessible. Venues themselves can also add their businesses to the website. Since launching, the startup has also succeeded in making hundreds of places
Country: Lebanon Launched: 2016 Category: Software
more accessible, with the help of trained assessors and architects following measures of the International Standards Organization (ISO) standards for accessibility. The project has attracted big companies such as PepsiCo, Al-Futtaim Group Estate, BMW, and Mall of Arabia, among many others, to come on board. Last year, Entaleq were awarded third place and 70.000 LE at Total’s Startupper of the Year 2016 Challenge, in recognition of their efforts to drive economic and social progress. Country: Egypt Launched: 2016 Category: Disability