ArabNet The Quarterly Issue 15 | Winter 2018 by ArabNet The Quarterly

THE STATE OF

VENTURE

CAPITAL Issue no 15. Winter 2017

IN THE MENA

Arabnet THE QUARTERLY Issue no 15. Winter 2017

ACQUISTION SPOTLIGHT: CARRIAGE

A Journey With Carriage

MENAâ&#x20AC;&#x2122;S FUNDING INSTITUTIONS All In One Map

KSA INNOVATION ECONOMY TECH STARTUPS

Research From ArabNet

THE STATE OF DIGITAL INVESTMENTS IN MENA 2013 -2016 REPORT

THE STATE OF DIGITAL INVESTMENTS IN MENA

In Partnership with ‫ﺑﺎﻟﺸﺮاﻛﺔ ﻣﻊ‬

2013-2016

Get a detailed overview of the equity-based investments being poured into the digital landscape in MENA. The report is the most comprehensive research on investors and investments in technology startups in MENA to date, featuring 150 institutional investors in startups and 760 transactions. Be up to date with year-on-year market trends, growth and arising opportunities.

LETTER FROM THE EDITOR

LESSONS FROM MY DEDIG While we were in the final stages of preparing this issue, my dedig (Armenian for grandfather) passed away. Although my dedig was 94 years old and I had been preparing myself for such a day, his passing hit me hard. You see, my grandpa is someone I considered myself close to and there’s no one in my life that I’ve respected or looked up to more. As a role model in my life, he had several qualities that I constantly strive to achieve. I’d like to share a few with you. Dedig was resilient. Every hardship life presented him with, he summoned his fortitude and self-determination, accepting life’s uncomfortable lessons and used them as stepping-stones. He constantly showed relentless tenacity and determination. Giving up was never an option.

Rita Makhoul Managing Editor

@rampurple

Dedig was highly persistent. Through self-discipline, very specific habits, and constant motivation - even through trying times - he kept going. To achieve the goals he set, he invested time, effort, and constant learning. He never was in a rush to see the results of his efforts, knowing that everything he did in the present, would count towards the outcome in the end. If he really wanted to do something, he found a way to do so. No excuses. Dedig was extremely passionate in anything he did. He was never driven by money but fueled by a passion that I believe is what provided him with an intrinsic drive that kept him going. My dear readers, the reason I am sharing these specific qualities with you, is because I believe that these qualities are what make up successful entrepreneurs. Although dedig was someone who preferred ‘cowboy’ movies to sci-fi and technology, I hope these lessons of life that I’ve learnt from him, would help you too. Thank you for allowing me to share this with you. <3

INDUSTRY STORIES

INDUSTRY STORIES GlamBox Acquired by KSA Consortium

Souqalmal.com Raises $10M Series B

Crescent Enterprises Launches $150M Corporate Venture Capital Division

TECHNOLOGY

BUSINESS

Do Not Blame Artificial 10 Intelligence Daniel Merege, CEO & Founder of CityTech shares his opinion on the pros and cons of Artificial Intelligence and shares his views on the benefits of AI.

CEO SERIES: Fadi Ghosn, CMO of 20 Nissan Middle East CEO of ArabNet, Omar Christidis, sat down with Fadi Ghosn, CMO of Nissan, to discuss the future of transportation, cars, and marketing in the automotive industry.

5 MENA Health Tech 12 Trends of 2017 We highlight 5 tech trends and MENA startups that have disrupted the healthcare industry in the past year. Flying Autonomous Taxis: 16 A Viable Mean of Transportation Public aerial transportation is gaining traction and numerous companies are hopping on the AAV bandwagon. We explore the 3 main contending players in aerial transportation sector and the challenges they face.

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The Future of Automotive Retail Virtual and Augmented Reality Online Retail Vending Machines

24 25 25 26

The Brilliance and Uncertainty of 28 MENAâ&#x20AC;&#x2122;s Car Care Services Industry We explore MENA Startups are aiming to revolutionize the traditional car care sector with innovative technological alternatives that are eco-friendly, convenient, and time-saving.

Issue no 15, Winter 2017

DIGITAL MEDIA

ENTREPRENEURSHIP

MEET THE TEAM

Automotive 30 The Importance of Brand Building 32 in the Automotive World Research conducted by Choueri Group in partnership with Nielsen in KSA, to observe the automotive purchase journey, dividing the purchase journey into stages giving marketers insights into how to access this valuable auto market.

The State of Venture Capital 36 in the MENA We spoke to key investors across the region to get their perspective of the state of venture capital in the region, the major trends, and more.

Editor-in-Chief

Who Are MENA’s 34 Adtech Startups? We searched high and low for MENA’s adtech startups and have compiled a list of the most active adtech startups that caught our attention.

Acquisition Spotlight: Carriage 42 During ArabNet Kuwait 2017, we sat down with Abdullah Al Mutawa, Co-Founder and CEO of Carriage to discuss Carriage’s journey, the acquisition, and upcoming plans. MAP: MENA Regional Funding 46 Institutions We’ve mapped out all the funding institutions in the 9 of MENA’s key markets. KSA Innovation Economy 48 Tech Startups 2017 Excerpts from a report conducted by ArabNet is designed for anyone interested in investing in the Saudi Arabian tech startup scene, in supporting or launching an incubator, accelerator, or mentorship program, and in the entrepreneurial ecosystem in Saudi Arabia in general. 10 MENA Startups To Keep 52 On Your Radar In every issue, we bring a list of startups from the MENA region to put on your radar.

Omar Christidis

Managing Editor Rita Makhoul

Staff Writers Lynn El Bizri Nadine Kahaleh Nicholas El Bizri Paul Gadala

Contributors Daniel Merege Mathieu Yarak Youmna Borghol

Design 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

Winter 2017 THE QUARTERLY

INDUSTRY STORIES

INDUSTRY NEWS GlamBox Acquired by KSA Consortium A Saudi Arabia-based consortium of investors has acquired the beauty subscription ecommerce company, GlamBox Middle East. They had previously raised over $4M in venture capital funding from regional investors including STC Ventures, MBC Ventures, R&R Ventures, and KSA strategic investors. The Saudi consortium, which has acquired GlamBox, has diversified interests in media, retail and hospitality and aims to drive the company’s next phase of growth in Saudi Arabia, the GCC, and beyond. Apostolos Binomakis of Iliad Partners advised the sellers on the transaction as an independent advisor, with the shareholders including the founders, STC Ventures, MBC Ventures and R&R Ventures selling their stake to the new owners.Co-founders and angel investors Shant Oknayan, Fares Akkad, Christos Mastoras, and Marc Ghobriel launched the Dubai-based startup in 2012. Since 2012, GlamBox has expanded geographically in both UAE and KSA initially offering women’s subscriptions. Earlier this year they introduced men’s subscriptions plus ventured into traditional ecommerce. GlamBox established a strong brand in the market and was selected as a Top MENA Startup by Forbes Magazine in 2015, 2016 and 2017 amongst other awards. GlamBox has partnered with over 200 brands and distributors in the region who keep returning to work with them as an important marketing and sales channel. The team notes that “GlamBox now has full operations in 2 countries, its consumer base keeps growing at lightning speed (5x just in the past year!) and has an experienced, well-oiled team led by a strong CEO.”

Souqalmal.com Raises $10M Series B Financial comparison platform Souqalmal.com announced a $10M Series B round led by Saudi Arabia’s Riyad TAQNIA Fund. The round included foreign exchange and money remittance company U.A.E. Exchange, and U.K.-based financial comparison site GoCompare. Matthew Crummack, chief executive of GoCompare, said the company chose Souqalmal.com for its first overseas investment because “it is the clear leader in financial education and personal finance comparison in the Middle East”. “With a youthful and tech savvy population, the potential for growth in the region is huge and Souqalmal.com is the ideal partner for us here,” he added. The partnership with UAE Exchange would see Souqalmal.com introduce an offline presence for the first time and the tie up with RTF would open up the Saudi market as Souqalmal.com looks to become the first insurance aggregator operating in the country. Today, Souqalmal.com is one of the most funded fintech startups in MENA, with a total of $14.5M, after having raised $300K in 2012 and $1.2M in 2014 from the Antwerp-based venture capital firm Hummingbird Ventures. Over the past year, souqalmal’s insurance business has increased by 800%, and the platform has optimized its product, slashing its customer acquisition cost by 80%. Musa plans to use the latest investment to grow the brand, amp up the company’s marketing, and expand in the region, first within the GCC and then across MENA.

THE QUARTERLY Winter 2017

Altibbi Raises $6.5M in Funding Round Altibbi Ltd. announced a new round of funding amounting to $6.5M. The round was co-led by Middle East Venture Partners (MEVP) and DASH Ventures, with the participation of new strategic investors TAMM, RIMCO Investments, Endeavor’s Catalyst Fund, and other undisclosed investors. The proceeds of the latest round will primarily be used to expand Altibbi’s digital health offering for businesses and consumers in MENA. On the content side, Altibbi intends to grow its presence and further expand its Arabic medical content library of 1.5M pages. Furthermore, Altibbi will build on its free Q&A platform that currently answers 1,000 daily questions through its directory of 12,000 verified Arab doctors. On the telehealth side, Altibbi aims to expand it’s offering on its premium health plans to the Arab World: real-time, round-the-clock telehealth services, and unlimited access to high-quality primary care local doctors. Altibbi will further invest in developing integrated industry-specific solutions for businesses in MENA. The telehealth solution will enable large employers to enhance employee wellness, drive operational efficiency and save on healthcare costs.Altibbi provides ‘connected health’ services and solutions in 10 markets across the Arab World, primarily delivered through its flagship mobile application and online presence.

Beehive Raises $5M in Investment

Democrance Secures $800K in Funding

Beehive, MENA’s leading peer to peer lending (P2P) platform, has secured $5m investment as part of a Series A round led by Riyad TAQNIA Fund and supported by the Mohammed Bin Rashid Fund (MBRF), the financial arm of Dubai SME, as well as several other regional investors. This latest round brings the total raised by Beehive to $10.5M since its launch in 2014, Beehive uses innovative technology and flexible Sharia compliant financing solutions to directly connect established businesses with investors, giving SMEs faster access to lower cost finance and investors attractive returns and diversified risk. To date, Beehive has successfully facilitated finance of over $35M (to more than 200 business funding requests and registered more than 5000 international investors. Individual investors can invest as little as AED 100 into any business listed on the platform. Beehive undertakes thorough due diligence on each business listed on the platform and facilitates the financial agreement between the business and investors, charging a small percentage fee of the amount. In March, Beehive also became the first peer-to-peer lending platform in MENA to be regulated by the DFSA.

Democrance, a UAE-based insurance technology startup with a mission to enable partnerships that make insurance accessible and affordable for those who need it most, raised $800K during its first round of funding. Leading regional and global individual and institutional investors participated in the round, including Jabbar Internet Group, one of the most prominent investors in internet and technology companies in the Arab World and Eos Venture Partners, a global InsurTech (Insurance-Technology) Venture Capital investor based in London. Other investors included Turn8 from the UAE, F-Horizon Group from Saudi Arabia, Seedstars from Switzerland and several angel investors from the UAE and broader MENA region, Europe, South Asia and the United States. Democrance is set to pave the way in developing the InsurTech industry along with educating the public about its usages and benefits. The digital platform brings together insurance and telecommunication companies, allowing users to get access to insurance through their mobile phone, without even having access to a bank account.

Winter 2017 THE QUARTERLY

INDUSTRY STORIES

Ajar Online Raise Second Round of Investment

Tutoring App Synkers Raises Seed Funding

Ajar Online, a fintech startup based in Kuwait, closed their second investment in a round led by Dubai-based venture firm BECO Capital and Sharq Ventures. A cloud service designed for the real estate market, Ajar Online offers a quick and secure online rent collection and free property management platform for tenants and landlords. The beta version was released in late 2015 with a full live cloud solution launched that August. In October of the same year, Ajar Online signed a non-exclusive partnership with Warba Bank to empower their solution, and by January 2016 Ajar Online was officially established. Ajar Online provides optimum free property management solutions by digitizing rent payment and collection services in an effective manner. The service allows tenants to pay their rent online, at any time and anywhere via SMS and email in less than 60 seconds, simplifying the rent collection process for landlords and providing efficient property management tools to save time, reduce costs and take the right decisions. The latest investment will support Ajar Online’s growth in the region, allowing them to upgrade the current services, and release new tools for the landlords. With offices in Kuwait and representatives available in Dubai and Saudi Arabia, Ajar Online are actively pursuing to increase their workforce by hiring entrepreneurial talents to join their team, and aiming to strengthen their presence by scaling globally by early 2018.

Synkers announced that it had closed its first seed-funding round with Phoenician Funds, following its graduation from Speed@ BDD’s acceleration program in July 2016. Founded by Zeina Sultani, Sibylle and 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 their high performing tutors with top corporations looking for qualified interns. 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. Today, Synkers has 11 employees, is present in 10 universities, has over 780 verified tutors and is used by over 15000 students. The startup has won several competitions including the Hyundai StartUp Competition, the Femme Francophone competition, and the ArabNet Startup Battle in Beirut.

Eventtus Raises Investment of $2M Eventtus announced a new investment round of $2M led by Algebra Ventures and 500 Startups, bringing the total capital raised by the company to $2.65M in less than two years. The investment will allow Eventtus to accelerate its expansion in the Middle East and introduce new products to also compete on a global scale. The company’s roadmap focuses on developing new platform features for optimizing the outcomes of all event stakeholders and new features range from making the lead generation process more efficient for exhibitors to diversifying the revenue generation options for organizers. Eventtus is also on course to launch its’ new AI module that will enable participants to identify the best people to connect to at each event based on a machine learning algorithm that understands their business goals better and better with each interaction. Eventtus has been working on technologies such as social media integration, personalization or real-time intelligence, and has seen an impact in the engagement rates of attendees and an increase in the longevity of event series.

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TreasuryXpress Announces Closing of $5M Funding Round TreasuryXpress, a global provider for friction-less and on-demand treasury management solutions (TMS), announced that it has recently closed a growth investment of $5M from a consortium of investors including Middle East Venture Partners (MEVP), iSME Capital, and The Luxury Fund. The investment provides TreasuryXpress with an opportunity to leverage the growing need for on-demand, cloud-based treasury management and financial products. Following two consecutive years of triple digit growth in the US and EMEA regions, the new investment will allow the company to continue to expand its on-demand business model into key markets with treasury-friendly fintech solutions. By delivering solutions that change the way treasury teams can purchase, implement, and consume treasury and financial technology, TreasuryXpress has successfully introduced a new model of TMS to the market that allows companies across various industries to automate and improve their treasury processes in a quick and scalable way. With connectivity to more than 10,000 bank accounts worldwide, TreasuryXpress processes yearly payments amounting to $8B and manages more than 50M transactions in its data warehouse. To date, more than 125 enterprise clients across 41 countries and an additional 140+ self-service clients are using their store products and APIs.

Crescent Enterprises Launches $150M Corporate Venture Capital Division

Crescent Enterprises launched a corporate venture capital arm last week, with plans to invest $150M over the next three years, making it one of the largest corporate venture units in the MENA. Over the years, Crescent Enterprises has made strategic investments in funds such as the Abraaj Group, Growthgate Capital, Wamda Capital, and TVM Healthcare, to name a few. The Company also launched in-house incubator, CE-Ventures, which is committed to incubating financially-sustainable and socially-conscious businesses. This new venture capital arm, CE-VC will focus on strategic direct investments in early to later-stage start-ups across the world. Along with the announcement, Badr Jafar said: â&#x20AC;&#x153;Over the years, Crescent Enterprises has invested in a number of high-growth sectors from ports and logistics to healthcare, recognizing the strong business case to diversify. We have also been quietly active in the corporate venture capital space. In fact, over the past two years, we have made one investment every month on average. In the last six months alone, we have invested in a wide range of start-ups from a Silicon Valley-based drone company for the industrial sector and robotic surgery technologies, to an e-commerce platform for fisheries in India. We also seeded entrepreneur graduates from the American University of Sharjah who are developing an artificial intelligence project management system.â&#x20AC;? With existing operations in sectors including ports and logistics, power and engineering, business aviation and healthcare, and spanning across several markets and employing over 4,500 people, Crescent Enterprises is the diversified subsidiary of Crescent Group, one of the most progressive family business groups in the region that has been actively contributing to the economic landscape of the MENA region for over 45 years. Winter 2017 THE QUARTERLY

INDUSTRY STORIES

THE QUARTERLY Winter 2017

Winter 2017 THE QUARTERLY

TECHNOLOGY

DO NOT BLAME ARTIFICIAL INTELLIGENCE By Daniel Merege

Although not very new, Artificial Intelligence (AI) has gained prominence in recent years, both positive and negative. As an example, there is an idea that as machines learn to "think" as humans, they may, in the near future, take humansâ&#x20AC;&#x2122; work positions that today employ

THE QUARTERLY Winter 2017

millions of people around the world. But, is AI really guilty? The concept and techniques of AI are not so new, at least for computersâ&#x20AC;&#x2122; age. During the 1950s,

there was a great enthusiasm for scientific research that combined mathematics with computational techniques, aiming to teach machines to make decisions and to infer things from what they learned. However, in those days there was no computer processing power to perform heavy calculations, or a large amount of

available data, that could justify the adoption of these techniques by industries and companies. Within the last five years, this scenario completely changed. We have achieved tremendous computing power to enable these heavy calculations, which are required for machines to "learn" patterns. Also, we now produce and have available a large amount of data, which serves as raw material for machines to learn. These facts sparked technology companies, such as Google and Facebook, to develop techniques and products that made AI accessible and feasible. That's why we talk a lot about it nowadays. The truth is that AI is extremely useful to make computers our allies on analysis, and the prediction of problems and solutions, simpler to more complex. With these techniques, it is possible for the computer, for example, to identify cancer by analyzing images. To perform this activity, a group of human doctors classify thousands of images, saying which is cancer and which is not cancer. Computers end up creating a mathematical model to analyze and indicate if there image includes cancer or not, in a matter of seconds. Other examples can be found in different sectors, such as urban services management, SPAM filters, and chatbots. The potential applications of AI are endless and can greatly improve the productivity and effectiveness of processes, products and services.

The issue is the ethical boundaries of our relationship with machines. I take the example of the development of chemistry. With the same basic knowledge, we can produce medicines that save lives , but we can also produce chemical weapons that destroy lives. Or with the computer itself, which brings us both the marvels of the digital world as well as cyber threats and the loss of privacy. Likewise, AIâ&#x20AC;&#x2122;s main concern is in its application, not in the development of its techniques per se. Therefore, computational ethics here is an essential factor. We must invest in the development of the computer industry, which can bring us many advances in terms of production and quality of life, but we must determine the limit in terms of application of this knowledge. We want machines that help us detect urban problems quickly and proactively, but we do not want machines that identify a person's sexual orientation, based on his/ her facial images, or that can help malicious people act destructively and against human rights. We donâ&#x20AC;&#x2122;t need that. The point here is that we need to define, as a society, the values we want to extract from all these techniques. It is very important to establish global-level legislation to define ethical rules for AI applications, as we see for medical practices, for example.

human, and it is with them that we should be concerned. And even if an application might, for example, lead to human jobs losses, we should look at what action we take now to prepare the affected workers to win new jobs that will emerge from that. Everything is a matter of evolution and improvement, and we can certainly live in a world where AI brings us comfort, well-being and quality of life. We should not blame it for the decisions that people interested in bad applications of AI will make. These decisions are exclusively human.

Daniel Merege CEO and Founder of CityTech. He worked for 7 years in the Brazilian financial market and managed a start-up in the field of Collaborative Marketing. In 2014, Daniel traveled through 13 countries and 60 cities studying the development of Smart Cities in countries such as Australia, India, Lebanon and Spain. In 2016, he founded CityTech, a company dedicated to technological projects oriented to urban development and innovation.

Regardless the track AI takes from here, we can not blame it. Decisions, after all, are always

Winter 2017 THE QUARTERLY

TECHNOLOGY

USEFUL APPS FOR TRANSPORTATION

5 MENA HEALTH TECH TRENDS OF 2017

A Round-Up of Taxi-Booking Apps for Residents in MENA

By Lynn El Bizri | @lnlne

THE QUARTERLY Winter 2017

Healthcare is one of the world’s largest industries. Globally, the size of the healthcare market is estimated to be between 5 trillion to 6 trillion dollars, with the digital health industry in specific being between $55B and $67B and growing at a rate of 20-25% annually. In the MENA region, healthcare spending crossed $95.8B in 2013 and is estimated to reach $144B by 2020, according to a report by Al Masah Capital. While healthcare has always been a lucrative industry to disrupt and invest in, the digital health industry is growing quickly and gaining substantial disruptive potential. Here are 5 tech trends and related startups that have disrupted the healthcare industry in MENA this past year:

Wearables The trend of self-monitoring was dominant in

The trend of self-monitoring was dominant in 2017, as wearable medical technology became more common worldwide, and more devices entered the market. Wearable health devices, which monitor everything from sleep to stress, not only serve as an ongoing measure of one’s wellbeing but also allow doctors to remotely monitor things such as heart rate and blood pressure. CardioDiagnostics, which was established in the US by Ziad Sankari in 2010, is a medical technology company specialized in developing cardiac monitoring products and services for

doctors and patients. One of its products, the

allows medical professionals to monitor

doctors and patients. One of its products, the LifeSense Arrhythmia, is a portable wireless monitoring system that automatically detects, records, and transmits a range of cardiac events wirelessly, allowing physicians to monitor patients for any abnormalities continuously and in real-time. The company also developed a software platform called CloudBeat, which is the the world’s 1st HIPAA-Compliant, hardwareagnostic, cloud-based cardiac monitoring system accessible from any internet-connected device. The platform allows medical

professionals to monitor patients’ hearts, generate medical reports, and empowers them to make fast and proper diagnoses from the cardiac data. CardioDiagnostics is one of Berytech’s Fund I portfolio companies and went through UK Lebanon Tech Hub’s International Acceleration Phase to London. The company also received a seed fund of $540K in 2015. Currently, the majority of CardioDiagnostics' business comes from the U.S, followed by Saudi Arabia, Kuwait, and Lebanon, with Turkey being next on the expansion agenda.

Telehealth 2017 was a defining year for Telehealth (TH), as healthcare providers enhanced their ability to evaluate, monitor and diagnose patients remotely via real-time communication. In addition to breaking down geographic barriers and increasing access to healthcare for patients in rural areas, TH reduces costs and initial in-person hospital visits for patients, improves post-discharge communication, and facilitates improved access to care. Hospitals and large medical facilities also aim to utilize TH between departments and staff for patient management and real-time patient health information sharing. AlemHealth, which was launched in 2014 by

Sajjad Kamal and Aschkan Abdul-Malek, is an online platform that connects hospitals in developing countries with a global network of medical professionals and services. Through its GPU-powered AlemBox, the startup allows physicians in hospitals and diagnostic clinics in Kabul, Afghanistan to tap into a global network of radiologists and specialists to get accurate diagnoses quickly. Moreover, it surpasses limitations in electricity and the connectivity infrastructure by providing these IT services over a 3G mobile connection. To use AlemBox, the local facility upload images to the device. The chip inside quickly

processes the large digital files, which are then sent to a specialist in the U.S, Europe or India over a mobile connection using AlemHealth’s low-bandwidth protocols. The specialists assess the images and return a diagnosis in as little as 90 minutes. In February 2015, AlemHealth became the only UAE-based company to become part of the prestigious NY-based start-up incubator Startup Health, and early last year, expanded to Lagos, Nigeria, with plans to enter the Iraq and Sudan market next. AlemHealth has received yearly seed funding since 2015, and received its latest seed fund in March from Y Combinator.

Cloud Computing This year, a large percentage of the accelerated investment in healthcare technology included the cloud. According to a HIMSS Analytics Cloud Survey,

over 83% of healthcare organizations are using cloud technology, and the healthcare cloud computing market is estimated to grow to $9.48B by 2020,

according to a MarketsandMarkets report. Cloud technology not only accelerates the way the healthcare industry uses or shares information across networks,

Winter 2017 THE QUARTERLY

TECHNOLOGY

USEFUL APPS FOR TRANSPORTATION but also makes it easier to archive and use electronic records, streamlines collaborations among physicians, minimizes in-house storage needs, and allows for high-powered data analytics.

for every patient including all critical information for better treatment accuracy and the ability to easily reach a patient in case of emergency.

control over various facility resources; Aquila Web, a functional publishing solution for patients’ studies and images; EduNabda, a e-learning system where images and studies are categorized according to the ACR codes; and Aquila View, a PACS workstations for various radiology and cardiology modalities.

A Round-Up of Taxi-Booking Apps for Residents in MENA

Based in Egypt, NabdaCare was founded in 2011 with a focus on building a holistic cloud medico-social platform where the individual is the core objective, and aims to link patients, care providers and personal medical records. The app creates a profile

NabdaCare currently offers 5 diverse products: Aquila, a PACS (picture archiving and communication system) server that enhances handling of medical images and patient care; Connexa, a multi-entity, multi-branch, and bilingual radiology information system that gives

Today, NabdaCare has offices in Egypt, Kuwait, USA, and UK, and is planning to enter the African market soon.

3D Printing 3D printed models have been used in a growing number of medical settings 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. While 3D printing is usually the creation of physical and highly detailed 3D models

using computerized templates and a variety of materials, in medical and surgical specialties, the 3D templates are created through MR, CT, angiographic and other imaging techniques. The resulting print is a replica of a patient’s organ or an area in the body. Medativ is a Dubai-based 3D anatomical model printing company that was launched in October 2015 by founder Mohamed Elawad. Operating out of Boston, Massachusetts and Dubai, UAE, Medativ aims to improve patient outcomes and safety while reducing costs. Last December, Surgeon Dr. Yasir Al Saeedi, performed a surgery to remove a kidney tumor at the

Dubai Hospital with the help of Medativ’s 3D technology, making the hospital the first in the MENA region to use such technology for a kidney surgery. Medativ created a 3D printed replica of a kidney, featuring the tumor, ureter and the vasculature. In September, Medativ were accepted to participate in Dubai Future Accelerators’ 12-week program, where they were given the opportunity to work directly with Dubai’s Health Authority. 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.

AR Augmented reality for surgery has been discussed in academic and industrial research since the 1990s, however it is only recently that physicians and surgeons have started adopting the technology, identifying potential applications for it and immersing themselves into high-resolution, 3D representations of their patients’ anatomies. Just earlier this year, Dr. Marc Tewfik, MUHC director of Rhinology and assistant professor in the department of Otolaryngology at the McGill University Health Centre, broke ground by becoming the first surgeon in North America to use augmented reality (AR) for sinus operations. Dr. Tewfik, who has completed several AR-aided surgeries to

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date, previously relied on a pointer, static scans and educated guesses to conduct procedures. Thanks to AR technology, he can now navigate 3D maps of his patients’ nasal systems, all in real time while operating. Founded in 2016, Proximie is an AR platform that enables surgeons to virtually transport themselves into ORs to guide, train, teach, and support other surgeons and medical experts, all through the screen of a tablet. Founded by Nadine Haram and Talal Ali Ahmad in 2016, the platform is based around the concept of having two mobile devices or tablets, one in each location, with a camera for viewing and a screen/microphone setup

for communication. Using AR, the remote ‘assisting’ surgeon can guide the operation and operating surgeon with commentary or screen markings. Last year, Dr. Ghassan Abu Sitta, Head of the Plastic Surgery Division at AUBMC, used the software to lead operations in the Gaza strip from Beirut and demonstrate in real time the actions needed to be taken. In the US, Dr. Raj Vyas, a surgeon at The University of California Riverside (UCR), also worked in partnership with Proximie to train two senior plastic surgeons based in Peru in treating cleft lips and palates. In addition, the application is being used to give medical students hands-on education and surgical experience.

Winter 2017 THE QUARTERLY

TECHNOLOGY

USEFUL FLYING AUTONOMOUS APPS FOR TRANSPORTATION TAXIS:

A VIABLE MEAN OF TRANSPORTATION? A Round-Up of Taxi-Booking Apps for Residents in MENA

By Nicholas El Bizri | @nlblb

n recent months, the idea of an alternative mode of transportation has started to make headlines. Back in March, Dubai announced a pioneering initiative to employ a fleet of automated aerial vehicles (AAV) for public transportation means. Furthermore, at Uber’s Elevate Summit, the company announced their plans to roll out a network of AAVs in both Dallas and Dubai by 2020 as an expansion of its already massive transportation service. The success of such a service, however, relies on three main achievements; first and most importantly is the manufacturing of these airborne vehicles, second is the development of the infrastructure for take-off/landing, and third is the authorization by transportation agencies such as the FAA or Dubai’s RTA.

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KEY PLAYERS Public aerial transportation is gaining traction and numerous companies are hopping on the AAV bandwagon. However, as of now, there are only three main contending players in the autonomous aerial transportation space.

UBER Relying on numerous manufacturing and logistics partners, Uber’s plan is to offer VTOL (vertical take-off/ landing) aircraft that will be both lightweight and electrically powered for zero emissions. Their goal is mainly to ease traffic congestion but also reduce travel times, and offer a cheaper means of transportation and support sustainability. The company also stated that it hopes to eventually get the cost of a trip down to an ambitious $1.32 per passenger per mile, making it “economically irrational” to even drive or own a car.

DUBAI’S RTA Once again, Dubai is ahead of the curve as Dubai’s aerial transportation service is part of their ambitious strategy to have self-driving vehicles account for a quarter of journeys made in Dubai by 2030. Dubai, however, doesn’t plan to wait around for Uber to deliver and has already started the testing process of their aerial vehicles. Having started trials with the Chinese company EHang, the EHang 184 AAV has already been seen hovering above the sand dunes near the city’s airfield during test flights. Since then, Dubai has signed an agreement with German aviation company, Volocopter not mentioning the reason for the switch. Unlike the EHand 184 AAV, the Volocopter 2X is a two-seater, and the battery can be fully charged in 40 minutes for a maximum flight time of 30 minutes.

AIRBUS Airbus is also independently developing an AAV in an effort to ease congestion by taking daily commuting to the sky. As Airbus gets closer to its first test flight, the company has stated that a ride in their vehicle will be as cheap as taking a taxi per mile. Airbus is also the first company to release an expected price for its service, estimating costs between $1.50 and $2.50 per mile. The electric aircraft, called Project Vahana, will also fly autonomously. Airbus’ first prototype is said to have a range of 50 kilometers; however, the final version, which is set to hit the market in 2020, will be capable of achieving a distance of 100 kilometers.

The autonomous aerial taxis will fly passengers on predetermined routes and trials will continue for approximately 5 years. RTA is working with Dubai Civil Aviation Authority to iron out legislative and operational guidelines.

Winter 2017 THE QUARTERLY

TECHNOLOGY

USEFUL APPS FOR TRANSPORTATION A Round-Up of Taxi-Booking Apps for Residents in MENA

ISSUES AND CONCERNS Dozens of companies and startups have started to join the race in building AAVs that can transport anything and anyone through the air. But before you get your hopes up, it’s time mainstream consumer transportation vehicles. Here are a few of them:

Battery Technology & Charging

Communication & Safety

Battery technology today does not provide the energy needed for AAVs to overcome gravity. AAVs require massive amounts of continual downforce to simply avoid falling out of the sky. The battery power-to-weight ratio is simply not sufficient enough to power a flying object large enough to transport humans for more than a few minutes at a time. Therefore, until a breakthrough in battery technology, AAV transportation is sadly just a fantasy.

It’s safe to say that most of people's concerns with any pilotless aircraft is communication and safety. EHang claims that its ground control centers will have full control of the aircraft in case of danger and will be able to send signals and communicate with passengers at all times. However, what happens if that technology is interrupted for some reason? There’s not much the passenger can do at that point.

Reliability

Infrastructure

During extreme weather conditions, EHang states that command centers will prohibit any AAV from take-off. But weather can be unpredicatable, and the idea of a large, heavy, battery-powered aircraft with spinning blades losing control over urban landscapes just sounds like a bad idea. Electronics are always susceptible to failure which is another grave concern. Aerial aircrafts may suddenly break down or even crash into trees, wires and birds.

It’s one thing to build AAVs but setting up the infrastructure to support them is one of the biggest hurdles. In order for such a transportation system to be economical, numerous landing spots are needed. Funding these landing spots will be costly especially in densely populated cities. Furthermore, given that transportation agencies ensure these aircraft meet all federal safety regulations, they still need to figure out where and how they fit into the complex air traffic control system.

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BUSINESS

CEO SERIES

FADI GHOSN

CMO of Nissan Middle East By Lynn El Bizri | @lnlne

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ursuing a goal of zero emission vehicles and zero fatalities on the road, Nissan announced their ‘Intelligent Mobility’ vision early last year, a vision that aims to move customers around the world towards a safer and more sustainable future. To realize the vision, Nissan launched a long-term strategy that enabled the company to introduce the world’s first mass production Electric Vehicles (EV), the LEAF, in 2010, and drove the development of cuttingedge autonomous driving technologies. These steps have allowed Nissan to not only deliver the benefits of EV and autonomous driving innovations to as many customers as possible, but also lead the way toward a new era of mobility. During ArabNet Digital Summit 2017, CEO of ArabNet Omar Christidis sat down with Fadi Ghosn, CMO of Nissan, to discuss the future of transportation, cars, and marketing in the automotive industry. With self-driving cars and the spread of carsharing services, what do you see as the future of transportation? And what do changes in car ownership behavior mean for a brand like Nissan? While autonomous driving, carsharing, and on-demand car services like Uber are currently disrupting the automotive industry, they will eventually be part of every city’s business model. While it is difficult to see how things will change and expand in the future, at Nissan, we obviously see ourselves building different cars in the future that fit the requirements of carsharing and other trends. Today, most car manufactures classify cars by A, B & C segments, where A is a mini car, B is slightly bigger and C is a medium-sized car. When it comes to car sharing, the ABC classification loses importance, because instead of a customer choosing an A car as their first car, they may decide to carshare instead. Therefore, all car manufacturers are making huge investments in the direction of carsharing. So today, what car features do people value and what features do you think they are going to value in the future?

How are they going to make their purchase decisions? I believe if you look at geographies and demographics, each has its own requirements. The common understanding is people always look for value, safety, reliability, comfort, and in some cases luxury. In whatever case, whether you want to take an Uber or you want to carshare, these things are fundamentals of the business. However, another important feature I would like to add is digital connectivity.

the car can act on behalf of the driver, the driver is still in control of the car. Dubai specifically is extensively testing autonomous driving and will soon be pioneers in automotive technologies. As for self-driving, I believe it will be a long time before we see self-driving cars on the roads, since it will require more technology and a lot of regulations to become commercially available. Moreover, we have also seen in testing, that human interaction is still needed to direct self-driving cars.

The process of getting a car from the conception phase to the market is a 6-7 year-long process. So for example, when a screen with some kind of technology is developed for a car, by the time the car gets to market, the technology is old. Today we see a lot of people not opting for a navigation screen but rather for something we call mirroring, which allows car owners to mirror their phones to the screen.

Self-driving cars do not come without some challenges for governments and municipalities. For example, self-driving cars mean lower insurance, which means less income for insurance companies. Self-driving cars will also affect cities where the income of traffic is in the millions, like in New York City. However, I still think we are in the early stages of discovery and all we can do is understand and cope with the changes.

The screen is no longer a navigation screen, but a multimedia screen, which you can do so much more with. Therefore, although we are evolving with technology, technology is also moving at a pace that not all car manufacturers can catch up with, and only a few are really taking a leading position in that sense. So with this context, where do you see Nissan in the next five years? It’s tough to describe but what we are trying to do is combine all our technologies under one main umbrella which is Nissan Intelligent Mobility and three main pillars which are: • Intelligent Driving • Intelligent Power • Intelligent Integration Therefore, several of the technological trends that we are embracing such as EVs, autonomous driving, and selfdriving vehicles fall under those pillars What about self-driving cars? What are Nissan’s plans? When will we see selfdriving cars? So let’s talk about the difference between autonomous driving, and self-driving cars. With autonomous driving, whilst

Winter 2017 THE QUARTERLY

BUSINESS

USEFUL APPS FOR TRANSPORTATION Let’s talk about marketing. How are you going to communicate around the channels that you’re using and the strategies that you are using? Where are you expecting to spend more money, and what kind of new channels or strategies are you pursuing within the digital media domain? While there is definitely a move into digital, traditional media still plays an important role when targeting specific audiences, geographies and demographics. Moreover, the challenge is not in identifying which channels to use, but rather defining the customer, as most agencies today still define the customer by ‘Age 20-40, Male, etc.’ which will not work moving forward.

which is the dedicated Omnicom unit

so you wouldn’t expect a customer to

within the United States.

$15K to $100K by just going online or experiencing it via virtual reality. The customer needs to go and test drive the car, feel it, touch it, etc. Customer experience is very important and we are redefining the whole customer experience by implementing a frictionless customer journey.

A Round-Up of Taxi-Booking that handles Apps Nissan’s formarketing Residents business in MENA buy a car that costs anywhere between

So how would you define the customer? I think you need to believe in the data and you need to be ok with making mistakes. As a company, we have been investing heavily in marketing mix modeling where we are using data to really analyze and optimize. I also think we are one of the few manufacturers that talk about integration and we have even created an agency called Nissan United,

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What about the customer journey? How do you see technology transforming the customer journey and how do you see the purchasing process changing as a result of new technologies? Are you looking at new touch points in the customer journey? How do you see that being reshaped? Of course, we are using so many techniques and we’re making mistakes and learning. There is no magic formula, and we’re going through a digital transformation with a ‘digitize or die’ attitude. Today, there is suddenly a lot of data, but the problem is we are in a region where there once was no data, and and a lot of people are struggling with what to do with it. If you look at the purchasing cycle of an automotive, people are conducting a lot of research online, so the customer is well-informed, but still needs to go to the showroom. Car purchase is the second biggest investment after a home,

Do you think e-commerce is a viable strategy for automotive? Ignoring it would be a mistake and I definitely think we need to keep learning. Car shopping won’t happen online because the shopping experience is different from the ownership experience. So you can shop around online, but you also need to interact with the car. A customer may spend $500 on an item online, but when buying something that costs $20K, customers need to go beyond their screen. Moreover, apart from touching and feeling the car, there are a lot of emotions that goes into purchasing a car, and we cannot simply ignore those.

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BUSINESS

THE FUTURE OF AUTOMOTIVE RETAIL By Nicholas El Bizri | @nlblb

With the world becoming more digital, connected, mobile and service-driven, the retail industry has shifted from a product-driven to a customer-centric direction. If youâ&#x20AC;&#x2122;ve ever ordered a product off Amazon or reserved a table at your favorite restaurant online you know what Iâ&#x20AC;&#x2122;m talking about. Technology has disrupted the retail industry, making us increasingly independent through mobile technology. Now digitalization is slowly making its way to the automotive retail industry. Automakers have realized that people have become accustomed to the fast-paced and connective lifestyle. Thanks to the savings of employing digital practices, automakers have started to adopt digitalization into their strategies.

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VIRTUAL AND AUGMENTED REALITY

Augmented (AR) and virtual reality (VR) have penetrated numerous industries since inception, including the automotive industry especially. Automakers are making use of AR and VR in both marketing and selling practices. This technology is both accessible at the comfort of your own home as well as at certain dealerships. AR and VR technology provide an additional service layer to widely available Internet data and information â&#x20AC;&#x201C; customers now have an in-depth visualization of their car with the ability to make changes to both interior and exterior features. With this technology, customers are able to test drive and experience their customized vehicles online like never before. So whatâ&#x20AC;&#x2122;s the difference between augmented and virtual reality?

AR layers computer-generated enhancements atop an existing reality providing the ability of virtual interaction. VR, however, is an artificial, computer-generated simulation of a real life environment/situation. It is immersive and stimulates both your senses of vision and hearing. In automotive retail, AR is mainly being used to showcase vehicles to the customer from a third-person point of view with the chosen specs and options. VR, on the other hand, provides an immersive first-person experience with an in-car experience for viewing the interior of the car as well as test-driving. With AR and VR technology, although still in its infancy with a lot to be improved, automakers and their dealers will enjoy significant cost cuts. Dealerships today spend endless amounts of cash on showroom space and according to Bloomberg, spend approximately $2.75B annually in interest to keep new vehicles on their lots. Furthermore, giving the customer a compelling experience leads to increase sales and higher specification purchases.

ONLINE RETAIL According to a study by Ernst & Young, consumers spend an average of 10 hours scouring the web before purchasing a car. The Internet provides customers with easy access to tremendous amounts of online data and information, cutting out the need for a dealership visit. With a large part of the vehicle-purchasing journey already online, itâ&#x20AC;&#x2122;s only a matter of time until buying a car over the internet becomes more common. Both automakers and retail companies are experimenting with online automotive retail. One of the first automakers to take vehicle sale online is Tesla. Ordering a Tesla is exactly like any buying experience you've had on

the internet. Simply choose your specs and options, preview the car using their 3D configurator and then indicate your preferred delivery timing. After entering your contact information and paying the $2,500 order payment, your final payment is also conducted online. Customers have the option to pay via electronic bank account debit or wire transfer. Ordered vehicles are then custom built and delivered to a Tesla service center nearest to you for pickup. Other automakers such as Hyundai, Mercedes, BMW, and Volvo have also started to set up their own small experiments selling their cars through

Winter 2017 THE QUARTERLY

BUSINESS

USEFUL APPS FOR TRANSPORTATION their company websites. Similar to Tesla’s sales model, customers can also configure their cars online, pay a deposit and have their car delivered. Volvo has experienced tremendous success with online retail. Last year, Volvo was able to sell its entire 1,900 special edition SUVs exclusively online and now plans to offer its entire line-up.

U.K before expanding to other regions around the globe. According to Auto Express, customers may be able to spec, customize and order their car via Amazon and then have their vehicle delivered to a nearby dealer. With all of Amazon’s success in the retail market, its involvement in this space will significantly disrupt dealer operations which may motivate automakers to shift their retail approaches online.

Higher profitability due to costcutting and increasing profit margins

A Round-Up of Taxi-Booking Apps for Residents in MENA

Even retail giant Amazon recently announced its interest in selling cars online. With plans to build its new Luxembourg-based retail unit, Amazon will trial the online sale of cars in the

Enhanced customer experience through digital and social media interaction

Enhanced performance through customer analytics thanks to generated big data

If automakers do eventually cut out the middlemen, they will enjoy numerous advantages such as:

VENDING MACHINES Due to massive amounts of online data and 3D configurators, car buyers today know exactly what car they want before ever setting foot in a showroom. This fact begs for a change in automotive retail. With some automakers reluctant and others slowly shifting their sales model, start-up Carvana (considered an online retailer) has decided to capitalize on this and start offering consumers vehicles through massive automobile vending machines. Carvana allows you to buy a car just as easy as grabbing a soda from a vending machine. The customer starts by going online and checking out Carvana’s vast inventory. The customer has access to a 3D representation of the car inside and out, its specs, maintenance history and options. The customer can then buy the car, get approval of financing and even

get the trade-value of their current car in just minutes. The car is then delivered and loaded at the nearest Carvana vending machine or delivered to their door. For vending machine pickup, a unique oversized coin is sent to the customer, which is put into an oversized coin receptacle on location. The vending machine then grabs your car, rolls it down and deposits the customer’s car into a bay – and that’s it, the customer just drives off into the sunset. Carvana also offers customers a ‘7 days no questions asked’ return policy with a 100-day warranty. Another Singapore-based company called Autobahn has also built their own automotive vending machine. However, Autobahn exclusively provides luxury pre-owned vehicles. From the comfort of a sofa on the ground floor, potential buyers can view the inventory of 70 to 80 luxury cars and then order their car using a provided tablet. Once a selection is made, a promotional video of that car is played while the vehicle is automatically transported down to the customer. These vending dealerships not only cut costs by eliminating the need for a sales force but also provide profit increase through space cost-savings. Where traditional dealerships require five to ten times the space to store all their vehicles, Carvana and Autobahn store their entire inventory in just one massive vending machine. With Carvana expanding, expect to see more of these vending machines pop-up in no time.

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CONCLUSION As bad as it is for technology to take away our jobs, corporations see technology as a huge paycheck. Automakers spend a lot of money figuring out how to save it and technology is their number one answer. Therefore, we may see the above retail models being implemented much sooner than later. However, automakers and dealerships will have to make a concerted effort to succeed, which is far easier said than done. Furthermore, a large amount of consumers still enjoy interacting with humans instead of technology which is why automakers will need to think long and hard before shifting their retail strategies.

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BUSINESS

THE BRILLIANCE AND UNCERTAINTY OF USEFUL APPS FOR TRANSPORTATION MENA’S CAR CARE INDUSTRY A Round-Up of Taxi-Booking Apps SERVICES for Residents in MENA By Lynn El Bizri | @lnlne

It’s no secret that the MENA region has been witnessing a flood of on-demand startups. From food delivery to transportation, businesses are popping up across industries to cater to consumers’ needs for fast and convenient services. The automotive industry, which is constantly challenged with technological developments and evolving business models, is fully embracing the on-demand trend, and in the past few years has witnessed the launch

THE QUARTERLY Winter 2017

on-demand services specifically in the car care sector. of hundreds of on-demand car services by existing providers and operators as well as entrepreneurs across the region. According to global analysts Frost & Sullivan, 33.91 million passenger vehicles will cover the MENA region’s roads by 2020, a 61% increase over today’s 21.02 million cars. This rising number of vehicles has made MENA a growing market for innovative

Encompassing services such as car washing, roadside assistance and car maintenance, car care businesses are booming, partly due to the large number of cars being sold as well as the region’s particular weather conditions. Startups, in particular, are aiming to revolutionize the traditional car care sector with innovative technological alternatives that are eco-friendly, convenient, and time-saving.

Redefining the Car Wash Industry Getting one’s car washed can be quite the hassle, whether it means driving to the gas station and waiting in line or taking time out of one’s day to wash it. In addition to being time-consuming, traditional car wash services also pose a threat to the environment and waste a lot of water, with approximately 100-200 liters being spent per mid-sized car. Today, car owners have an alternative to traditional car wash providers, thanks to startups which are aiming to provide eco-friendly, convenient and time-saving services. On-demand car wash applications allow car owners to schedule a car wash at their convenience anytime and anywhere, saving them time and money. Most of the startups are also embracing waterless or near-waterless cleaning processes due to increases in water charges and sustainability initiatives being enforced by governments in the region. Keno, Blink My Car, and Ghaseel are three of several on-demand car wash

startups operating actively in the MENA region. While all three startups offer similar services, each follows a different business model. Launched in Dubai in 2016, Keno is an on-demand car wash service app that allows customers to order a car wash to any location through a user-friendly mobile app. Unlike most other on-demand car wash apps in the UAE, Keno runs and manages its own fleet of highly trained staff and does not rely on third party wash providers. In an industry saturated with competition, the startup boasts exceptional customer service and outstanding quality as its fortes over competitors. Currently averaging between 30-60 daily washes, the startup aims to average between 600-800 daily washes by next year. Lebanon-based Blink My Car launched in November 2015 and provides on-demand waterless car and motorcycle cleaning and detailing. Unlike Keno, Blink My Car operates on the contractor model

and outsources its labor or ‘partners’. The startup also boasts an eco-friendly service with their dry washing technique which they claim saved 500,000 liters of water in 2016. To date, Blink My Car has carried out over 4,000 services in Beirut and acquired over 7,000 registered users. In June, the startup closed a $1.2M seed round that they plan to use to increase active users in Beirut, expand in Doha, and launch in Dubai in the next 18 months. Ghaseel is an on-demand car wash application that differs in model from both Keno and Blink My Car. The first and largest online marketplace for car wash and cleaning services in the Middle East, Ghaseel allows customers to compare over 30 different carwash services and prices, pre-book appointments up to a week in advance, and track and rate services. Since launching in Kuwait in November 2015, Ghaseel has received thousands of orders during its first year of service and has recently expanded its services geographically to the UAE starting with Dubai.

The Ubers of Roadside Assistance Car washing isn’t the only car care service startups are offering. In the past few years, several startups vying to be ‘the Uber of Roadside Assistance’ have launched in MENA. Offering everything from towing and jump-starting a car to changing a flat tire and delivering gas, the startups aim to provide car owners with quick and affordable roadside assistance compared to traditional companies.

Launched in 2015, Morni provides on-demand roadside assistance across Saudi Arabia and parts of the GCC with a network of about 6000 providers. One of the first roadside assistance startups in the region, as well as one of the most active, Morni offers a variety of services including towing, battery service & replacement, tire change & repair, locksmith, and fuel delivery services on the go.

Averaging around 200 requests daily, since launching, Morni has served more than 18,000 people and been downloaded over 600,000 times. Last year, the startup received its first investment of $1.1M from Raed Ventures, a Saudi VC, which they plan to use to expand into other MENA markets and acquire more corporate clients.

businesses, are readily available and much more affordable.

Keno, Blink My Car, Ghaseel, and Morni are four of several on-demand startups seeking to disrupt the car care industry in MENA, and although they are thriving in their respective markets, these questions remain: are they sustainable? Can high-quality, eco-friendly, yet still relatively pricey on-demand car care services triumph in a region where traditional car care services are fairly inexpensive and readily available? And how will they scale in a region with such fragmented regulation?

Survival of the Fittest While the market for car care startups in MENA does exist, challenges in the industry are inevitable. For one, in the highly competitive and often saturated market, it is important to stand out from the competition, yet the majority of car care startups in the region offer similar, if not identical, services. Another challenge is pricing. The majority of car care startups charge (up to 2-3x) more than traditional car care services for the ‘convenience’ and ‘on-demand’ factor. Yet, in several countries across MENA, traditional car care service providers, such as car wash

Finally, while startups are emerging in every single technological vertical in the automotive space, in MENA, the majority are centered on mobility (car sharing, ride hailing, and carpooling), car care services (car washing, roadside assistance, and car maintenance), and connected car technologies. In order to triumph in such a highly saturated and competitive market, car startups should continuously invest in testing, innovation, and new products/services.

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DIGITAL MEDIA

USEFUL APPS FOR TRANSPORTATION A Round-Up of Taxi-Booking Apps for Residents AUTOMOTIVE in MENA By Youmna Borghol | @yborghol Mathieu Yarak | @MathieuYarak

in partnership with Nielsen

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Automotive is a core industry in Saudi Arabia, as the largest country population wise in the Gulf region, it is also the largest auto market for both new and used cars – there are round 12M vehicles actively used in the country every day. The Kingdom is the largest importer of U.S automotive products, and approximately 1 million vehicles (passenger cars, commercial vehicles and light trucks) were imported in 2016. On top of this, in September 2017, it was decreed that in 2018, Saudi women will also be able to drive in a reversal of the long standing rule, bring a whole new audience to the fore of the car industry.

people are looking for are production quality, and a strong brand name driven by image and positive perceptions. An ongoing brand strategy communicating these important values is essential.

It was against this backdrop that Choueiri Group, in partnership with Nielsen, conducted research in KSA, to observe the automotive purchase journey, and by dividing the purchase journey into stages is able to give marketers insights into how to access this valuable auto market.

STAGE 3: ‘I’m almost ready to make my car decision’. The final shortlist.

STAGE 1: ‘I’m thinking of getting a new car’. Information gathering. There are 2 main drivers which our Saudi respondents told us set them off on their new car journey: firstly, simply replacing an old car, and secondly to incorporate growing family needs. Once their need has been triggered, digital becomes the first go-to place for over a third of respondents. For many they will first search for themselves and visit specific car seller websites, followed by visiting the dealer website and then auto comparison sites. Interestingly as they move through this enquiry stage, the importance of these different information sources changes.

STAGE 2: ‘I know the cars I’m interested in’. The shortlist. Once potential purchasers are entering this stage, they have completed their information gathering. Demonstrating how important it is to get your brand into the hearts and minds of Saudi buyers in the first stage, by now three fifths have already got a primary brand in mind and almost half are highly certain about what car they will buy! There are still a fifth of consumers who are not sure what type of car to consider, so as marketers there is still a sizeable segment of buyers for us to pursue. We see some core message direction for our brand advertising; the main characteristics

Of course knowing where to reach them is key: here offline plays a key role for more than half of respondents. In offline behaviours, friends and family recommendations are paramount. We see digital advertising driving action here with almost two-thirds who were exposed to a digital ad taking action. Of them, the majority visited the dealer website, followed by requesting a quote, or a test drive.

Here the key driver for the car buyer is making sure that they are making the right choice, and other elements like available car options start to increase in importance. Capturing our buyers’ imaginations with possibilities here is the key marketing message.

purchases, and marketers will need to speak to them directly with their communications going forwards. In assessing the whole car purchase journey, whilst there is a lot of moving between information gathering, and online and offline touchpoints, it is very clear that: •

Ongoing brand communication is critical. KSA car buyers are generating their shortlists very early in their cycle

and often their final purchase comes from this list. •

Messaging must move consumers through their own journey. Strong branding is essential initially while people are searching online, and specific car options and prices become more important later in the cycle.

•

Integrating your core messages across your digital bought and owned assets, with your offline owned assets is the key way to bring new car buyers through your door.

At this stage digital behaviour is driven by auto dedicated sites, while offline is driven by dealer showroom visits. A car purchase decision is one of the major purchase decisions of an individual or household, so it’s also at this stage that our buyers start to refine and assess their priorities, and of those who change their budget from their starting point, half actually increase it to ensure they can buy the car that is most suitable to their needs.

STAGE 4: ‘I’ve chosen the car for me’. The purchase. After going through this purchase cycle, and again reiterating how crucial it is to be in consumers’ minds from the start of their journey, more than four-fifths of our respondents bought a brand they had in their shortlist, and many ended up spending a larger budget than initially expected. Another interesting branding learning, whilst the initial stages are driven mainly by an individual, by the time they are ready to make a purchase many make that decision with someone else, most often their partner. With Saudi women getting ready to take to the roads themselves, it is clear they have already had significant influence on household car

Youmna Borghol Head of Data Choueiri Group @yborghol Mathieu Yarak Data Science Manager Choueiri Group @MathieuYarak

Winter 2017 THE QUARTERLY

DIGITAL MEDIA

THE IMPORTANCE OF BRAND BUILDING IN THE AUTOMOTIVE WORLD

THE RESEARCH PHASE What triggered the users to start looking for a car and the early research phase

THE CONSIDERATION SET What brands users had in mind,the research and the impact of touchpoints in creating the shortlist

THE FINAL SHORTLIST When doing another round of research and refining their shortlist

THE PURCHASE Taking a final decision and getting the dream car

THE JOURNEY IS NOT ALWAYS TRIGGERED BY A CHANGE IN LIFE STAGE TOP 4 TRIGGERS TO START LOOKING FOR A NEW CAR

48%

27%

Upgrading My Car

16%

Growing Family

10%

Financial Situation

Going Green

BUT IT GENERALLY STARTS WITH A PRIMARY BRAND IN MIND had a primary brand in mind “the research phase”

70%

45%

are sure about the brand to buy “the research phase”

72%

did not change their consideration set “the final shortlist”

THE BRAND NAME IS FIRST AND FOREMOST THOURGH THE JOURNEY MAIN CHARACTERISTICS THAT SHAPED THE CAR BRANDS CONSIDERED

38%

35%

30%

23%

21% 10%

Branding

BRANDING: includes brand name, image, perception, country of origin, etc. CAR OPTIONS: includes exterior & interior design, features, connectivity, etc. FINANCIAL OPTIONS: includes price, resale value, financing rates, etc. SERVICE: includes maintenance fees, speed, network, etc.

35%

Car Options

Finance

Service

AND THERE IS A PREFERENCE TOWARDS MAINSTREAM AUTO BRANDS IN SAUDI TODAY 50%

23%

21% 15%

TOYOTA

HYUNDAI

FORD

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CHEVROLET

13%

NISSAN

13%

GMC

12%

HONDA

12%

KIA

LEXUS

MERCEDES

7% BMW

5% JEEP

4% MITSUBISHI

4% DODGE

3% RANGE ROVER

DIGITALONLINE TOUCH POINT IMPACT Search engines

IMPACT AFTER EXPOSED TO DIGITAL ADS 36%

12% 12%

Automotive dedicated sites Watching online videos

12%

Social sites

11%

Auto comparaison sites

Dealers websites

42%

18%

33%

17%

32%

20%

13% 13%

22%

Auto reviews on sites (Male lifestyle, news sites, etc.

35%

Visit dealer website Request a price quote

27%

11%

Locate a dealer

Download a brochure

Request a test drive

STAGE 1 'THE RESEARCH PHASE' STAGE 3 'THE FINAL SHORTLIST'

SEARCH IS KEY AT THE INITIAL STAGE.THE EXPERT OPINION BECOMES MORE VALUABLE THE CLOSER CONSUMERS GET TO PURCHASE JOINT DECISION

%63 %49

%51

11%

%55 %57

Partner

43%

%45 %43

OF THE SOMEONE ELSE

%37

ALONE

WITH SOMEONE ELSE

STAGE 1 'THE RESEARCH PHASE'

STAGE 2 'THE SHORTLIST'

STAGE 3 'THE FINAL SHORTLIST'

STAGE 4 'THE PURCHASE'

51% Family

37%

38% Friends

20%

STAGE 1 'THE RESEARCH PHASE'

STAGE 4 'THE PURCHASE'

THE DECISION STARTS WITH ONESELF, IT’S INFLUENCED BY FAMILY AND FRIENDS, BUT THE PARTNER HAS THE LAST WORD WAS THE DECISION RATIONAL OR EMOTIONAL?

92%

EMOTIONAL

RATIONAL

ARE WE “CUSTOMERS” ALWAYS AS RATIONAL AS WE WOULD LIKE TO THINK?

Winter 2017 THE QUARTERLY

DIGITAL MEDIA

USEFUL APPS FOR TRANSPORTATION A Round-Up of Taxi-Booking Apps for Residents in MENA

Who Are MENA’s Adtech Startups? By Nadine Kahaleh | @91Kahaleh

Today’s advertisers are no longer contented with what traditional advertising has to offer; they were once mad men, however, given the technologies that are transforming their sector, they’ve become math men. Brands have become more inclined into adopting a human-centric approach in their advertising strategies; thus, they’re using the recent ad technologies to support their vision. In fact, the digital media sector has been evolving across the world; we’ve got softwares for measuring campaign effectiveness, tools for automating media buys programmatically, platforms for distributing authentic content, predictive sales and lead generation technologies, and more. On the global scale, advertising technol-

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ogies are giving traditional advertising techniques a radical makeover. Advertisers are shifting their ad budgets to digital channels and Adtech companies, analytics and data are redefining targeted content, ad campaigns and media placements are tailoring advertising messages to their relevant personas, and more. The MENA doesn’t stand laggardly idle in that race, but it’s still very far behind. The region is “snailing” its way from traditional to digital media ad spend, as digital stands at 10%, compared to a big fat 30-35% spend on print, according to Mideast media. The numbers imply that the region is yet to leverage the tools it has at the reach of hand for an optimal advertising conversion; it is missing several opportunities that advertising technologies can secure. In fact, based on Zenith’s “Adspend Forecast

September 2017” report, the MENA region will witness an 18.6% drop in adspend this year, and will not recover from the decline; Zenith estimated that the adspend will plummet 6.3% in 2018, followed by a 0.7% in 2019. Finding Adtech focused startups in the midst of this stale growth has been very challenging, as the region’s ecosystem is gapped by the absence of such stakeholders and is characterized by the strong presence of international players who are behind many acquisitions. Many of the emerging Adtech startups we were able to find had already left the pack, which left us with a very modest number of them. So, without further ado, here are the Adtech startups that caught our attention:

ICONICTION, UAE - LOCATION-BASED & BEACONS AD TECHNOLOGY Established in May 2014, by its founder Sebastien Marteau, Iconiction provides brands and retailers with innovative driveto-store and in-store engagement solutions, using advanced audience modelling, location-based mobile advertising, and beacons technologies. Iconiction enable brands to reach very specific audiences such as affluent HNW tourists and business

travellers via handy smartphones deployed in luxury 4 & 5 stars hotels rooms across Middle East, India and Africa. It monetizes Dubai Airport Taxis Interactive Smart Screens deployed in more than 500 RTA taxis (limousine and standard). Iconiction also enable advertisers to engage with Wi-Fi UAE users across more than 400 locations in the UAE including 35 shopping

malls. Iconiction already has a very diverse customer portfolio across many fields such as retail, advertising, hospitality, real estate, banks & insurance, luxury goods, perfumes & cosmetics companies, mobile network operators, car manufacturers and government organization.

LIVEMAIL, MOROCCO – ADVERTISING TECHNOLOGIES FOCUSED ON EMAIL Established in 2014, by Saad Kemmou, LiveMail is a provider of ad solutions through email in Morocco. The LiveMail Ad Network allows companies to buy advertising on over 15 premium newsletters, just as they would buy normal

display advertising, with a large focus on optimization and targeting. LiveMail developed a CRM Retargeting solution through which users can communicate with their customers through the startup’s ad network. They will be able to reactive

their old customers and prospects, and upsell them. The startup also offers email retargeting. LiveMail’s customers’ portfolio includes YAMAHA, OPEL, Teyara.ma, and others.

RATIONAL PIXELS, LEBANON – DIGITAL PRODUCT PLACEMENT The Beirut-based startup was established in 2015 by Rida Sadek, and it is focused on digital product placement. Unlike display advertising, product placement in movies or videos is unblockable and unskippable, so advertised products reach more viewers. RationalPixels aims

to streamline and facilitate the process, delivering the same results in one sixth of the time. The ad-space inside the video blends and moves with the camera and lighting. This solution is accessible to a wide range of advertisers, and does not require them to have experience in digital

advertising technology. In September 2015, Beirut’s Speed@BDD accelerator injected $30K into RationalPixels – the only funding it has received so far. RationalPixels are currently fundraising and are at advanced stages of negotiations with VCs.

COGNITEV, UAE & EGYPT – AUTOMATED ADVERTISING SOLUTIONS Cognitev, formerly known as MENA Commerce, underwent a major rebranding in May 2017. Founded by Moustafa Mahmoud in 2015, it shifted from ecommerce to a technology company that’s focused on marketing

from a semantic point of view. It is currently raising a $2M round of growth capital, and has offices in Dubai and Cairo. The startup built an automated advertising solution called InstaScaler that helps start-ups and SMEs

completely automate their advertising, as well as AdRelated, a semantic marketing platform that allows marketers to match their ads with engaging content relevant to their business.

DOTMETA, EGYPT – PERSONALIZING THE VIDEO EXPERIENCE Founded in November 2015 by Ahmed Mehessen, dotMETA was one of ArabNet’s Startup Battle - Egypt winners. They believe in the importance of personalized content for an optimized ad performance and increased conversion rates. Having created an adaptive video

platform for content creators; the platform consists of two components, the first one is for used by content creators to upload individual scenes and set the conditions upon which each scenario would play out. The second is an embeddable video player that aggregates user’s data (device data,

metadata, social media data, API, etc.), and therefore generates and plays the video content that is mostly compatible with the audience’s preferences. Users will be able to segment their audience and tailor their content to better appeal to each viewer.

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The State of Venture Capital in the MENA By Rita Makhoul | @Rampurple

More than $900M has been invested in regional digital startups in the last 4 years. With over 100 active institutional investors across the region, MENA has witnessed a significant proliferation of new funding institutions in the past 5 years, with Venture Capital (VC) funds, in particular, capturing the largest percentage of the investor community and doubling in number from 2013 to 2015. We spoke to key investors across the region to get their perspective of the state of venture capital in the region, the major trends, and more.

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IN YOUR OPINION, WHAT IS THE STATUS OF VENTURE CAPITAL IN THE REGION TODAY?

WALID HANNA I CEO I MEVP The status of the VC ecosystem in the region today to be nascent relative to its global counterparts, but with vast potential given upward trending macro factors. Much of the growth in the ecosystem today is driven by improving macro factors within the region: Increasing smartphone adoption, increasing internet connectivity, increasing adoption of cashless financial transactions, growing population of “under 30”/”tech-savvy” cohort. As a result of these improving macro trends, we’re already witnessing growth of the regional ecosystem as investors, both local and international, recognize the potential of startups to capitalize on them. With that said, we do believe the regional technology sector lacks Series B and late stage growth capital. We see international investors reaping the rewards of the opportunity in later stage funding in the MENA region. Such “capital void” highlights a compelling opportunity for MEVP, with the region’s largest VC fund (newly launched MEVF III) to play a significant role moving forward.

FARES GHANDOUR I PARTNER I WAMDA CAPITAL Venture capital is becoming an asset class in MENA that every institutional investor and family office in the region is allocating capital to. When Wamda Capital closed its first fund in 2015, it was virtually impossible to fund-raise for a VC fund in the region outside a few pockets of capital here and there, primarily anchored by DFI's like the IFC who have been bullish on the tech space in the region since the start. The ecosystem historically has depended heavily on individual advocates like Samih Toukan and Hussam Khoury from Jabbar, and of course our General Partner Fadi Ghandour along with figures like Ahmed Alfi in Egypt, Hala Fadel in Lebanon, and others in the region to advocate and seed the ecosystem. This will now change as appeal to the asset class will come from companies that have achieved enough scale to warrant attention in and of themselves. We've gone from a region with ~$200M-$300M in VC in 2015 to ~$1.5B by YE 2018. That is a great opportunity but also puts tremendous pressure on the asset class to perform. We need to effectively create over $15B-$20B in value over the next 10-15 years in order for returns to make sense.

OMAR SATI I MANAGING DIRECTOR I DASH VENTURES From where we stand today, the regional VC scene appears to be self-steered towards growth due to the increase in the number of entrepreneurial initiatives on one hand, and the reshaping taking place in investment mindset on the other. Governments, now taking a more active role in empowering the regional startup sector, is another game changer for VC industry: we believe the indirect effect of increasing the level of comfort, by taking a stake in the game, is also crucial. Earlier in 2016 the Saudi Government pledged over $1.2B to support SMEs and startups through its Riaydh Taqnia fund and PIF (Public Investment Fund) while the Central Bank of Jordan, in collaboration with the World Bank, has pledged $100M to support over 200 innovative start-ups from across the country. All the above being said, it is very important to take the region’s geo-political situation into consideration, which has curbed potential growth on several occasions by limiting the supply of international funds into the regional VC and startup scene.

ABDULAZIZ AL LOUGHANI I MANAGING PARTNER I FAITH CAPTIAL Venture Capital as an asset class is still in its infancy; the asset class hasn’t yet attracted a lot of fiduciary money, as the base is quite low (growing positively though), relative to other developed markets (~$1B AUM compared to ~$70B of AUM in the MENA region).

NAMEK ZU'BI I MANAGING PARTNER I SILICON BADIA VC, and the entire startup ecosystem as a matter of fact, is getting closer and closer to its goal of finding what I call "sustained relevance" in the region. Sustained relevance is only achieved for this asset class when investors (whether the funds themselves, their own investors, other angels/co-investors) start realizing returns on their capital and entrepreneurs and their employees start realizing returns on their blood, sweat and tears. Only then will we go from a "nice to have" to a "must have." We are getting closer.

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WE’VE WITNESSED SUBSTANTIAL INVESTMENTS IN THE REGION DURING 2016 AND 2017. HOW DO YOU LOOK AT ROI AND WHAT DO YOU CONSIDER A GOOD VENTURE RETURN/ROI?

WALID HANNA I CEO I MEVP Financially: MEVP expects to allocate its funds between star companies (10%) that will generate minimum 10x return, solid companies (60%) with 2-3x returns, and failed companies (30%). Star companies usually cover the fund return and compensate for the performance of the remaining investments. Ultimately, we expect to generate a 30%+ return on the fund. Socially: We believe that our investments create direct and indirect jobs with a high multiplier effect and create wealth for the region that can improve local social mobility. MEVP has contributed to the creation of more than 1,100+ jobs since inception. Strategically: We like to invest in businesses where knowledge share, synergies, and partnerships can take place with our other portfolio companies, thus boosting our fund returns across multiple investments

NAMEK ZU'BI I MANAGING PARTNER I SILICON BADIA I like to look at cash-on-cash returns in venture (the public also understands that better). A good performing VC fund typically returns 3X net of fees. So if you think of a fund that might have 10 to 20 portfolio companies, one-third of them will die (the "losers"), one-third will return ~1X (the "money back") and one-third should return 5, 10, 20X to balance the others out (the "winners"). With that being said, given how nascent the industry is in the region, I believe that any scenario that makes people money is a good scenario right now as it continues to inspire belief and also creates "returning entrepreneurs" and historical numbers in other ecosystems is on the side of returning entrepreneurs.

ABDULAZIZ AL LOUGHANI I MANAGING PARTNER I FAITH CAPTIAL Given that there’s probably only one fund that has reached its maturity, we do not have the luxury of comparing different fund vintages in this part of the world. Generally, most direct equity investments made recorded 5-10x at approximately +60% xIRR. Social impact, primarily jobs creation, is not yet mainstream; of all the money being invested, jobs creation remains relatively modest with the exception of the sharing economy taxi app (Careem). We think most of the impact created was around awareness and embracing the modern entrepreneurial mindset. Concepts like lean startup, business model canvas, independent wealth creation and liberalizing our economy are happening everywhere in the Arab World.

HANI ENAYA I HEAD OF INVESTMENTS I RIYAD TAQNIA We think it’s important to take a step back and think about the long-term returns of Venture Capital in a region that’s diversifying away from reliance on oil in an age where technology is transforming every industry under the sun. This situation is extremely relevant to VC because VC is the engine that empowers the growth and scaling of the regional companies that can both lead that transformation of the region’s established industries, but also capture some of the value (know-how, financial…etc) unlocked by those transformations. The alternative is that international companies from outside the region would be the ones capturing these opportunities and the effect on the regional tech industry would be limited. To elucidate with an example, we’d point at a companies like Souq and Careem that have engineering, data, product and other teams in the region as opposed to international tech companies with only sales/marketing/operations offices in the region. The difference between these two scenarios are vast for the region. Every tech giant of this size has a by-product of creating veterans in building high-tech companies that benefits the entire region, not just the company’s shareholders. This is further improved if these companies realize large exits that make tens or hopefully hundreds of these veterans financially capable of starting other companies that themselves continue this cycle of growth. Starting and empowering this virtuous cycle is the higher goal we see encompassing under it vast benefits to the region as well as the best financial returns for current and future funds in the asset class.

CHRISTOS MASTORAS I MANAGING PARTNER I ILIAD PARTNERS At Iliad Partners we target companies that can achieve significant scale and can generate large multiples and financial returns. From there on, as ex-entrepreneurs with an operational background and an active approach, our model is to engage entrepreneurs early on in their journey, well before we seek to invest. This is not only to get to know them and their companies, and do our due diligence over time, but to also support and mentor them to the next stage. We do this directly and via organizations such as Endeavor and MITEF. Having seen the full lifecycle of a MENA startup - from launch to exit - as co-founder and seed investor of GlamBox, I am aware of the pain points and challenges that entrepreneurs face, and can provide them with first-hand advice and guidance. So, beyond the financial return on our investments, we see our relationships with entrepreneurs as strategic and are keen to contribute to their success and to the development of the overall ecosystem.

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WHAT ARE THE MAJOR TRENDS YOUâ&#x20AC;&#x2122;VE SEEN IN THE REGION IN REGARDS TO VC ASSET CLASS? AND WHAT DOES THAT MEAN FOR ALLOCATION TO THE CLASS GOING FORWARD? FARES GHANDOUR I PARTNER I WAMDA CAPITAL There are more funds being raised, covering wider scopes both geographically and in terms of sector. Financing tech startups a few years ago meant finding Levantine or Egyptian entrepreneurs starting their businesses in their home markets, scaling to the UAE, with an eye on KSA. That is no longer the case. The UAE is now the primary hub not only for Arab founders but also South Asians, Europeans, and others who eye the MENA, South Asian, and SSA markets. Furthermore, Kuwait has emerged as a core player in the ecosystem, and KSA will start churning out its own success stories as the ecosystem matures there. The first wave of companies has been in consumer tech, mostly e-commerce, media, marketplaces, and on-demand services. Today, we're looking at a future where Fintech is part of the core MENA tech story alongside consumer tech. The credit gap is the largest globally on a per-capita basis and financial inclusion is a major infrastructural hindrance to the health of the private sector in the region.

WALID HANNA I CEO I MEVP As previously discussed, weâ&#x20AC;&#x2122;re seeing overall improvement in the trajectory of venture capital investment in MENA driven by a population that is catching up the developed world technologically-speaking. Moreover, key verticals are now reaching a point of maturity where exits begin to take place. We believe allocation to the VC class (from family offices, asset managers, etc.) will continue to grow for the foreseeable future as macro trends drive up the value of regional startups, which in turn drives growing number of exit opportunities across the region, which leads to LP investments in existing funds materializing.

ABDULAZIZ AL LOUGHANI I MANAGING PARTNER I FAITH CAPTIAL Over the past 10 years, private sector has taken a lead role in promoting the venture capital asset class, as a few philanthropists and corporates started writing small tickets for promising startups in the Arab World. As some of those companies exited or reached a unicorn valuation, the region witnessed more interest from corporates/family offices and international strategic players to invest in this part of the world. We think that sovereign funds will have the lions share of this asset class once the asset class is ear-marked in the MENA region on their asset allocation strategy.

NAMEK ZU'BI I MANAGING PARTNER I SILICON BADIA The biggest trend I have seen is the entry of traditional players (whether families, corporates) into the scene and their increased desire for exposure to this asset class. This is bringing more money to startups and VCs but the headlines are much more appealing than what is really happening on the ground. In other words, everyone is talking about wanting to be in VC and launching funds etc. but very few are actually doing it/or are too slow.

JASSIM ALHAROON I MANAGING PARTNER I RAED VENTURES More dedicated people to work in this class. Investment tools and methods equivalent to the world standards. More and more corporates are getting in this class.

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WHAT ENABLING COMPONENTS ARE STILL LAGGING IN THE MENA ECOSYSTEM? HOW DO YOU SEE THE CURRENT FUNDED STARTUPS EXITING?

FARES GHANDOUR I PARTNER I WAMDA CAPITAL Cross border scalability, red tape when entering new markets, and access to talent remain to be the overarching challenges for startups in the region. Liquidity will come with scale, and it will come from by way of exits to PE firms or large corporates, be they Asian or Western companies, or even local conglomerates and family businesses. Companies with great enough scale, say above $3B-$5B in valuation, will also look to be publicly listed on a global exchange, but the majority of liquidity to early stage investors will come from selling assets to later stage investors or corporates.

ABDULAZIZ AL LOUGHANI I MANAGING PARTNER I FAITH CAPTIAL The integration of MENA economies is one of the biggest challenges we face in this part of the world. Every country has it’s own laws, rules, regulations, market dynamics, and consumer behavior. The region is not homogenous; every city has its differences from the other. We think that integrating these economies/laws is the long-term goal we should target going forward. Exits to strategics only happened when regional scale was achieved in most startups/exits, higher chances of exits will happen if we’re able to view the region as a ~$3T economy with +250M Arabs.

HANI ENAYA I HEAD OF INVESTMENTS I RIYAD TAQNIA As it’s early in the lifecycle of the industry, we’d really love to see further development into the later stages of startup financing. This includes more funds that can invest in the series-B/C/D bridging the gap between VC and private equity. This also includes more M&A activity in established industries as they realize that investing in technology (e.g. through acquisitions of startups in their space) can give them a much needed edge against their competition.

OMAR SATI I MANAGING DIRECTOR I DASH VENTURES Legal and regulatory infrastructure is as equally crucial for the development of the industry as bridging the financing gap. Relevant aspects that are still challenging involve taxation, licensing, intellectual property and commercial legislation. That said, it’s worth mentioning the legal and regulatory easing undertaken in the UAE through DSFA and ADGM in addition to the building blocks the Central Bank in Jordan has been establishing to modernize bankruptcy and insolvency benchmarks for Fintech companies. Though the number of accelerators and VC’s have increased over the past few years in the MENA ecosystem, there still lacks a focus on entrepreneurial education at a grass roots stage. In the U.S specifically, students are taught in high school and university to try, fail, and try again as a means of learning. However, in our part of the world, there is still a large stigma around failure.

CHRISTOS MASTORAS I MANAGING PARTNER I ILIAD PARTNERS The MENA startup ecosystem is nascent but has come a long way in the last few years. It is only natural for this to take time. The support system around startups is now developing at a faster pace - funding, incubators and accelerators, mentorship, and all the pieces of the puzzle are coming together gradually. The range of exit options are expanding: global players seeking to expand their footprint to MENA and local groups seeking to digitize and access innovation, both via acquisition as well as via a now more active secondary market. We have seen some significant activity in recent years such as the acquisition of Souq.com by Amazon, and Fetchr raising the largest Series B round in MENA thus far led by Silicon Valley-based VC New Enterprise Associates (NEA).

JASSIM ALHAROON I MANAGING PARTNER I RAED VENTURES I would say 1) government regulations; and 2) profit oriented Accelerators.

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WHAT PREDICTIONS DO YOU HAVE FOR THE NEXT COUPLE OF YEARS?

FARES GHANDOUR I PARTNER I WAMDA CAPITAL Fintech will continue to approach center-stage for many investors. We'll also likely get an exit above $1B, another 2 above $100M, and a few smaller ones here and there as well. Saudi will continue to open up for foreign businesses and the amount of financing towards Saudi-first startups will over-take financing towards the entirety of the remainder of the region combined, at least at the Seed and Series A stage.

WALID HANNA I CEO I MEVP We predict a growth of Series B funding, as the current Seed/Series A stage companies require further funding to scale. The key booming sectors, such as Fintech, E-commerce, New Media, and FoodTech will realize further growth and exits, while additional verticals begin to catch up. We see Artificial Intelligence and Blockchain technologies as the cutting-edge of venture capital moving forward, so a vast opportunity exists for the startups that can incorporate these technologies in a manner that brings value to the masses.

OMAR SATI I MANAGING DIRECTOR I DASH VENTURES The bourgeoning regional VC landscape and the increased activity of regional funds investing internationally, are expected to elevate the region’s visibility and exposure as a genuine innovation hub as well as further fuel the startup scene, particularly, entrepreneurial initiatives. Based on our opportunity database and pipeline this year we are seeing more AI, Blockchain and SAAS enabled marketplaces. The space remains early and underdeveloped, yet we expect more of these opportunities to be backed by VC firms in the short-term as monetization methods and commercial applications are more apparent and comprehensive. E-commerce is also making a comeback with a shift towards vertically-integrated, direct-to-consumer online brands where there is full control over the supply chain with more specialized offerings. Finally, we believe there is an opportunity for the region to make it’s mark on the blockchain revolution. Innovation hubs outside of the US, such as China, India, Korea and the UAE, are making significant strides in pushing blockchain forward. We have a real chance to be at the center of this revolution and play a crucial role in the efforts to bring blockchain to the masses.

CHRISTOS MASTORAS I MANAGING PARTNER I ILIAD PARTNERS The expanding range of success stories and exits is expected to attract more capital allocation to the VC asset class, and we’ll likely see more funds and larger funds emerge to complement existing players. Within this context, in the future, we expect to see more innovation emerge from the region and MENA startups that can scale and compete beyond MENA in global markets. This will be facilitated by increasing technical talent, governments such as Dubai making innovation a priority, and corporates seeking to access innovation among other things. We are already seeing initial evidence of this, and we hope to see more home-grown innovation in the future.

NAMEK ZU'BI I MANAGING PARTNER I SILICON BADIA Continued growth across the board. More funds, more capital, more companies, more exits, more failures - and a lot of fun.

JASSIM ALHAROON I MANAGING PARTNER I RAED VENTURES I am expecting to see more investment been injected into the tech scene. Regulations will be more welcoming. The region will take its position as connecting hub between the east and the west.

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ACQUISITION SPOTLIGHT: CARRIAGE By Rita Makhoul | @Rampurple Carriage is a food-delivery service in Kuwait that offers delivery from registered restaurants, many of which don’t usually deliver, with live tracking of orders. Abdullah Al-Mutawa, owner of The Stack restaurant and Founder of Carriage, came up with the business model after he wanted to start offering a delivery service for his restaurant and realized how hassling and expensive it would be to set up. Earlier this year, online food takeaway firm Delivery Hero, which sources have said is considering a flotation imminently, acquired Carriage for a disclosed amount of $100M. This is the highest IRR in the region to date. Carriage had received a seed capital fund of $1.3M in January 2016 to kick-start the project, and Kuwaiti investors increased the funding again last May. Delivery Hero operates in 53 countries internationally in Europe, Asia, Latin

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America and the Middle East and partners with over 300,000 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. During ArabNet Kuwait 2017, I sat down with Abdullah Al Mutawa, Co-Founder and CEO of Carriage to discuss Carriage’s journey, the acquisition, and upcoming plans. Where did the idea of Carriage come from? What gap did you want to fill? Carriage first started when I had a restaurant. Once I opened the restaurant, I realized that the delivery arm is quite critical. The easy decision at the time was to join the existing platform market that was there, which was Talabat.

We sat down with one of the owners of Talabat at the time, and my question to him was where could we get the logistics support for the delivery aspect. His response was that they purely are a market place, that they divert the order from the customer to the restaurant, and the restaurant takes care of the delivery. That’s when the idea just clicked. I felt there was a gap in the market. It’s a pain point when you’re talking about labor-intensive endeavors, and having drivers and vehicles and maintenance towards that, it's a huge capital-intensive endeavor. I wasn’t aware that the business model exists worldwide until we conducted some research and we learnt that the business model does exist and has been proven successful, yet that it has not been implemented in the region. So we got the idea, and sat down with our other cofounders, Musab Al Mutawa, Khaled Al Qabandi, and Jonathan Lau, each working

within his expertise, and we went full steam ahead to develop and operate our idea. Why do you think Carriage became such a success? We were just at the right place at the right time and we managed to pay attention to every single detail related to the service that we’re providing down to the sentence said to the customer. Little tweaks we did in our services helped gain traction and customers. We also innovated within the space, we managed to see what were the customers’ and restaurants’ pain points and we managed to capitalize and build on that down to the t. For example, one of the biggest issues customers had was when they ordered, they got the order whenever they got the order, however, at Carriage, we provide full transparency of the order process from the ordering place, down to it being prepared, down to it being collected by the driver, and then delivered and live tracked. Carriage was who introduced the live tracking feature to the food sector in Kuwait specifically and in the GCC. We managed to innovate within the space and that’s actually what made us gain amazing traction and customers right off the bat. What challenges did you face? There were a lot of challenges, which included talent. One of the biggest challenges we faced was getting the right talent and getting them in the right position and place. Talent is non-existent in the tech sector here, especially when it comes to new languages in terms of coding. The tech infrastructure has been stagnant for quite some time and we haven’t seen a lot of innovation in that sense, however, we managed to overcome this challenge. Another challenge was to raise our seed round in order to go full speed ahead. For us, its winner takes it all, and we did not want to hold back in any sense. The idea of raising a seed round was especially new to investors – we managed to raise seed funding before becoming operational and we managed to have people who were interested in the idea and decided to invest. These are some of the challenges we faced pre-operations.

Post-operations it was just managing the service level we were promising the restaurants, it was one of the toughest challenges, trying to maintain the service level while scaling was also a challenge that we managed to overcome. I would imagine customer acquisition would have also been a challenge since when you launched, Talabat had been in the market for 13 years prior to your launch and had a large customer base. Was customer acquisition and signing up restaurants a challenge for Carriage? A lot of people perceive restaurants that deliver as low-end restaurants. We managed to change that mentality by initially attracting restaurants that never delivered before, and only the best in terms of restaurants. We managed to get restaurants which people had grown accustomed to wait for their table at the restaurant for a duration of half-an-hour to an hour. By selecting the right restaurants, along with the features Carriage provided, we created a buzz. Moreover, we educated the restaurants that delivery does not have to only be for lowend restaurants, but that it’s also a revenue stream that they should be tapping into, and we managed to prove that to them. The initial 18 restaurants that we launched with are what attracted the rest of the restaurants and are what acquired the customers. One of the challenges many startups face is scaling to other markets especially when dealing with bureaucracy. Carriage has managed to expand to 4 markets during the past 17 months. What was the process/ difficulty in expanding to those new markets? We are in 4 markets at the moment, and in a few weeks we will be in our 5th market – Saudi Arabia. Each market has it own set of challenges but we were very focused and keen on getting local talent in each market. I think that was the most important aspect. Although the GCC is our backyard, yet each market has its own way of operating and its own ins and outs. One of the most important things we had to think about was acquiring local talents, and a local GM to hire a local team, in each country in order

to overcome the learning curve compared to hiring someone from abroad. In terms of bureaucracy, bureaucracy exists everywhere, it’s just there, and you just have to understand and figure out how to expedite the process, but I’m keen on emphasizing that local talent was our savior in each country. Have you noticed a difference in customer behavior in every market you’re in? And has that been a challenge? Consumer behavior is more or less similar since at the end of the day it’s food and people want to eat. What differs is the purchasing power in each market, and each market has its challenges, for instance in some markets they don’t use addresses like we would in Kuwait, rather they use locations and pinpoint locations. Therefore, in terms of consumer behavior itself it’s quite similar, but in terms of purchasing power, operations, these were things we needed to learn and overcome. In regards to acquisition, I’m aware that due to a NDA, there’s quite a lot of details you cannot share with us, but what can you disclose to us, what does it mean for Carriage, and how does it affect Carriage today? Let me start off by saying, it was a long and tedious process. What is disclosed is the cash component of the deal, which is $100M, however, things that are related to post cash upfront, are things that cannot be disclosed. It was a very interesting process for us, and we positioned ourselves to be an attractive acquisition target. We were trying to find innovative ways to ‘annoy’ the existing player in the market. You have to be aggressive. The nice thing is that initially you’re a very small team, you’re very nimble, you want to pivot a lot, you want to make sure that you’re doing the right thing. The way we started it’s not the same way we were 3 months, 6 months, or a year after we started operating. You need to pivot, and you need to adjust according to feedback and according to the market. So it was quite an interesting journey for us but one of the other things that I think triggered or helped position us as an attractive endeavor was innovating within the space that the existing player

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had, and one of the things we did that

was very critical for consumers was live tracking. It also was a sales game while we were trying to attract restaurants from the existing player. All of these things positioned us to be attractive for an acquisition. Is there anything that’s going to change at Carriage due to the acquisition? Yes, To the better of course! It was essential for us to retain management even though we sold 100% of our shares. From the founders’ team and the whole team at Carriage, I feel like each and every one of us feels like they are a critical part of the company. All of our names are attached to it, we wanted to make sure that we don’t just let go of the company easily, we wanted to ensure that we maintain our promises and expand on our promises and expand regionally. Why after just 15 months of operations, would Delivery Hero come in and acquire Carriage for such a large sum? Especially since you weren’t seeking an exit at this stage? Any ecommerce platform that is out there has the end goal to either IPO or exit. I honestly did not expect it this soon. The acquisition came at a time when were going after our series A round, and we had just launched our first international market, which was Bahrain. We were going after our series A round to expand both locally and regionally so we started going into these negotiations when we started talking to investors, and they saw that the numbers made sense, our cohorts were amazing and it was just very attractive to them and added value to their existing markets. When you talk about the MENA region specifically related to food, you’re talking about one of the biggest markets worldwide, not just regionally. MENA is a very attractive market, not just for Delivery Hero, but for any food related companies or endeavors. You’ve also recently added another service, which is flower delivery. May you share more about this service, and are you planning on adding more vertical services? Will this only be offered in Kuwait or in all your existing markets? 44

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Kuwait is an experimental country for us. We understand the market really. We’re from here so we truly understand the market. The reason we launched our first vertical, which is flowers, is because we are an ‘urban on-demand logistics company’ and what that means is that generally speaking, whenever you order anything online, it usually takes between 2 to 4 days to deliver, so there are a couple of points.

1. What we’re trying to go for is not a million SKUs; we’re going after speed rather than quantity,

2. We’re bridging the gap between

online and offline. There are multiple existing retail shops, flower related, food related, etc. that would love to be part of an online platform that already has network effects and has a customer database,

3. We wanted to fill the gap of not

having to wait for your deliveries. When talking about flowers for example, you’re talking about certain hours when you receive your delivery, meanwhile with us it’s on-demand, you get it in an hour, if not less – at the moment we’re averaging 42 minutes for food deliveries which we will hopefully also be lowering.

People care about speed and when they want to order something, they want to receive it immediately, and this is one of the reasons why we introduced it. Another thing is that the infrastructure already exists, our logistics infrastructure exists, our tech infrastructure exists, and we just want to go full on in terms of innovating within every space that wants to deliver. Essentially what we want to do is be a one-stop shop for anything and everything that can be delivered. This basically means you will be introducing more services and competing with additional players in the market. First it was Talabat, today it’s Bleems, if you were to add laundry you’d compete with JustClean, etc. How do you plan on tackling the competition in

all those spaces? It’s all about the services you provide. I believe what we provide in terms of quality of service and tech solutions, is not provided by anyone else. No one delivers within the hour, no one delivers in less than 45 minutes, and this is something we’re going full on with. I also believe that competition is healthy, competition is healthy for us, as in Carriage, and for other players in the market, and it just keeps every single company innovating within the space they are in. What advice would you give to up and coming startups and aspiring entrepreneurs? We are in a region of opportunities. There are so many opportunities that have not been tapped into and specifically in the tech sector, everything is trying to be developed with a tech solution globally, and I think we’re an underdeveloped in terms of tech solutions, whether it’s in health, or entertainment, or any sector. There’s also room to innovate. What I always like to say is innovate but don’t replicate what already is existent in the current market.

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MENA REGIONAL FUNDING INSTITUTIONS

LEBANON

BAHRAIN •500 Startups •Bahraini Women Development Portfolio Fund •C5 Accelerate •Rowad Funding •Seed Fuel •Tamkeen •Tenmou

•B&Y Venture Partners •Berytech Fund •Cedar Mundi •Daher Capital •Flat6Labs Beirut •IM Capital •Kafalat iSME Programme •Leap Ventures •Lebanese Business Angels (LBA) •Lebanese Women Angel Fund •Middle East Venture Partners (MEVP) •Phoenician Funds •Saned Partners •Y Venture Partners

JORDAN •DASH Ventures •Hikma Ventures •iMENA Group •MENA Venture Investments (MVI) •Oasis 500 •Propeller Ventures •Seed Equity Venture Partners •Silicon Badia

KSA •Al Tayyar Capital •Cedar Bridge Partner •Inspire Ventures •KAUST Innovation Fund •Malaz Capital •Mobily Ventures •Oqal •Raed Ventures •Riyadh Taqnia Fund •SIRB Angel Investment Network •ST Ventures •STC Ventures

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KUWAIT •Arzan VC •Faith Capital •Impulse Kuwait •KISP Ventures

EGYPT •A15 •Accelero Capital Investments •Algebra Ventures •Cairo Angels •Delta Inspire •El Swedy Investments •Endure Capital •Ideavelopers •Innoventures •Kamelizer •KI Angels •Sawari Ventures •Tamkeen Capital •Vodafone Ventures Egypt

MOROCCO •Atlas Business Angels •Impact Lab •Innov Invest Funds •MITC Capital (Maroc Numeric Fund) •MNF Angels •Outlierz Seed Fund •Réseau Entreprendre Maroc

OMAN

UAE •500 Startups •Abraaj •Al Tamimi Investments •Alabbar Enterprises •Arzan Capital •BECO Capital •Crescent Enterprises •DHx (Dubai Holding) •Dubai Angel Investors •Dubai Silicon Oasis •Emerge Ventures •Envestors MENA •Glowfish Capital •International Finance Corporation (IFC) •Iliad Partners •Jabbar Internet Group •Jisr Venture Partners •Levant Capital •MBC Ventures •MENA Venture Investments (MVI) •Middle East Venture Partners (MEVP) •Precinct Partners •Samena Capital •TURN8 Innovation Fund •Twofour54 •VentureSouq •Wamda Capital •Womena

•Ethmar •Oman Investment Corporation (OIC) •Oman Investment Fund (OIF) •Oman Technology Fund (OTF)

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KSA INNOVATION ECONOMY TECH STARTUPS 2017

Saudi Arabiaâ&#x20AC;&#x2122;s Vision 2030 and the National Transformation Program (NTP) 2020 have set ambitious objectives and targets for shifting Saudi Arabia from an oil-dependent economy to a knowledge-based economy. Numerous initiatives in technology, entrepreneurship, and digital innovation are being rolled out - from job creation, capacity building, establishing updated regulatory frameworks, and supporting SMEs, to accelerating, incubating, and investing in startups. Saudi Arabia, recognizing the significance of fostering an environment conducive to developing the role of small and medium enterprises (SMEs), is focusing on job creation and stimulating economic growth. Under Vision 2030, Saudi Arabia intends to increase the contribution of SMEs to the GDP to

THE QUARTERLY Winter 2017

35% by easing access to funding. The Kingdom is also encouraging financial institutions to allocate approximately 20% - as opposed to the previous 5% - of overall loans to SMEs. Further plans for stimulating the SME sector involve championing a larger supply of skilled talent while increasing female participation in the workforce. Thus, one of the central steps in supporting SMEs was the formation of a Small to Medium Enterprises General Authority (SMEA). The main objective of this authority is to review regulations, remove any challenges to accessing finance, and help startups and SMEs by marketing their ideas, products, and services. The authority also focuses on extending support services through incubators, training centers, and venture capital funds.

In its most recent initiative, the SMEA launched HUB1006 to advance entrepreneurship in the country. HUB1006 intends to offer SMEs, entrepreneurs, and startups access to professional and legal services, workspaces, venture capital, and government services. The hub, established in King Abdullah Economic City, aims at enabling startups to scale their ventures while decreasing bureaucratic obstacles. This report is designed for anyone interested in investing in the Saudi Arabian tech startup scene, interested in supporting or launching an incubator, accelerator, or mentorship program, and interested in the entrepreneurial ecosystem in Saudi Arabia in general.

A TRANSFORMATIONAL ECONOMY THE STUDY: OBJECTIVES AND METHODOLOGY

FIGURE 1. THE DISTRIBUTION OF RESPONDENT PROFILES This research focuses on measuring perceptions of Saudi Arabian tech startups on the challenges facing the entrepreneurial ecosystem. The study aims to highlight the gaps and strengths of the ecosystem. The results of the report will help vested stakeholders make informed decisions in their investments, programs, and projects. The research targets owners of technology and digital startups based and registered in Saudi Arabia, including both equity and non-equity based startups. The sample is comprised of respondents who are startup founders, co-founders, partners, and employees with equity. Respondent profiles reveal that majority of the surveyed are dominated by male participants (80%). Half of all surveyed are mainly in the more mature age bracket of 31 years to 40 years old (49%) suggesting that the sample constitutes serious entrepreneurs. More than half of the surveyed respondents (58%) are the founders of the startups. AGE 41+ years

POSITION

GENDER

5% Female

49%

40- 31years

Male

30- 21years

Partner

Co-founder

33 %

Founder

58 %

20%

80%

44%

Under 20years

[Base: 55]

OVERALL ECOSYSTEM STRENGTHS AND WEAKNESSES

FIGURE 2. RANKING ENTREPRENEURSHIP ECOSYSTEM DOMAINS A quick look at this figure highlights the two biggest impediments that roughly five of every seven tech startups face: access to funding (71%) and difficulties in locating local Saudi Arabian talent (71%). Half of the startups surveyed claim technological infrastructure (48%) as a positive aspect of the ecosystem, while a quarter of the startups identify attracting new business (26%) as a strength. VERY HARD/VERY LOW

Ease of securing funding

47%

Ease of locating local talent

24%

38%

Level of support

16%

31%

27%

22%

12%

16%

33%

27%

Attracting customers/businesses

Availability of infrastructure

VERY EASY/VERY HIGH

21%

16%

31%

24%

13%

18%

21%

27%

Axis Title [Base: 55]

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ACCESS TO FUNDING

FIGURE 6. SOURCE OF TECH STARTUP FUNDING Aside from angel networks, tech startups in Saudi Arabia remain mainly dependent on non-equity funding, whereas over half depend on personal savings (56%). Saudi Arabian tech startups are not leveraging their access to equity funding and approximately one out of every ten startups are dependent on non-equity sources, such as competitions (11%) and bank loans (11%). When it comes to equity funding, one fourth are angel networks, which is by far the most popular venue for financing (24%). Meanwhile, one out of every ten startups access accelerators (11%) as a source of equity funding. These findings reflect, first, the challenge of raising equity in Saudi Arabia and, second, a possible cultural aspect of being accustomed and more familiar with non-equity sources. This is a clear market opportunity for both accelerators and venture capital funds. Source of Funding

56%

Personal savings

NON-EQUITY FUNDING

Competition money

11%

Bank loan

11%

Crowdfunding Grants

5% 4% 24%

Angel network

EQUITY FUNDING

11%

Accelerators

Venture capital Other sources Never raised funds

7% 5% [Base: 55]

FIGURE 7. TYPE OF SUPPORT SERVICES AVAILABLE TO TECH STARTUPS In line with the findings of the access to funding figures, more than half of both equity and non-equity financing (55%) are the services with the biggest gap in the ecosystem. The next set of support services that display a gap - of around one third - include mentorship support (such as legal and accounting advice (36%), networking with potential clients (35%), and go-to-market strategy (29%)) and hard skills support (such as product development/prototyping (29%) and technical assistance (29%)). The services with the least amount of ecosystem gaps â&#x20AC;&#x201C; around one third - include essential, yet basic, services such as business skillsâ&#x20AC;&#x2122; mentorship and training (33%) and the availability workspace (31%). The gap analysis of support services highlights clear opportunities for funds, mentorship programs, and hard skills training initiatives. Support Needed

Monetary Support

Support Received

Equity & non-equity financing

Hard Skills Support

Technical assistance

Talent Support

Identifying & hiring talent /talent development

Hard Skills Support

Product development/prototyping

Mentorship Support

Legal & accounting advice

Mentorship Support

Networking

Mentorship Support

Go-to-market strategy

Mentorship Support

Advice on proof of concept /product market fit

Infrastructural Support

Work space

Mentorship Support

Mentorship & training on business skills Other

Other None of the above %60

%40

Support Services Needed

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%20

Support Services Received

%20

[Base: 55]

%40

%60

ACCESS TO TALENT AND TECH SKILLS

FIGURE 9. AVAILABILITY OF SKILL SETS The most available skill sets – approximately one half - are the more traditional business skills. Marketing, media, and communication skills rank as the most available at 55%. As skills begin to require more technical based knowledge they begin to display a lower prevalence, such as development and coding (11%), product design (7%), data and analytics (2%). Skill Sets Available

55%

Marketing, media, & communication

47%

Accounting & finance

44%

38%

Creative/graphic design

31%

Sales & business development

20%

Hardware & IT

18%

Operations Development/coding

11%

Product design

Data & analytics

None of the above Other

9% 2% [Base: 55]

ACCESS TO MARKETS

FIGURE 7. TYPE OF SUPPORT SERVICES AVAILABLE TO TECH STARTUPS Approximately two fifths of surveyed startups state the need for support of pull marketing, such as influencer reviews (47%) and wordof-mouth/referral communication (34%), to play a key role in acquiring new business. Financial considerations reflect two fifths of the support needed to attract new business, such as marketing and sales budgets (43%). Although investors promoting tech startups’ products/services (13%) scores low on the support needed scale; corporate willingness and openness to use startups’ services ranks high at 40%. Top Influential Factors

21%

Budget to market products/services Openness of businesses to using startup services

10%

Access to corporate decision makers

10%

27% 19%

15% 19%

16%

Investors promoting startups' products/services

None of the above

22% 30%

Word of mouth/referrals

Better distribution channels

32%

15%

Influencers reviewing products/services

Export promotion & sales

Other Influential Factors

8% 14% 19%

Other [Base: 55]

[Base: 52]

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10 MENA To Keep On You Radar

Paul Gadala | @paulinbeirut Every quarter, ArabNet brings you a list of top MENA startups to look out for. In this edition, we have selected a wide range of startups that include everything from automated investment platforms, to new payment platforms, to educational focused startups, and more.

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that combines investment strategies and technology in order to get diverse, highly personalized investment portfolios.

Sarwa is the UAE’s first hybrid automated investment management platform for young professionals in the Middle East

People seeking to delve into the world of finance can easily sign up, state their personal financial goals, and receive a personalized portfolio based on what kind of investor the customer is, their financial situation, and their risk profile. The platform has a clean and simple interface for people to track their investments and receive reports on the growth of their portfolios, and even features advisors that can offer personal advice for any questions or concerns.

to create, modify, and execute automated command-based bots without any coding or technical experience in just 10 minutes. The framework provides a wide array of intelligence services, including AI modules that allow users to give their bots a unique personality in order to interact smartly with customers and maintain conversations through complex dialogs and interactions. Founded by Mohamed Nabil, WideBot is the first bot builder platform in the MENA region. The startup allows users

Widebot’s first product is Menu Maker – a bot builder that allows any restaurant to build its own personal Facebook Chatbot and presents a full solution that simulates

robotics, something not widely taught in the region.

Cherpa is a software solution hailing from Lebanon that manages and organizes how robotics and electronics classes are taught in universities and schools and aims to make teaching robotics fun and inclusive for children, through games and other interactive challenges that include coding and virtual missions. Cherpa is the first in Lebanon to bring AI to the classroom and also instructs students on

Cherpa uses a chatbot that acts as a virtual instructor and guides the users (mostly young students) through the entire coding journey. Students begin by selecting one of the many available subjects: astronomy, medicine, agriculture, etc. and are then given an overview of the lesson with its learning objectives before building and coding a physical circuit. Ibrahim Ezzedine and Basel Jalalledine, who were roommates together at the Lebanese American University and started the university’s robotics club, founded Cherpa. Cherpa has participated in several startup competitions including

Founded by Mark Chahwan and Jad Sayegh, Sarwa was one of two Dubaibased startups that were chosen, along with 10 other startups from around the world, to be part of the Dubai International Financial Centre’s FinTech Hive Accelerator. Chahwan and Sayegh have stated they have raised funds through investors and capital venture firms and are hoping to gain more investors in hopes of reaching the mass market. Country: UAE Launched: 2016 Category: Fintech

the food ordering process. In October, WideBot were selected as the best startup at Seedstars Egypt, where they won the chance to participate at the Seedstars Summit in April. Earlier this year, the startup also participated in ArabNet’s Startup Battle in Cairo where they won first place, and then went on to compete at the ArabNet Startup Battle in Dubai where they came in third.

Country: Egypt Launched: 2016 Category: Chatbot

SpeedBDD’s 4th Demo Day, where it won $50K, and was also selected for LebNet’s Ignite acceleration and mentorship program in Silicon Valley. In the past 3 months, Cherpa has launched the coding section for its Beta testing, converted 70 of the 100 test users to paying customers, qualified as semi-finalists in MITEF’s Pan Arab Competition, and is currently looking for $250K in funding. Country: Lebanon Launched: 2016 Category: Education

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for stadium) is an app that helps football enthusiasts find and book football fields for matches and practices. The app also allows users to join matches in their local neighborhoods, form teams, and interact with other football enthusiasts via the app.

Founded by Ahmad al Rawi, Malaeb is a Bahraini app for avid football players. Launched a year ago, Malaeb (Arabic

With an estimated 3.5 billion fans around the world, football is the world’s most popular sport. Although there are similar apps in Britain and Ireland, Malaeb is the first of its kind in the MENA region.

English and audiobooks available in her native tongue and wanted to bring books to the smartphone generation.

Dhad is an Arabic audiobooks producer and publisher hailing from Saudi Arabia and was founded by Manar Saud Alomayri who realized there was a major gap between audiobooks available in

Evey is a Tunisian web and mobile social platform that helps communities and organizations make decisions with real time votes/surveys and a combination of automated data analytics and social network mapping.

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Dhad went through incubation at the Badir Program Technology Incubator and formally launched in 2014. Its main competition in the realm is Dubai-based Arabic audiobook startup Booklava App and Amman-based Jamalon.

At ArabNet Kuwait, CEO Omar Christidis shared news about Malaeb’s first seed investment of $100K by Saudibased VCs and 500 startups. The app is currently available on both IOS and Android and so far includes 30 football fields across Bahrain. Malaeb’s CEO has mentioned that the app will expand to Saudi Arabia in the near future. Country: Bahrain Launched: 2016 Category: Sports

Frankfurt Book Fair. The startup has even recruited popular narrators like Dr. Ali Abo Alhasn to narrate some of the books to gain more traction. Although the majority of Dhad users are based in Saudi Arabia, its reach has extended to Europe, North America and Asia, serving Arab expats seeking Arabic content abroad.

However, Dhad is ahead of its competition as it has exclusive deals with 18 Arabic publishing houses and has even had audiobooks make it all the way to the

Country: Saudi Arabia Launched: 2014 Category: Audiobooks

Founded by Maher Hanafi and Noomen Lahimer in 2016, Evey aims to create more connectivity between audiences through news. The platform allows people to hold surveys/polls in real time and give the pollster a plethora of data and social network mapping. Their ultimate goal is to build participatory democracy in communities around the world.

American elections that went viral. They went on to compete at Seedstars World and graduated from the Tunisian branch of Silicon Valley’s Founder Institute. In November, Evey exhibited in the Smart City Expo World Congress alongside Bizerte Smart City in Barcelona and showcased some insights on the technology they are building to empower citizens and help cities build stronger and smarter bridges with people.

Last year, Evey made headlines by winning the Tunisian leg of Seedstars and even created a popular poll about the

Country: Tunisia Launched: 2016 Category: Data Analytics

Co-founded by Naser Al-Qatami and Mohammed Alkhazal, Orddr is the first B2B platform for the food industry in Kuwait. The platform connects food suppliers to hotels, restaurants, cafes, and commercial buyers with the ultimate goal

Vapulus is Egypt’s latest payment solution that connects users directly to all global key payment methods, allowing businesses to accept payments and grow their customer base online, in-app, and in store. Vapulus’ comparative advantage is that a person can send and receive money,

of helping businesses on both sides to cut costs.

receive payments, and track reports and receive feedback.

Orddr helps restaurants and small businesses side-step any suppliers that might be running a monopoly to find smaller suppliers or suppliers that have a certain niche, and can literally help them connect with an entire supply chain. For suppliers, the benefits are immense; they can advertise bulk prices, give quotations to buyers, post photos of their products,

So far Orddr is only available in Kuwait, but big things are on the horizon as they won this year’s ArabNet Kuwait’s Startup battle, beating 4 other Kuwaiti startups.

pay their bills, and even use it to pay in a local store with just a user name which helps people avoid having their financial credentials at risk. The app even has a GPS system that allows cashiers to detect if someone with the app is approaching which helps speed up the cashing out process.

Abdelrahman Elsharawy has great ambitions for the company, and aims to raise another $3M in investments as well as grow the startup into the biggest e-payment gateway in the MENA region. Vapulus is currently looking to open offices in Bahrain and the Netherlands in hopes of expanding to the Gulf and European markets.

In September, Vapulus received a $250K seed investment from Arabian Venture Capital and reached the final stages of negotiation with three major banks in Egypt. CEO and co-founder

with interior design professionals and was founded by techie Anas Elayyan along with two of his cohorts who are architects.

Jordan’s latest startup speaks to the homeowner. Darpedia, a combo of Dar (a house in Arabic) and encyclopedia, is a platform connecting homeowners

According to the Food and Agriculture Organization of the United Nations, property is considered the most valuable asset in Jordan and therefore Darpedia holds a large amount of potential. Traditionally finding good suppliers and designers in the Arab World is

Country: Kuwait Launched: 2017 Category: Food

Country: Egypt Launched: 2016 Category: Fintech

often just based on word of mouth. However, Darpedia goes beyond just connecting homeowners with interior designers; it also connects them with other types of designers and suppliers, giving homeowners a marketplace of professionals to choose from. 3,000 interior and exterior designs are already available on the platform. Darpedia is the first service of its kind in Jordan and has already raised $200K

Winter 2017 THE QUARTERLY

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from angel investors which will go towards expanding their online reach and bringing more professionals on board. Although there are startups in the GCC like Nabnee or Lebanonâ&#x20AC;&#x2122;s Moodfit that

also connect homeowners to designers, Darpedia connects people that work on all aspects of home design and also features a wide catalogue of different design styles to choose from.

in the region compared to international competition.

Saudi-based Foodics is a cloud-based iPad POS and restaurant management system for transactions, inventorykeeping, employee scheduling, loyalty programs and e-commerce. The startup also helps cut costs as the startup sells both the hardware and offers customer service, and is also unique in that it is done in Arabic, giving it a huge advantage

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Founded by university friends Ahmad Alzaini and Musab Alothmani, Foodics holds the advantage of being used by any type of restaurant, from food trucks all the way to large restaurant chains. The startup also boasts 24-hour support and a wide range of data analytics for restaurants. Incubated by Badir Technology Incubator in 2015, Foodics were picked by Forbes as one of the 50 most promising startups in Saudi. Now, two years later, 100 F&B brands in Saudi and the Emirates are using Foodicâ&#x20AC;&#x2122;s management system and

Country: Jordan Launched: 2017 Category: Interior design

the company already has a team of 52 and offices in Riyadh, Jeddah, Khobar and Dubai. Foodics are also hot off the heels of a $4M investment round led by Raed Ventures, Riyad Taqnia Fund and Saudi Venture Capital with the participation of Neseel Holding and 500 Startups Fund. The money will go towards hiring R+D staff, data science, AI experts, and expanding globally starting with Europe. Country: Saudi Arabia Launched: 2014 Category: Food

E-BUSINESS SKILLS GAP THREATENS SUSTAINABLE GROWTH 2017 REPORT

ArabNet and Notre Dame University investigate the skills gap affecting digital business in the MENA region, focusing mainly on Saudi Arabia, United Arab Emirates and Lebanon. It will present necessary insight for business owners, managers, employees, job-seekers as well as educational institutions to approach the skills gap crisis in the most effective way.

BEIRUT 2018 THE LONGEST RUNNING DIGITAL EVENT IN THE LEVANT