The Rising Startup Ecosystems

seedstars.com

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THE RISING STARTUP ECOSYSTEMS IMPACTING PEOPLE'S LIVES THROUGH TECHNOLOGY & ENTREPRENEURSHIP

THE RISING STARTUP ECOSYSTEMS

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THE RISING STARTUP ECOSYSTEMS

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They tried to bury us.

They didn’t know we were seeds.

- Mexican Proverb

An idea born in Switzerland seedstars.com 3

THE RISING STARTUP ECOSYSTEMS

* MESSAGE FROM ALISEE Alisée de Tonnac, CEO of Seedstars World, the exclusive startup competition of Seedstars

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It took the world over 100 years to get to a billion telephone users, but less than 10 years to get to a billion smartphone users.

So if you ask me why I believe in the power of technology, I’d say because technology elevates the lives of those who had no chance of accessing the basic human needs and does this at an unprecedented speed.

It provides access to education, health, jobs, and endless opportunities that can elevate these people’s lives, and those of their families and communities.

In emerging markets today, people l i ve w i t h o u t t e l e p h o n e p o l e s a n d desktop computers, because mobile phones allowed them to leapfrog these technologies, thus allowing them to directly access modern and more efficient solutions. For developing economies, this is not only more cost efficient, but also more productive. Increasingly, more and more people are able to run most of their everyday tasks using mobile phones. They use SMS to pay for public transport, worldclass education or to receive vital health information, all of which can drastically improve the quality of their lives. And I can’t wait to see the leapfrogs that will emerge in the sectors of energy and food, for example.

consumers, opportunities and connected citizens. In the next 4 years alone, nearly half a billion people will come online for the first time. Venturing a bit further into the future, by 2020, 8 out of 10 smartphones will be located in emerging markets. And by 2030, nearly 9 out of 10 people will be living in those markets.

When you think of emerging markets, what do you see? Most people still imagine them as hubs of low cost manufacturing and unskilled labor. But this perception is changing. Emerging markets are already transforming into centres of innovation.

Nigeria, Colombia and Indonesia are no longer symbols of corruption, drug wars or diseases. Without ignoring the impact of these uncomfortable realities, it is unfair to judge them by this lens alone.

By doing so, we miss the bigger story of how these countries are turning into incubators where talented entrepreneurs and innovators grow. You see, there are always two sides to the same story...

This is why, at Seedstars, we are based in all corners of the world, to live and actively engage in some of the biggest, upcoming tech hubs on the planet and learn from innovative and like-minded entrepreneurs.

Join us?

In the emerging economies that we have visited, this is not an unusual story. Again and again, success does not always come from disruptive technology, but in the way we tap into consumer habits. This is what is driving technology innovation in Africa, Latin America and Asia right now.

You see, the future of innovation can also lie in low tech.

The year 2015 may well be the year that emerging markets took half of the global GDP, as Zhu Min, the Deputy Managing Director of the IMF claimed. However, looking beyond GDP figures, what you see today is that over 4 billion people do not have access to the Internet, which in my language means 4 billion potential

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JOIN US?

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THE RISING STARTUP ECOSYSTEMS

* THE

SEEDSTARS

MANIFESTO It has taken us three years of groundwork in over 60 cities to get here today.

We have worked with over 200 partners, organised over 120 events and programs, sourced over 6000 startup applications, and heard more than 1200 pitches.

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WE BELIEVE THAT TECHNOLOGY AND ENTREPRENEURSHIP ARE THE BEST WAY TO IMPACT PEOPLE’S LIVES IN EMERGING MARKETS

THE SEEDSTARS ENGINE CONSISTS OF THREE GEARS:

1ST

We CONNECT stakeholders in over 60 emerging ecosystems

2ND

We BUILD companies to solve local pain points

3RD

We INVEST in driven entrepreneurs

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1. 2

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C NNECT

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A major focus of our work so far is to build the first gear of our engine; to connect with the right partners all over the globe.

Our exclusive startup competition, called Seedstars World, is our major tool to connect all stakeholders from the ecosystem. We work hard on building a world brand that people identify with professionalism, quality, and getting things done. We are tireless in expanding to all corners of the globe and we seek to build a foundation of trust and collaboration with local players everywhere we go. We take the time to understand the problems in their local context, and come up with specific solutions that can solve the local pains and scale. Finally, we strive to become a go-to reference in the world of innovation, emerging markets and entrepreneurship.

Yes, our team that grew from 4 to 40 people today is working hard to keep the Seedstars Engine running. seedstars.com 9

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1. 2. 3

BUILD 10 seedstars.com

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After connecting the ecosystems stakeholders, the second gear of the engine is to build companies with an impact. We walk the talk.

We are entrepreneurs ourselves. Based on all our interactions and experience, we know now better than ever how to process and systemize venture building, i.e. bringing an idea to a company, solving a real pain with profitable unit economics (from zero to one) and growth or acceleration, i.e. accompanying driven entrepreneurs like our Seedstars World competition winners to find the recipe for repeatable growth (from one to n). More than a global brand, S e e d s t a rs p rovid e s m e t h o d s an d expertise to build solutions that solve local pains. Because we are all about “pain killers,” rather than “vitamins”. seedstars.com 11

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1. 2. 3.

Finally,

INVEST

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TABLE OF CONTENT

1.

IMPACT STARTS

Invest, the last gear in our engine, comes into play once we have taken our ventures from concept to a repeatable growth. We build the right structure to support our rising stars during their growth stage.

with understanding your market, its pain points & potential

2.

IMPACT GOES with getting your hands dirty - BUILD !

3.

IMPACT MEANS being ready TO INVEST & take risks !

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“In the middle of every difficulty lies opportunity.”

—Albert Einstein

1.

CONNECT

THE RISING STARTUP ECOSYSTEMS

THE WORLD AS WE SEE IT OVER 4 BILLION PEOPLE STILL DO NOT HAVE ACCESS TO THE INTERNET.

% PEOPLE WITH NO INTERNET source: Internet Live Stats

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WHAT AN OPPORTUNITY!

>80%

60-80%

40-60%

<40% seedstars.com 17

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The world as we see it TOP 10 COUNTRIES BY NUMBER OF INTERNET USERS (2014)

In millions

In millions

source: Internet Live Stats

700 600 500 400 300 200 100

China

United States

India

Japan

Brazil

Russia Germany Nigeria

United France Kingdom

In millions

TOP 10 COUNTRIES BY INTERNET USER GROWTH (2013-2014) source: Internet Live Stats

35 30 25 20 15 10 5

India

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China

United States

Nigeria

Japan

Russia

Brazil

Egypt

Indonesia South Korea

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The Earth needed 365.25 days in 2015 to travel around the sun. In the same time...

79,943,920,456,238 emails were sent…

1,634,261,088,749

Google searches were made…

3,571,750,020,982

videos were watched on YouTube…

9,882,371,236

photos were uploaded…

21,192,513

websites were hacked...

1,127,532,401 MWh

electricity was used for the Internet…

2,039,133,860

smartphones were sold…

and 4,460 startup applications were submitted to Seedstars World. source: Internet Live Stats seedstars.com 19

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SEEDSTARS WORLD STARTUP STATS

WHO DID WE FIND ALONG THE WAY IN 2015?

LET’S TAKE A CLOSER LOOK...

PITCHING STARTUPS

4,460 APPLICATIONS

54

countries in

2015

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TOP 5 INDUSTRY SECTORS NUMBER OF STARTUPS

630

70

Social Finance, Consumer Travel and Networking Payments Services Education Transport

50

30

10

SECTORS MOST POPULAR

TRAVEL & TRANSPORT Overall the startups operated in 24 different sectors

THE RISING STARTUP ECOSYSTEMS

USD

6000

CEE

LatAm

MENA

Asia

AVERAGE EMPLOYEES PER STARTUP Africa total average

5000

EMPLOYESS

AVERAGE REVENUE PER STARTUP

6

CEE

Asia

LatAm

Africa

MENA total average

5 4

4000 3000

3

2000

2

1000

1

MONTHLY REVENUE AVERAGE REVENUE

EMPLOYEES TOTAL

HIGHEST ECOSYSTEM AVERAGE (monthly revenue)

HIGHEST ECOSYSTEM AVERAGE

$4,017

$30,500 (HONG KONG) GENDER SPLIT PER STARTUP MENA

LatAm

CEE

2,427

10 PEOPLE (UKRAINE) AVERAGE FUNDING PER STARTUP

Africa

Asia

USD

90000

LatAm

Asia

CEE

Africa

100% 80%

70000

60%

50000

40%

30000

20%

MENA total average

10000

WOMEN (CO)-FOUNDERS

FUNDING RAISED

HIGHEST ECOSYSTEM AVERAGE

HIGHEST ECOSYSTEM AVERAGE

12.5% ON AVERAGE

17% (ASIA) pitched at our events

USD 35,713,928

USD 260,000 (TAIWAN)

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SEEDSTARS WORLD STARTUP STATS

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FINALISTS

The Finalists of

2015

Airshop (Côte d’Ivoire) AlemHealth (United Arab Emirates) Asoriba (Ghana) BitNexo (China) BoxBike (Bolivia) Cinemad.tv (Chile) Couper (Singapore) Cuestionarix.com (Ecuador) Diseclar SAS (Colombia) doctHERs (Pakistan) Dronee (Azerbaijan) Easy Carros (Brazil) Ecoisme (Ukraine) Eggbun Education (South Korea) Eora 3D (Australia) Evreka (Turkey) Eye Care Plus (Armenia) ezCloud (Vietnam) Farrow Ventures (Mexico) Fidel (Ethiopia) Fliiby (Serbia) Flimper (Argentina) Giraffe (South Africa) Good Meal Hunting (Philippines) GPSGAY (Uruguay) IKNEWIT (Malaysia) Illuminum Greenhouses (Kenya)

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InterShip UG (Uganda) ioGrow (Algeria) Jobartis (Angola) Juabar (Tanzania) Madvisor (Bangladesh) MapTasking (Panama) Mergims (Rwanda) Mashvisor (Palestine) Merchandiser (Lebanon) Modisar (Botswana) Moovi (Mozambique) MyQ (Nigeria) Omniup (Morocco) ProSehat (Indonesia) Slidebean (Costa Rica) Smart X Lab (Taiwan) SmartBeen (Iran) SolarizEgypt (Egypt) Strike (India) Talkpush (Hong Kong) Texel (Russia) TICKEY (Bulgaria) TopDocs (Thailand) U.M.S ‘Queen’ (Myanmar) Urbaner (Peru) VoLo (Senegal) Yaqut (Jordan)

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FINALISTS

The Finalists of

2014

6degrees (Singapore) AidBits (Palestine) Beam (Ghana) Busportal (Peru) Channelkit (Russia) eFishery (Indonesia) Feesheh (Jordan) FirstJob (Chile) GoFar (Australia) Green Energy (Nigeria) KinTrans (UAE) Krowdpop (South Korea) Lumkani (South Africa) Machina (Mexico) Manads (Azerbaijan) myVLE (Morocco) Myki (Lebanon) OkHi (Kenya)

20

FINALISTS

OnePay Pte. Ltd. (Japan) Ploog (Brazil) Prisync (Turkey) QSearch (Taiwan) Remit (Uganda) Rumarocket (China) Salarium (Philippines) Scandid (India) SoloLearn (Armenia) Spectator (Serbia) SOMTOU (Senegal) Tapway (Malaysia) The Other Guys (Argentina) TorQue (Rwanda) Triip.me (Vietnam) USETIME (Colombia) VDecoration (Iran) WashBox (Thailand)

The Finalists of

2013

Chilindo (Thailand) dockPHP (Singapore) Flitto (South Korea) FoYo (Rwanda) GUST Pay (South Africa) HackerEarth (India) Jayride (Australia) Jooist (Kenya) JXJ Tech (China) Kudo (Brazil)

Locarise (Japan) NeWo (Azerbaijan) PingStamp (Mexico) Retail Tower (Ghana) SimplePay (Nigeria) Totus Power (Chile) TourBud (UAE) Vimantra (China) WayRay (Russia) Wideo (Argentina)

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SSW ALUMNI STATISTICS

2013 AND 2014

2013

2014

Average funding

$14,594,700.00

$8,435,675.00

Average valuation

$69,766,254.00

$54,636,147.00

REVENUES TOTAL REVENUES 2013

TOTAL REVENUES 2013 + 2014

10,000,000

8,000,000

6,000,000

4,000,000

2,000,000

0

JUN 2013

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DEC 2013

JUN 2014

DEC 2014

JUN 2015

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EMPLOYEES TOTAL EMPLOYEES 2013

300

TOTAL EMPLOYEES 2013 + 2014

250 200 150 100 50 0

JUN 2013

DEC 2013

JUN 2014

DEC 2014

JUN 2015

CUSTOMER ACQUISTION CUSTOMER ACQUISITION 13

CUSTOMER ACQUISITION 2013 + 2014

3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0

JUN 2013

DEC 2013

JUN 2014

DEC 2014

JUN 2015 seedstars.com 25

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Regional trends and characteristics

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Latin America is...

URBAN Latin America is the most urbanized region in the world with approximately 80% of its 600 million inhabitants living in cities

CONNECTED Latin Americans spend on average 24 hours online every month

SOCIAL Latin America’s social networks penetration rate on mobile phones is 94%

SHOPPING The region will have the fastest crossborder online purchasing growth, with expected purchasing to increase more than 40% annually from 2015 to 2020

RAISING Latin America was Seedstars World’s region with the highest average funding per startup of USD 80,000 in 2015

Sources: United Nations, World Bank, Internet World Stats, eMarketer, Statista, FocusEconomics, IMF.

POPULATION

GDP GROWTH

INTERNET PENETRATION

SMARTPHONE PENETRATION

ONLINE SHOPPERS

617mn

-0.3%

57%

40%

36%

Brazil

Panama

Chile

Chile

Argentina

204mn

5.8%

67%

56%

49%

Uruguay

Brazil

Bolivia

Bolivia

Bolivia

3.3mn

-3.0%

39%

13%

<10% seedstars.com 27

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Asia is...

BIG More than 4.2 billion people live in Asia, which represents roughly 60% of the world’s total population

SUPER(CITIES) 7 of the world’s 10 largest cities by population can be found in Asia, namely: Tokyo, Jakarta, Seoul, Delhi, Shanghai, Manila and Karachi

WELL FUNDED Didi Kuaidi, Chinese car hailing app, raised over USD 3 billion in funding and at least 15 web and tech startups in Asia became unicorns in 2015

CONNECTED The most popular region for chat apps is Asia, with the Chinese messenger app WeChat being the world’s most popular one, followed by WhatsApp and Facebook Messenger

DIVERSE Out of the 2015 startups pitching at Seedstars World, Asia comes first when it comes to having a female (co-) founder. In total, 1 out of 5 startups which pitched had at least one female co-founder

ONLINE SHOPPERS

Sources: United Nations,World Bank, Internet World Stats, eMarketer, Statista

POPULATION

GDP GROWTH

INTERNET PENETRATION

SMARTPHONE PENETRATION

4.4bn

6.3%

41%

28%

47%

China

Myanmar

South Korea

Singapore

South Korea

1.4bn

8.5%

93%

88%

62%

Singapore

Australia

Pakistan

India

India

5.5mn

0.7%

15%

15%

14%

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Africa is...

GROWING Africa will be home to 40% of the world’s population under 18 by 2050. In addition, the UN estimates that the whole population will double to 2.5 billion by 2050

DIVERSE Africa is home to 15% of the world’s population, and to a quarter of the world’s languages

TALKING 17% of Africa’s population own a smartphone and 65% a feature phone.

Africa’s mobile phone penetration rate will raise to 79% in 2020

LEADING Approximately 50% of all global mobile money services are in Africa, bringing the continent to the top spot

DARING In 2015, Seedstars World got the most applications from African startups

Note: Only SSW countries are taken into account for high and low comparison Sources: United Nations,World Bank, Internet World Stats, eMarketer, Statista

POPULATION

GDP GROWTH

INTERNET PENETRATION

SMARTPHONE PENETRATION

ONLINE SHOPPERS

1.2bn

3.7%

29%

17%

34%

Nigeria

Ethiopia

Morocco

South Africa

South Africa

183mn

8.5%

61%

47%

75%

Botswana

South Africa

Ethiopia

Ethiopia

Ethiopia

2.1mn

1.5%

3%

<5%

<10% seedstars.com 29

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Middle East & North Africa are...

YOUNG Approximately 30% of the MENA population is aged between 15 and 29

DRY Water is more scarce in the MENA region than in any other region.

Fresh water availability is expected to drop by 50% by the year 2050

COMPACT 3% of MENAâ&#x20AC;&#x2122;s surface area is home to 92% of its whole population

EXITING More than USD 300 milion were paid in 2015 for startup exits in the MENA region.

Talabat.com takes the lead, with an exit valued at USD 170 million

ATTRACTING The Seedstars World MENA startups had an average traction of 30,000 users/ clients, far ahead of the number two region, CEE with only 16,000 users/ clients

Note: Only SSW countries are taken into account for high and low comparison Sources: United Nations, World Bank, Internet World Stats, eMarketer, Statista, MasterCard Online Shopping Behavior

POPULATION

GDP GROWTH

INTERNET PENETRATION

SMARTPHONE PENETRATION

ONLINE SHOPPERS

381mn

2.8%

36%

21%

35%

Egypt

Morocco

United Arab Emirates

United Arab Emirates

United Arab Emirates

90mn

4.5%

94%

65%

52%

Lebanon

Lebanon

Algeria

Iran

Egypt

4.5mn

2.0%

16%

10%

7%

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Central & Eastern Europe and Caucasus...

INVENTIVE Insulin, parachutes, Skype and the Rubik´s Cube, to name just a few examples, all have their origins in CEE

SUCCESSFUL Socialbakers, a social media analytics platform, is one of the hottest startups in the region and is used by half the Fortune 500 companies

EDUCATED The share of labor force with tertiary education is approximately 4 times higher compared to China

EMPLOYING The Seedstars World startups from CEE & Caucasus ranked number one by average number of employees per startup, with slightly above 5 people per team

CYBERSAFE The region is at the forefront of antivirus protection technology.

Avast and AVG account for roughly 25% of the global market share

Note: Only SSW countries are taken into account for high and low comparison Sources: United Nations, World Bank, Internet World Stats, eMarketer, Statista, McKinsey Global Institute, KKR Global Institute * Armenia, Azerbaijan, Ukraine and Russia are included

POPULATION

GDP GROWTH

344mn* 2.4%*

INTERNET PENETRATION

SMARTPHONE PENETRATION

ONLINE SHOPPERS

54%*

50%*

44%

Russia

Czech Republic

Slovakia

Czech Republic

Czech Republic

144mn

4.3%

83%

59%

46%

Armenia

Ukraine

Ukraine

Bulgaria

Bulgaria

38%

25%

<20%

3.0mn -12.0%

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IF YOU WANT TO GO IF YOU WANT TO GO - African Proverb Seedstars Africa team, Marcello and Gregory, jumping with the Maasai in Kenya: The higher you jump, the less cows you pay for your wife.

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FAST, GO ALONE. FAR, GO TOGETHER.

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1. KISKIL:

KEEP IT SIMPLE, KEEP IT LEAN

2. KEEP IT SWISS:

QUALITY, WHAT WE DO, WE DO WELL

3. ZERO BULLSHIT: MORE MVP, LESS PPT

4. THINK BIG:

LET'S BUILD SOMETHING BIG TOGETHER

5. BE PASSIONATE: IN HEART AND MIND

6. INDEPENDENTLY TOGETHER: BELIEVE IN TEAM EFFORT AND ACT RESPONSIBLY

7. DIVERSITY: OUR DNA

8. OUTSIDE THE COMFORT ZONE: THRIVE FOR CHALLENGES & NEW OPPORTUNITIES

9. BE RESILIENT: NO PAIN, NO GAIN

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THE RISING STARTUP ECOSYSTEMS

OUR OUR VALUES

It is impressive to see how such a small team can feel connected by the same values even when spread around the world. Whether we are snacking on tacos in Mexico, exploring the dusty streets of Dakar or swooshing on mototaxis across Jakarta, we all look at the world around us through the same eyes, welcoming its diversity and willing to do the impossible to improve peopleâ&#x20AC;&#x2122;s lives through technology.

VALUES

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A bit more about the 2015 Seedstars World Team that scouts for the best entrepreneurs in all continents.

NUMB3RS

SO WHO IS THE TEAM SCOUTING FOR THE BEST STARTUPS? ENRIQUE

GOT THE CHEAPEST HAIRCUT, COSTING ONLY

$2.5 IN LATAM. IGOR

CAME CLOSE WITH

70 CENTS IN EASTERN EUROPE, WHILE LORENA

SPLURGED A WHOPPING

$2

TO TREAT HERSELF TO A 3 COURSE MEAL IN LATAM. 38 seedstars.com

MARCELLO AND ALISEE

COVERED THE MOST KILOMETERS AT

180K EACH TRAVELING MOSTLY BETWEEN AFRICA AND EUROPE. KAREN AND KATARINA

HAD THE CHEAPEST MEAL OF THE TOUR FOR JUST

LORENA & ENRIQUE

VISITED

29 CO-WORKING

SPACES ALL OVER LATAM. GREGORY & MARCELLO

SPENT THE MOST NIGHTS OF ANY TEAM COUCHSURFING AT

101 NIGHTS 20 CENTS ONLY TO BE TOPPED ON STREET FOOD IN VIETNAM.

BY

ALISEE’S

RECORD-SETTING

120 NIGHTS!

THE RISING STARTUP ECOSYSTEMS

DID YOU KNOW?

s

s.

WE ARE

MARCELLO

WAS NAMED

A TEAM OF 10 COMING FROM “STARTUP

11 COUNTRIES AND 4 CONTINENTS AROUND THE WORLD:

UNITED STATES, AUSTRIA, FRANCE, LEBANON, MEXICO, SLOVAKIA, SOUTH AFRICA, SWITZERLAND, PHILIPPINES, UNITED KINGDOM, UKRAINE.

JESUS” BECAUSE OF THE LONG

BEARD HE GREW ON HIS TRAVELS THROUGH AFRICA. EVEN THOUGH GREGORY

CHARLIE

PICKS UP LOCAL

ACCENTS EXPRESSIONS AND HEAD BOBS WAY TOO QUICKLY, BUT HE’S NOT EASILY IMPRESSED BY LOCAL DELICACIES. LORENA

ONCE STAYED AT A HOSTEL RUN BY AN EXGEORGIAN

MAFIA GUY WHO HAD CANCER AND WHO WANTED TO MARRY HER. ALISEE

USED TO TAKE PART IN

HIP HOP COMPETITIONS. AND

THOUGH SHE’S FRENCH ON HER PASSPORT, ALISEE FEELS SHE’S EVERYTHING ELSE AND IN BETWEEN.

PEOPLE ACROSS ASIA AGREE THAT NO ONE CAN PRONOUNCE KATARINA’S

FAMILY NAME. SHE WASHES THE PAIN DOWN WITH HER FAVORITE CUP OF

MILK TEA AND RED BEANS. KAREN

KNOWS THE AIRPORT IN SINGAPORE LIKE THE BACK OF HER HAND; WHERE TO GET

THE BEST KAYA TOAST, TEH, FOOT MASSAGE, OR NAP.

WAS BORN IN SWITZERLAND, HE HAS A SOUTH AFRICAN ACCENT, AND IS KNOWN AS A BAJAAJ (TUC-TUC)

DJ IN TANZANIA. IGOR

ONCE HAD DINNER WITH THE HEAD OF BULGARIAN

INTELLIGENCE

SERVICES AFTER ALMOST

ACCIDENTALLY GETTING SHOT IN SOFIA. ENRIQUE

NO ONE IN MENA COULD BELIEVE THAT

JOHN

IS FROM LEBANON BECAUSE OF THE ENGLISH NAME. IT DIDN’T HELP THAT ON PAPER HIS LEGAL

NAME WAS FRENCH - JEAN.

ONCE

JUMPED A THREE METER FENCE

TO STOP A MASON FROM DOING NOISY REPAIR WORK ON A WALL NEXT TO OUR EVENT IN ARGENTINA. AND HE LOST A SHOE ON THE WAY BACK. seedstars.com 39

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THE RISING STARTUP ECOSYSTEMS

LATAM

4(MEXICO, HUBSCOLOMBIA, PERU & ARGENTINA)

& 10+ EVENTS

AFRICA

4(MOROCCO, HUBS EGYPT, NIGERIA & SOUTH AFRICA)

& 15+ EVENTS

MIDDLE EAST 1(TURKEY) HUB & 10+ EVENTS

CEE

1(UKRAINE) HUB & 10+ EVENTS

ASIA

4(THAILAND, HUBS VIETNAM, PHILIPPINES & INDONESIA)

& 15+ EVENTS 42 seedstars.com

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SEEDSTARS MAP Hubs with Seedspace (planned and current)

Yearly local “Seedstars World” events and network

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SEEDSTARS INDEX FRAMEWORK Most would agree that all entrepreneurial ecosystems are unique and none should try to simply emulate Silicon Valley but rather play to specific strengths.

That said, there are traits and elements that are required in any ecosystem for it to function.

We developed the Seedstars Index (SSI) to measure the quality, maturity and future potential of the 54 ecosystems we interacted with in 2015 with one thing in mind... generating SUCCESS.

ENVIRONMENT

ENTREPRENEURIAL ECOSYSTEMS

SUCCESS CULTURE

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OPPORTUNITY

THE RISING STARTUP ECOSYSTEMS

factors & weights

#SSI Following the development and positive feedback of the first version of SSI in 2014, we revisited the factors and are now proud to present version #2. The index is made up of three pillars we believe are fundamental in building a successful entrepreneurial ecosystem: Culture, Environment and Opportunity. Success is both the desired output and the catalyst.

If the right culture does not exist, no one will even consider entrepreneurship as an option and new ventures will not take shape. An entrepreneurial mindset is critical, while a fear of failure can be crippling.

Without a conducive environment, new ventures will be suffocated by harsh business conditions. If administration and legal systems are not facilitative, business and investment will suffer. Most of us take reliable internet and electricity for granted, but imagine the difficulty added to a new venture when this is not the case.

And no venture can thrive without an opportunity to grow in local and foreign markets which requires talented team members, expert mentoring and venture capital.

Successful businesses provide employment opportunities and economic growth, and therefore should be the targeted output for any ecosystem.

S u cce s s i s a l s o t h e c at a ly s t o f a n ecosystem as triumphant entrepreneurs lead by example, become role models, invest, mentor and lobby for change.

Successful entrepreneurs can impact all three elements in the SSI and accelerate change. Success breeds success.

The Seedstars Index is made up of three pillars, Culture, Environment and Oppor tunity and 15 underlying factors. Each fa c to r is b e n ch m a r ke d against the United States or Silicon Valley that receives 100 points.

Scores range from non existant ecosystem to 100 (comparable with USA / Sillicon Valley) and can go above 100 implying a more favourable situation than USA/Sillicon Valley.

10 FACTORS

are quantitative and taken from existing indices and ratings.

5 PROPRIETARY

SSW factors are qualitative and based on over

300 MEETINGS

and interactions with our network of more than

1,500 ENTREPRENEURS & INVESTORS

in 2015. The pillars, factors, sources and weights are listed in the table.

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THE RISING STARTUP ECOSYSTEMS

PILLARS

FACTORS

MINDSET

HOW WE MEASURE LinkedIn keyword “Startup” SSW Mindset score

CULTURE Weight = 33.33% EVENTS & NETWORKS

SSW Event score

MEDIA

SSW Media score

INFRASTRUCTURE

WEF GCI Technological readiness WEF GCI Infrastructure

ENVIRONMENT Weight = 33.33%

WEF GCI Institutions INSTITUTIONS World Bank “Doing Business” WEF GCI Higher Education and Training TALENT WEF Innovation

OPPORTUNITY

FUNDING

Weight = 33.33% TRAINING & MENTORING

MARKET

WEF GCI Financial Market development SSW Access to funding score SSW Training & Mentoring score WEF Goods market efficiency WEF Market Size

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THE RISING STARTUP ECOSYSTEMS

WHAT IS MEASURED Quantity of the keyword “startup” & “start up” on LinkedIn divided by the LinkedIn population, to measure how many people are involved with entrepreneurship The attractiveness of entrepreneurship as a career choice and the level of fear of failure The frequency of tech/startup events in each ecosystem The general and specialised media interest and coverage of local startups and the topic of innovation in general Technological readiness as major driver of productivity and prosperity: Internet bandwidth and subscriptions, active mobile subscriptions, % of internet users The quality and availability of transport, electricity and communications infrastructure.

The efficiency and transparency of public administration, independance of the judiciary, property rights, physical security, business ethics Ease of starting a business, paying taxes, enforcing contracts, dealing with construction permits, registering property, resolving insolvency, etc.

Quality and quantity of graduate students and quality and availability of on-the-job training Company and University spending on R&D, availability of science and engineers, patent application, government procurement of advanced technologies, capacity for innovation Ease of access to loans, Venture Capital availability, efficiency, stability and trustworthiness of the financial and banking system Presence of investor chain: local & regional VCs, seed funds, angels, crowdfunding, accelerators, government Quality of governmental training schemes, accelerators and incubators Domestic and foreign competition, prevalence of trade barriers and demand conditions Domestic and foreign market size

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THE RISING STARTUP ECOSYSTEMS

SEEDSTARS INDEX

Developed countries

We are often asked why we cover places like Sydney, Singapore or Seoul when we are supposed to be “emerging market focused”.

Following the definition of the IMF, Australia, Hong Kong, Singapore, Korea, UAE and Taiwan are defined as developed countries. While the countries are considered ‘developed’, their startup ecosystems are still young and emerging and often a good route to access surrounding developing markets that we cover.

From the countries we visited in 2015, the ranking reveals that Singapore has the highest entrepreneurial ecosystem quality, followed by Hong Kong and South Korea.

100

17,3

-8,5

0,5

We included our home of Switzerland to see how it ranks as we are often asked if it really is the most innovative country in the world (according to the Global Innovation Ranking). The numbers on top of every country indicate how many points each ecosystem is over/under performing in the SSI given their economic development.

Check out page 54 for the regression analysis.

7,9

0,9

OVER

UNDER PERFORMANCE

-10,4 CULTURE

-6,4

-4,9

ENVIRONMENT

OPPORTUNITY

SSI SCORE 2015

80 60 40 20

In need of a entrepreneurial cultural injection!

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The most connected country in the world with 95% internet access we’re expecting more big things from Korea!

All the ingredients but in need of a few more global success stories to foster the startup scene.

R&D, as share of GDP, is currently at the same level as Mexico or Romania! More investment could help develop tech talents here.

Taipei Taiwan

Dubai United Arab Emirates

Sydney Australia

Seoul South Korea

SSW Home Switzerland

Hong Kong Hong Kong

Singapore Singapore

Silicon Valley Benchmark

0

The lowest cultural score of all the developed economies.

But so much potential!

THE RISING STARTUP ECOSYSTEMS

Singapore is already one of the world’s greatest economic success stories. Only 50 years ago, the GDP/Capita (ppp) was around USD 3,000 but this has now grown to an outstanding USD 83,000! As one of the most advanced economies on our list, it comes as no big surprise that it is top of our index as we found economic development and entrepreneurial ecosystem development is highly correlated (0.78 by our numbers).

GDP/CAPITA [PPP]

USD 3,000 to USD 83,000!

50 YEARS SINGAPORE Look at‘em grow!

With limited natural commodities, Singapore understood that economic growth required world class institutions and innovation.

There is still a cultural fear of failure and preference for talent to pursue job opportunities at large corporations and institutions.

To be at the forefront of innovation, the government supports business migration of skilled foreign talents and is ranked as one of the least corrupt economies in the world.

Given that many corporates have their Asia headquarters located in Singapore, the choice between the startup world and a more stable corporate or government career can be quite hard for top talent.

As such, Singapore comes top of the index in the Environment pillar, indicating an excellent attractive location to set up a company.

However, this is likely to change as more success stories start to come out of Singapore’s entrepreneurial scene.

In the Opportunity pillar, Singapore lacks the domestic market size and startups have to quickly grow abroad to reach scale.

Expanding out of Singapore can be a very hard job due to the fact that the neighboring countries are so economically different.

Thinking big from the start and tackling regional expansion early does pay off in the long term though.

Where Singapore scores the lowest of all is in the Culture pillar especially under the factor Mindset.

The two main unicorns born and raised so far are: Lazada, an online shopping mall, and Garena, an online and media entertainment provider.

Other promising startups on the rise include: 1. PROPERTY GURU - property discovery marketplace - which has raised $183 million thus far; 2. ICARSCLUB - peer to peer rental platform - which has raised $71 million; and 3. REDMART - online grocery store which has raised $59 million.

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THE RISING STARTUP ECOSYSTEMS

“Over the past ten years, Switzerland heavily invested into entrepreneurship.”

Out of all countries we ranked, Switzerland would come in just seventh.

We talked with Rico Baldegger of the Haute Ecole de Gestion, Fribourg, about the general state of Swiss startup ecosystem and what factors can account for this. Looking at the Environment pillar, Switzerland does well as expected thanks to the stable, efficient and active engagement of the government.

Whether it has been for its neutrality throughout history, or generally smart government initiatives, Switzerland is currently one of the most prosperous countries in the world, and has the necessary resources and willingness to provide continuous support to the local startup scene.

SO HOW ABOUT SWITZERLAND AND STARTUPS? For the past 5 years, Switzerland has been topping the charts of the World Intellectual Property Organisation (WIPO) study as the world leader in innovation, performing particularly well in three areas: creative outputs, knowledge and technology outputs, and business sophistication. And for the past 5 years, no other country came even close to overthrowing it. But how does Switzerland perform on our SSI scale?

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“Over the past ten years, Switzerland heavily invested into entrepreneurship,” remarks Mr. Baldegger.

“Parliament also developed a ‘Startup Agenda’, the aim of which is to provide a clear stack of services aimed to incentivise startups and facilitate their work.

This can range from tax breaks, startup capital or incentives for foreign investors to come into the country.

In general, we see great sophistication i n Sw it ze r l a n d’s l i n k s b e t we e n government, the private sector and universities – the fundamental ties in the domain of innovation.” The ease of doing business is still something that needs to be boosted by lowering bureaucratic hurdles, but in general, the country is on a good path.

THE RISING STARTUP ECOSYSTEMS

HOW ABOUT OPPORTUNITY? While the country comes in second, it still excels in the R&D spending and the quality of scientific research institutions providing an abundance of talent and a capacity to innovate.

Switzerland also prides itself with a dense presence of exceptional universities, such as HEC Lausanne, EPFL or University of Fribourg, which are steadfastly deploying armies of fresh graduates, skilled in business, finances or engineering. As Mr. Baldegger explains, “we believe that universities should provide a platform for connecting entrepreneurship and technology.

That is why, at campuses, you can easily find innovation labs, providing students a place to explore and experiment with interdisciplinary projects.” Like Singapore, Switzerland lacks in market size, which can be seen as a challenge, but also becomes a strength for companies who pass the first hurdle and have an ingrained “think global” mentality. The convenience of the geographical location is not to be neglected either. Being located in the center of Europe, the market is a perfect testing ground for anyone aiming to expand in the region.

“We are seeing a lot of companies from countries such as Mexico and Brazil looking in our direction. The multicultural environment allows you to test your product within different demographics, and give you a better sense which market would make sense for future expansion,” says Mr. Baldegger. In addition to that, despite the highest number of millionaires per capita in the world (13.5%), the funding scene for startups isn’t yet active enough and deals are few and far between.

Dedicated government suppor t , co nve n i e nt g e o g r a p h i c a l l o c at i o n , colourful demographic characteristics and exceptional education all put Switzerland on the top position as a launchpad for new startups.

SO WHICH INDUSTRIES RESONATE THE MOST WITH THE LOCAL STARTUP SCENE? It should come as no surprise that high tech always tops the charts. Whether it is Fintech, MedTech or CleanTech, the traditional industries have left a deep footprint in the minds of Swiss entrepreneurs. According to Mr. Baldegger, it might have something to do with the typical profile of the local entrepreneur, who is “usually someone in their mid-thirties, who has considerable expertise in a specific industry, and decides to launch his own company. We see this profile appearing especially in the FinTech industry, where the majority of the newly started FinTech companies are lead by former bankers.

MedTech and CleanTech are also good examples, since it takes a significant level of expertise and industry experience to launch a successful high tech company.”

Ranking only on 31th position, culture remains Switzerland’s largest challenge.

The Swiss are traditionally risk averse, which can also be demonstrated by them having one of the lowest rates of home ownership, which inherently requires borrowing and risk. Failure is definitely not something the Swiss are comfortable with, but also that is slowly changing. From what we have seen, it all boils down to what entrepreneurs can do with the resources that are available to them and their personal motivation. Switzerland has more than enough to offer in terms of environment.

AND IN TERMS OF PERSONAL MOTIVATION? As Mr. Baldegger concludes: “At Fribourg, we often say that we are not here to educate people. We are here to inspire them. Because at the end, it is not the question of money or who you know, but of self-motivation, self-improvement and personal enrichment. And that is what we are striving to provide.”

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THE RISING STARTUP ECOSYSTEMS

Taking international knowledge exchange one step further SEEDSTARS WORLD INTERVIEW

Digging deeper into the innovative ecosystem of Switzerland and the supportive government structures, we approached Mauro Dell’Ambrogio, the State Secretary for Education, Research and Innovation of Switzerland to discuss the potential of the country in these aspects and its collaboration with emerging markets.

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“We are probably one of the most internationally exposed countries.”

SSW: What makes Switzerland uniquely positioned to provide assistance in education, research and technology?

MDA: Switzerland is a small country, in fact very small. We live in a highly fragmented and highly decentralized system, with a diversified industr y structure and an inclusive society of four national languages and many more cultures. In order to be fast and smart, we are largely building on formal and informal networks. At the same time, our system is politically stable and it produces outstanding results. Thus, we have always been an attractive partner to talk to and we are probably one of the most internationally exposed countries.

The education system is also quite specific, being based on the dual-track modality, offering both academic as well as vocational training paths with high permeability. In science and innovation, Switzerland also has excellent institutions and world-renown companies.

Since competitivity is a “must” when those institutions ask for public funding, we can report our experience on how to judge quality, how to efficiently set up public funding regimes and how to define a subsidiary role of a government body.

SSW: As a small country, Switzerland has always bet on exporting its innovations and know-how. Is there a large demand of Swiss companies to explore emerging economies?

MDA: Switzerland is an export nation.

For our companies, the word “home market”

THE RISING STARTUP ECOSYSTEMS

“People start to think differently and discuss out of the box. However, just talking to each other is not enough.”

is basically not even known. As a consequence, our companies have always been exposed to two key elements in order to survive: internationalization and specialization. A business partner who does not constantly focus on those two elements will not stay in business for long. Especially not if you are technology driven. There is a large demand of Swiss companies to export and to explore all kinds of partnerships and markets, also in emerging economies. Our industries have established partnerships with the BRICS countries long ago. They are supported by the federal government in different ways, e.g. we offer a reinsurance warranty on exportation in order to minimize risks, we have several agencies that help them for import and export and we offer our unique network in science, technology and innovation. However, we fully respect the companies’ autonomy and their selfresponsibility. All in all, I would judge the system being both efficient and effective.

SSW: One of SERI’s initiatives is the network of swissnex offices around the world. What are the main learnings from this projects?

MDA: One of the key elements in connecting people and ideas between Switzerland and global knowledge hubs is the importance of interdisciplinarity. We bring students, researchers, entrepreneurs and policymakers together. The resulting diverse communities built by swissnex create unexpected connections across sectors and may produce novel ideas. People start

Mauro Dell’Ambrogio, State Secretary for Education, Research and Innovation

to think differently and discuss out of the box. However, just “talking to each other” is not enough – the way of communication is constantly changing. Thus, another key learning is that swissnex has to reinvent itself and adapt its way of “connecting the dots” according to the cultural context, for example in the BRICS countries.

SSW: How does the startup exchange program within swissnex works?

MDA: Several swissnex locations, as well as the Science and Technology Office in London, offer a platform to connect Swiss startups together with potential partners, explore opportunities and learn about the locations’ own innovation system. This is done in close collaboration with our federal Commission for Technology and Innovation CTI. They need to achieve very concrete milestones and outcomes, such as finding innovation partners, hiring talented staff or finding investors. For instance, Faceshift, a spin-off of the two Federal Institutes of Technology, was a resident of the CTI Market Entry Camp at swissnex San Francisco in 2013, which helped them over the last two years to strengthen its presence in the Silicon Valley.

Recently, Faceshift was acquired by Apple, though its R&D team will remain in Switzerland. We certainly hope that our programs will continue to support such aspiring entrepreneurs and provide them with all the resources needed to succeed.

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THE RISING STARTUP ECOSYSTEMS

Silicon Valley Benchmark

SSI score 2015

100

90

Singapore Singapore

Hong Kong China Seoul South Korea

80

Kuala Lumpur Malaysia

Cape Town South Africa

Sydney Australia

Dubai United Arab Emirates SSW Home Switzerland

Taipei Taiwan Sao Paulo Istanbul Santiago Chile Brazil Turkey Shanghai China Moscow 70 Russia Bangalore India Mexico City Mexico Jakarta Indonesia Cairo Panama Panama Kiev Ukraine Egypt Bogota Colombia Buenos Aires Argentina Montevideo Uruguay Yerevan Armenia Manila Philippines Sofia Bulgaria Tehran Iran Nairobi 60 Kenya San Jose Costa Rica Hanoi Vietnam Lima Belgrade Serbia Kigali Rwanda Beirut Lebanon Peru Accra Ghana Baku Azerbaijan Amman Jordan Kampala Uganda Casablanca Morocco Cote d'Ivoire Abidjan Lagos Nigeria Dakar Senegal Gaborone Botswana 50 Karachi Pakistan Dar Es Salaam Tanzania Bangkok Thailand

Dhaka Bangladesh Addis Ababa Ethiopia

Santa Cruz Bolivia

Maputo Mozambique

40

Algiers Algeria

SEEDSTARS INDEX

results for all countries

Luanda Angola Yangon Myanmar

30

THE GRAPH SHOWS THE OVER AND UNDER PERFORMANCE OF ALL 56 STARTUP ECOSYSTEMS IN RELATION TO ECONOMIC DEVELOPMENT.

20

10

GDP based on purchasing-power-parity per capita 2014 (source IMF) 0 0

10000

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20000

30000

40000

50000

60000

70000

80000

THE RISING STARTUP ECOSYSTEMS

OVER & UNDERPERFORMERS Economic development is highly correlated with entrepreneurial ecosystem development (0.78).

By plotting the index scores against GDP per capita it is possible to emphasize outliers.

Countries falling above the line indicated an ecosystem that is over performing expectations, below the line means it’s underperforming.

In developed countries, the Silicon Valley, USA st ands out as a clear outperformer while Dubai, UAE and Taipei, Taiwan appear to be falling behind given their economic development levels.

Dubai has made strides in the last 2 decades to reinvent itself as a businessfriendly environment.

Today more than ever, there’s a pressing need to modernize the country’s bankruptcy law to create a level playing field for entrepreneurs.

In addition, Dubai has the potential to lead the MENA region in IP-based innovation.

The country has already at tracted the world’s leading universities to set up shop in Dubai and Abu Dhabi.

Its startup ecosystem would benefit greatly from higher research and development expenditure as a percentage of GDP. On a rel ated note, t h e co u nt r y at t r a c t s engineering talent from all over the world.

T h e co u nt r y s t a r t s to harness this talent by investing more into hardware acceleration programs, with an eye on export markets in MENA, Asia, Europe, and Africa.

For Taipei, Taiwan, we would suggest focusing on two key pillars of a thriving startup ecosystem: 1. Supportive legal and regulatory measures: Taiwan will need to develop clear and supportive policies for online payments and P2P transactions to enable growth of online businesses.

Currently P2P transactions are considered illegal.

2. Shift cultural mindset: the ecosystem is still dominated by traditional and conservative business approach, which makes it challenging for startups to work with corporates and raise funding domestically.

If the ecosystem aspires to keep its top tech talent in the country, government, corporates, accelerators, and communities need to work synchronously to support the path of startups.

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THE RISING STARTUP ECOSYSTEMS

SEEDSTARS INDEX

results for developing countries

The country gave birth to the first unicorn in 2015: the e-hailing app GrabTaxi

Chilecon Valley is at the forefront with Startup Chile

100 90 80 70 60 50 40 30 20 10

Kuala Lumpur - Malaysia Cape Town - South Africa Santiago - Chile Istanbul - Turkey Sao Paulo - Brazil Shanghai - China Moscow - Russia Bangalore - India Bangkok - Thailand Mexico City - Mexico Panama - Panama Kiev - Ukraine Cairo - Egypt Jakarta - Indonesia Buenos Aires - Argentina Bogota - Colombia Manila - Philippines Montevideo - Uruguay

0

SSI

REGIONAL AVERAGES: LatAm - 63.8 CEE - 63.3 Asia - 59.6 MENA - 56.1 Africa- 52.4

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South African tech startups raised the lion’s share of almost ⅓ of the total funding raised by African startups in 2015 (186 million USD)²

Startup stepping stone to both the European and Arab world

THE RISING STARTUP ECOSYSTEMS

¹ Unfortunately we had to leave out two countries - Ecuador and West Bank & Gaza - as we didn’t have enough data points. ² Source: Forbes

Egypt has a mass of young, educated and motivated people who are hungry for new ventures ENVIRONMENT

OPPORTUNITY

SSI SCORE 2015

Sofia - Bulgaria Tehran - Iran San Jose - Costa Rica Yerevan - Armenia Nairobi - Kenya Belgrade - Serbia Hanoi - Vietnam Beirut - Lebanon Kigali - Rwanda Lima - Peru Lagos - Nigeria Accra - Ghana Baku - Azerbaijan Casablanca - Morocco Amman - Jordan Kampala - Uganda Dakar - Senegal Gaborone - Botswana Abidjan - Cote d'Ivoire Dar Es Salaam - Tanzania Karachi - Pakistan Dhaka - Bangladesh Santa Cruz - Bolivia Addis Ababa - Ethiopia Algiers - Algeria Maputo - Mozambique Luanda - Angola Yangon - Myanmar

CULTURE

South Africa

2

Malaysia

1

Chile

3

Bottom of the index: Conflict, civil war, dictatorship, famine and extreme poverty are often associated with some of the countries propping up the bottom of index. But when you are on the ground interacting with these ecosystems and witnessing the atmosphere of change, you can not help but be optimistic. seedstars.com 57

THE RISING STARTUP ECOSYSTEMS

*

ASIA

The Developing Ecosystems

SEEDSTARS INDEX

results for developing countries

From all the regions, Asia is the one with the largest disparity, with Kuala Lumpur, Malaysia at the top of our list and Yangon, Myanmar at the bottom of all 46 countries. With the addition of Singapore and Hong Kong in our developed nations list, Asia has a number of hotspots to offer.

One of the most appealing aspects of Asia is the sheer size of the market opportunity due to the exponential growth in smartphone ownership and consumer buying power, led by the predominantly yo u t h p o p u l at i o n i n co u nt r i e s l i ke Indonesia, Thailand, and Vietnam. In fact, Asia is expected to account for over 50% of global online payments revenue growth over the next five years.

China has proven it self to be a powerhouse innovator on its own, with Facebook taking notes from WeChatâ&#x20AC;&#x2122;s extraordinarily success in making chat the center of mobile communications. India is being wooed by the likes of Amazon and Uber as it presents not only a large market opportunity but also expected robust GDP growth up to 7% in the years to come.

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THE RISING STARTUP ECOSYSTEMS

7 countries in Asia are outperformers and 3 are underperformers 100

9,1

9,6

13,4

7,3

7,3 OVER /

6,9

2,0

UNDER PERFORMANCE

-5,1 CULTURE

-7,2 ENVIRONMENT

ASIA -21,2 OPPORTUNITY

SSI SCORE 2015

80

60

40

20

Yangon Myanmar

Dhaka Bangladesh

Karachi Pakistan

Hanoi Vietnam

Manila Philippines

Jakarta Indonesia

Bangkok Thailand

Bangalore India

Shanghai China

Kuala Lumpur Malaysia

0

BANGALORE, INDIA

YANGON, MYANMAR MENA

The 4th largest startup ecosystem in terms of IT and digital startups in the world is as dynamic as the economic reforms planned by Prime Minister Modi. Notably, the ecosystem is far above the trend line which should give an index score in the range of 50-55 points, instead of 69.

What is Bangalore doing so right? Well, opportunity stands out as the strongest pillar with market size and access to funding as the two best indicators. Even more interesting, Bangalore achieved the highest cultural score of all Asian countries by being open-minded and having a strong media coverage.

In contrast to Bangalore, Yangon is far below the trend line due to a very weak cultural score. Even worse, in four out of five SSW scores, namely: media, mindset, access to funding and training & mentoring, Myanmar achieved the lowest possible results. Of course, just a few years ago the country was trapped in dictatorship and economic stagnation. Today, the economy is fueled by strong growth momentum with an expected growth rate of 8.5% in 2016 and an energy we are expecting to spill over to the startup scene.

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THE RISING STARTUP ECOSYSTEMS

KUALA LUMPUR,

FOR YANGON,

MALAYSIA

MYANMAR

...takes the golden crown of all 46 developing markets we covered in the index. Catalysts for Malaysia are the good market efficiency, quality of institutions and financial market development. In retrospect, one major cornerstone for the Kuala Lumpur ecosystem was the launch of a special economic zone called Multimedia Super Corridor in 1996, which created a vibrant level playing field for entrepreneurs.

...all three pillars are below 50%.

Overall, the startup ecosystem faces some huge hurdles as it really is just being born. A great number of these challenges come from the country’s very weak infrastructure, inherited from 50 years of military dictatorship. When the economy began to open up in 2011, less than 1% of Burmese had an access to the internet. Today, the government forecasts that by the end of 2016, 80% of its citizens will have a mobile phone and 69% will use the internet.

ADVANTAGES → Multicultural environment → Good testing market when aiming to scale regionally → Good level of English → High internet penetration and developed infrastructure

→ Good opportunities if you understand the ecosystem → High potential for growth, many big problems in health, transportation, education for entrepreneurs to address

DISADVANTAGES → High level of corruption → Strong preference to support Malays in government-supported programs

→ Highly intransparent country → Lack of technical talent and talent development opportunities → Lack of funding → Foreign entities must establish joint venture with local Myanmar company to operate

SUCCESS / OPPORTUNITIES Successes: → Successful regional expansion of Grabtaxi → Piktochart

Opportunity: → Developing core transportation, payments, ICT, and logistics infrastructure

RECOMMENDATION Find a better balance between governmental grants and private funding (status quo: inflated ecosystem)

Improve the legal and technology infrastructure

TOP ECOSYSTEM INITIATIVES → MaGIC Accelerator → Malaysia Venture Capital Management 60 seedstars.com

→ Global Entrepreneurship Week → Project Hub Yangon → Asia Frontier Capital

THE RISING STARTUP ECOSYSTEMS

*

AFRICA

The Developing Ecosystems

In Sub-Saharan Africa, we saw a large disparity between Cape Town, South Africa with the highest African score (and second best globally) and Luanda, Angola that scored the lowest in Africa (and second lowest globally).

SEEDSTARS INDEX

results for developing countries

The growing middle cl ass and opportunity to reinvent how key industries such as health, education, agriculture and finance can operate more successfully by leveraging new technologies is a massive oppor tunit y for the African star tup landscape.

Our team also observed that many of the diaspora who studied and lived abroad are coming back to their home countries to help accelerate the startup ecosystems by mentoring, investing and building companies.

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THE RISING STARTUP ECOSYSTEMS

3 ecosystems in Africa are outperformers, 7 are underperformers AFRICA and 3 are in line with expectations 100

15,3

6,5

3,6

0,3

0,8

0,4

-2,4 -11,2 -2,8 -4,0 -7,8 -10,9 -18,9

OVER /

UNDER PERFORMANCE

CULTURE

ENVIRONMENT

OPPORTUNITY

SSI SCORE 2015

80

60

40

Luanda Angola

Maputo Mozambique

Addis Ababa Ethiopia

Dar Es Salaam Tanzania

Abidjan Cote d'Ivoire

Gaborone Botswana

Dakar Senegal

Kampala Uganda

Accra Ghana

Lagos Nigeria

Kigali Rwanda

Nairobi Kenya

0

Cape Town South Africa

20

CAPE TOWN, SOUTH AFRICA

LUANDA, ANGOLA

The country has without doubt the most vibrant startup ecosystem in Africa. But even more remarkably, Cape Town is the strongest outperformer in terms of the gap between the index score and the trend line. The most notably outperforming factors are the quality of institutions and ease of doing business.

In terms of GDP per capita, Angola is doing much better compared to other African countries. Nevertheless, it has achieved the lowest index score. How come? Insufficient funding opportunities, a low media coverage and a missing startup DNA are the biggest obstacles the country has to overcome. Private and public institutions, corporations and entrepreneurs have to work together to close the gap in the following years.

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THE RISING STARTUP ECOSYSTEMS

CAPE TOWN,

LUANDA,

SOUTH AFRICA ...is not only positioned first in Africa, but also our global number two with a very dynamic startup culture. The country is culturally and economically well connected to Europe and the US and very well positioned for regional expansion across Africa. The government spends more on education than on any other sector, creating a relatively high educational level.

ANGOLA’S ...single worst indicator is the SSW mindset score highlighting the missing entrepreneurial culture. It seems like Angola is taking the issue seriously.

Angola’s sovereign wealth fund is supporting the development of a number of entrepreneurship projects such as Fábrica de Sabão culture Hub and Cabinda Port Tech Hub & Prototyping Lab. In addition KiandaHub, a private initiative building a coworking space, made headlines recently to seek funding to become Angola’s main startup center.

ADVANTAGES → Two startup hubs with Cape Town & Johannesburg → Good entry point for pan-African expansion → Cheap and excellent quality of life → Availability of basic angel and seed capital

→ You can succeed with a “copycat” strategy → Share the same language & cultural mindset with Brazil and Mozambique

DISADVANTAGES → High income inequality (Gini coefficient: 63.4) → Small domestic market → Available VC money is not enough to scale globally

→ Very young startup culture → High cost of living → Strong focus on oil & gas and undiversified economy

SUCCESS / OPPORTUNITIES Successes: → WeChat launched a $3 million investment fund → Silvertree Capital raised $10 million fund → Investment of $3 million in AzarGen → Woothemes, a Word Press design platform, was acquired by Wordpress in early 2015

Opportunities: → Jobartis has built an online job portal that has over 200,000 users → Build products in Angola that can scale across the Portuguese speaking world

RECOMMENDATION Create incentives for easier and more convenient investments from within and outside of the country

Build a hub to bring the entire ecosystem together

TOP ECOSYSTEM INITIATIVES → TheHookupDinner → Entrepreneur Traction → Silicon Cape

→ KiandaHub → Fundo Activo de Capital de Risco Angolano (FARCA) seedstars.com 63

THE RISING STARTUP ECOSYSTEMS

* Europe Caucasus

and

The Developing Ecosystems

SEEDSTARS INDEX

results for developing countries

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Europe and Caucasus is the region with the smallest gap between the strongest ecosystem Istanbul, Turkey, and the weakest ecosystem Baku, Azerbaijan. The gap between Istanbul and Moscow is only marginal, with a weak Environment score that weights Moscow down.

THE RISING STARTUP ECOSYSTEMS

4 countries in Europe and Caucasus are outperformers, 1 is underperforming AFRICA and 2 are in line with expectations 100

7,6

3,0

8,7

0,4 OVER /

3,8

UNDER PERFORMANCE

0,4 CULTURE

-7,0

ENVIRONMENT

OPPORTUNITY

SSI SCORE 2015

80

60

40

20

Baku Azerbaijan

Belgrade Serbia

Yerevan Armenia

Sofia Bulgaria

Kiev Ukraine

Moscow Russia

Istanbul Turkey

0

KIEV, UKRAINE

BAKU, AZERBAIJAN

Neither the political turmoil, nor the low GDP per capita is an insuperable hurdle for the entrepreneurially driven mindset and the strong startup community. Under the current circumstances, it is even more impressive that Kiev is the highest outperformer in the region. The weights of all three pillars are very equally distributed and above the expected average.

The country is the only underperformer in the region, as its wealth has not yet been channeled into the startup sector to implement a quality playing field for entrepreneurs. Bulgaria for instance, which has almost the same GDP per capita, has a much higher quality of education & training, as well as funding opportunities.

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THE RISING STARTUP ECOSYSTEMS

ISTANBUL,

IN BAKU,

TURKEY

AZERBAIJAN

...is strategically located between three major markets, namely the European Union, Middle East and Russia. In addition, the young and well educated workforce is eager to start new ventures. After the first wave of successful entrepreneurs established a level playing field, a lot of investors started to fund Turkish startups.

We wouldn’t be surprised if the first unicorn was born in 2016!

...it is not the environment which lags behind the other ecosystems. It is the cultural attitude towards startups, as online businesses are still not valued as high as those offline. However, this attitude is starting to change, as we can see by the impressive number of 8 new government incubators that opened in the last two years.

ADVANTAGES → Big consumer market → High mobile phone penetration rate → Moderate competition → Strong governmental support → Full cycle of investment opportunities → Role models and successful exits → Involvement of local success stories in developing the ecosystem

→ Good infrastructure (e.g. internet connection) → Almost no competition → Global thinking from day one

DISADVANTAGES → Geopolitical instability → Low level of English → Difference in development of different regions inside the country

→ Small economy → Brain drain → Lack of investment interest from wealthy people → Dependency on oil export in economy

SUCCESS / OPPORTUNITIES Successes: → Exits: Yemeksepeti $589MM, Pozitron $100MM, Markafoni $200MM → Very active business angels (around 200 people) → Special taxation for business angels

Opportunities: → Using 80mn Turkish market as a first go-to place in terms of growth, since they share almost the same language and culture → Strong community of Azeri diaspora, that return to country after getting education in US or Europe

RECOMMENDATION Improving levels of English for internationalisation

Common culture with neighbouring country should be used as a catalyst

TOP ECOSYSTEM INITIATIVES → Entrepreneurship foundation (Girişimcilik) → ITU Teknokent → Founder’s Institute → Startup Istanbul, Startup Turkey, Webrazzi Summit → Etohum Accelerator 66 seedstars.com

→ Barama Incubator → Sup.az accelerator → Khazar Ventures

THE RISING STARTUP ECOSYSTEMS

*

MIDDLE EAST AND NORTH AFRICA

The Developing Ecosystems

SEEDSTARS INDEX

results for developing countries

Looking at the developing countries in MENA, our index covers the region from Casablanca, Morocco to Dubai, UAE. Dubai ranked highly but is included in our developed markets analysis and unfortunately we didnâ&#x20AC;&#x2122;t have enough data to score the West Bank & Gaza.

Overall demographic trends in MENA, such as 70% of the population under 30 and a mobile penetration rate of 44.3% in 2015 qualify as a big opportunity for the region.

In contrast, the region remains held back by strong cultural barriers and fear of failure.

Nonetheless, the support and investment environment in tech startups is on the rise in the region. Recent exits from Egypt, Kuwait and Lebanon also add to the excitement about the coming few years.

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THE RISING STARTUP ECOSYSTEMS

Only 1 country in MENA is an outperformer while 4 are underperformers and 1 in line with expectations 100

7,2

-0,2

-5,5 OVER /

90

-1,5 UNDER PERFORMANCE

MENA

-4,0 CULTURE

-16,3 ENVIRONMENT

OPPORTUNITY

SSI SCORE 2015

80 70 60 50 40 30 20

Algiers Algeria

Amman Jordan

Casablanca Morocco

Beirut Lebanon

Tehran Iran

0

Cairo Egypt

10

CAIRO, EGYPT

ALGIERS, ALGERIA

The only outperforming ecosystem in MENA does a better job in linking its young and well educated population to opportunities in the startup sector.

Especially in cultural aspects, like media attention and mindset, the population is more open minded than the other 5 countries.

Using GDP per capita as a benchmark, Algiers should achieve a bet ter SSI score than the actual number implies.

Unfortunately, the key elements, such as high innovation capability, easy access to capital and technological readiness, are missing and need to be improved to create a more startup friendly environment.

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THE RISING STARTUP ECOSYSTEMS

CAIRO,

ALGIERS,

EGYPT

ALGERIA

The startup scene in Cairo, Egypt is the fastest growing in the Arab world, despite the political upheavals reigning the country since 2011. Overall, the market is attractive in terms of size (87 million, 50% internet penetration) and the educational background, but raising sufficient amount of money continues to be a challenge for the entrepreneurs.

...is taking its first steps in creating an active startup scene. The government is investing into creating a network of Cyberparks spread around the country.

In parallel, the first private co-working space launched in 2015, and new events are starting to bring together the small but growing tech community in Algeria.

ADVANTAGES → Large market size (50% of Egyptians are under 30) → Big talent pool of engineers and executives → Hiring is inexpensive

→ Bilingual: Courses are offered in Arabic and French → Large population under 30 (70% of 37 million) → Involved expat community in France → Low tax rates

DISADVANTAGES → Weak on internationalization → Poor infrastructure → Access to finance is still complicated by red tape

→ High levels of corruption and red tape → Regulations that discourage foreign investment outside of oil and gas → Cash economy. Debit and Credit card penetration of 4% and 1% respectively

SUCCESS / OPPORTUNITIES Successes: → Instabug (launched 2013) has 25 million users worldwide and moved to Silicon Valley. → Cleantech is growing → The ecosystem has an active pool of angels, seed stage support, and VCs

Opportunity: → Algiers presents an inexpensive location to operate and provide support services close to Europe

RECOMMENDATION → Focus on internationalization

→ Increase the involvement of the expat community in France in the tech startup scene → Facilitate access to finance by opening up to foreign investment & set up a free economic zone where 100% ownership is allowed

TOP ECOSYSTEM INITIATIVES → Flat6Labs startup accelerator → The GrEEK Campus tech park → RiseUp Summit → CairoAngels

→ Public sector’s ANTP → ANTP’s network of Cyberparks

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THE RISING STARTUP ECOSYSTEMS

* Latin America

The Developing Ecosystems

SEEDSTARS INDEX

results for developing countries

70 seedstars.com

Santiago, Chile is our regional winner in Latin America and came in third overall.

The continent faces three major drawbacks: quality of infrastructure, a low level of security and time consuming business administration proceedures.

Governmental willingness to create startup hubs and programs, as well as the positive attitude of the people towards risk, are clear factors that will drive the LatAm startup ecosystems forward.

THE RISING STARTUP ECOSYSTEMS

4 ecosystems in LATAM are outperformers, 4 are underperformers and 2 are in line with expectations MENA 100

7,5

9,3

5,4

2,7

-0,5 OVER /

90

3,6

-1,2

UNDER PERFORMANCE

0,5 CULTURE

-2,2

-9,4

ENVIRONMENT

OPPORTUNITY

SSI SCORE 2015

80 70 60 50 40 30 20

Santa Cruz Bolivia

Lima Peru

San Jose Costa Rica

Montevideo Uruguay

Bogota Colombia

Buenos Aires Argentina

Panama Panama

Mexico City Mexico

São Paulo Brazil

0

Santiago Chile

10

SÃO PAULO, BRAZIL

SANTA CRUZ, BOLIVIA

T hank s to a s t rong Environm e nt pillar, São Paulo is the ecosystem with the strongest outperformance in Latin America. In comparison to San Jose, Costa Rica, which lies directly on the trend line, startups in São Paulo have an easier access to funding opportunities, a bigger national market and the entrepreneurial culture is ranked the highest in LatAm. The current economic turbulence is not to be taken lightly, however these short term cycles do not impact the SSI.

B o l iv ia’s m ain ch al l e ng e s a re t h e lowest GDP per capita and the lowest ecosystem score. The lag in core areas like technological readiness, access to funding and innovation have to be improved to provide a better launchpad for startup activities on the ground.

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THE RISING STARTUP ECOSYSTEMS

SANTIAGO,

SANTA CRUZ,

CHILE

BOLIVIA

There is no magic formula to build a vibrant and dynamic startup ecosystem. If there were one, Chile would be a good place to start looking, because the government did remarkably well with creating Startup Chile five years ago. While Startup Chile community significantly contributed to changing of the cultural mindset, there is still room for improvement, especially from the wider population.

... is an ecosystem which lags far behind the average in all factors we used to create the index. Therefore, it comes as no surprise that the whole ecosystem is at a very early stage. Nevertheless, the government is now working on a plan to boost the technology integration in the country, so we are curious to see what the next years are going to bring.

ADVANTAGES → Startup Chile as a seed accelerator created by the Chilean Government → Stable economy → Strong retail sector

→ Close to Argentina and other big markets → Universities started to realise the potential of startups as a catalyst for the economy

DISADVANTAGES → Small market → Principally government funded initiatives

→ Weak transportation system → Weak internet connection → No incubators or accelerators

SUCCESS / OPPORTUNITIES Successes: → Snapp got funded 400k → Startup Chile has invested in over 1,200 companies in 4 years.

Opportunity: → Anything to improve logistics

RECOMMENDATION Incentivise the startups to stay in Chile even after the end of the Startup Chile program

Attract incubators and accelerators

TOP ECOSYSTEM INITIATIVES → Startup Chile → Fiis

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None at the national level, but the government is planning to support a creation of a city of software

THE RISING STARTUP ECOSYSTEMS

“The best way to predict the future is to create it.”

- Peter Drucker

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OPPORTUNITY

Opportunity boils down to talent, funding, training & mentoring and the market size. The local market size is part of the overall score but does not automatically guarantee you a top spot.

For example, Indonesia is 4th in our list of countries in terms of population but comes in 23nd in the ranking due to weaker talent and funding scores. Here is how the markets look side by side.

Nairobi - Kenya

Montevideo - Uruguay

Panama - Panama

Jakarta - Indonesia

Buenos Aires - Argentina

Mexico City - Mexico

Cairo - Egypt

Beirut - Lebanon

Bangkok - Thailand

Moscow - Russia

Bogota - Colombia

Istanbul - Turkey

Cape Town - South Africa

Santiago - Chile

Sao Paulo - Brazil

Bangalore - India

Dubai - United Arab Emirates

Kuala Lumpur - Malaysia

Shanghai - China

Taipei - Taiwan

Sydney - Australia

SSW Home - Switzerland

Hong Kong - China

Seoul - South Korea

Singapore - Singapore

Silicon Valley - Benchmark

THE RISING STARTUP ECOSYSTEMS

100

80

60

40

20

0

THE RISING STARTUP ECOSYSTEMS

Luanda - Angola

Yangon - Myanmar

Santa Cruz - Bolivia

Maputo - Mozambique

Algiers - Algeria

Addis Ababa - Ethiopia

Dakar - Senegal

Dhaka - Bangladesh

Dar Es Salaam - Tanzania

Baku - Azerbaijan

Kigali - Rwanda

Gaborone - Botswana

Karachi - Pakistan

Abidjan - Cote d'Ivoire

Belgrade - Serbia

Kampala - Uganda

Yerevan - Armenia

Accra - Ghana

Tehran - Iran

Casablanca - Morocco

Lima - Peru

Lagos - Nigeria

Hanoi - Vietnam

San Jose - Costa Rica

Amman - Jordan

Kiev - Ukraine

Sofia - Bulgaria

Manila - Philippines

A deeper dive into the 3 pillars

Case Study Opportunity - Accra, Ghana J u s t h ow c a n yo u i n f l u e n ce t h e Opportunity in an ecosystem? Funding will only come when there are good investments to be made. Mentors and experts generally have a previous success stor y and arenâ&#x20AC;&#x2122;t common in a young ecosystem. And you cannot change the market size easily, except perhaps by removing some trade barriers. So where do you start? The Meltwater Entrepreneurial School of Technology (MEST) in Ghana

is the perfect example of an initiative tackling this problem hands on. Aiming to increase the number of experienced and skilled entrepreneurs in the market, they are bringing in external mentors to provide experience and guidance to their students and also positively impacting the funding with their own equity investments.

With such a complete solution to boost an ecosystemâ&#x20AC;&#x2122;s Opportunity, we decided to talk in-depth with MEST to learn more.

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THE RISING STARTUP ECOSYSTEMS

“We believe that talent is everywhere.

Unfortunately, resources are not.”

Walk into the Meltwater Entrepreneurial School for Technology on a Friday afternoon and you’ll see Ghanaian students hunched over laptops and Android phones.

The buzz of the room has an energy of its own, and you cannot help but wonder where all of this has come from.

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The Meltwater Entrepreneurial School for Technology, also known as MEST, has been our partner in Ghana for more than three years. While in many of the African countries access to general education is still a challenge, MEST provides training, mentoring, and investment in world-class tech entrepreneurs, with the goal of creating globally successful companies.

We spoke with Katie Sarro, their Director for Business Development, about what it takes to be a successful entrepreneur and how the technology landscape in Africa is changing.

SSW: Hi Katie. MEST is fully backed by The Meltwater Foundation, a not for profit arm of the Meltwater Group. What motivated Meltwater to open a school for entrepreneurs in the middle of Africa?

KS: As you know, Meltwater itself is a hugely successful startup. It is the fourth company of our CEO, Jorn Lyseggen, and at that time, he is the kind of person who really wanted to do something and to give back. He is a big believer in the fact that talent is everywhere, but resources are not. Since entrepreneurship and software is something that Jorn is inherently passionate about, he wanted to make it the key focus of the school and prove that you can start a software company anywhere in the world, as long as you have a decent internet connection.

THE RISING STARTUP ECOSYSTEMS

“The skill level of developers in Africa has completely risen over the past 5 years”

SSW: Why did he decide to focus on Ghana?

KS: We landed on Africa, because it was a continent that was really scarce on resources. There was a strong need for a programme like this, and since Ghana is English speaking and the political situation was relatively stable, it seemed like a perfect fit. What is even more exciting is that this year we are preparing an expansion into three different countries, which would make us the very first incubator with a pan african presence.

SSW: What is the one thing that all your students have in common?

KS: During the recruitment process, we often hear reasons, such as “I want to turn Nigeria into a better Nigeria”, “I want a better livelihood for my family”. There are some who aspire to be a globally successful entrepreneur. At the end of the day, they are all passionate about software and about creating meaningful software that can solve the world’s biggest problems.

SSW: Do you think formal education is a crucial component for becoming a successful entrepreneur?

KS: Let’s say there is a big pothole on the road that you pass by every day. What differentiates you from the others is that you actually stop by and say, “Hey, I want to fix this and I know how.” This is something we cannot teach. You either have that entrepreneurial drive or you don’t. But there are things that you can teach, such as reading a P&L and how to manage a tech team. There is a proper training that definitely needs to take place before you

Katie Sarro, Director for Business Development

can become an entrepreneur. We are not saying you cannot learn it on the go, but you are in a much better place if you have a year of formal training before you start your entrepreneurial journey.

SSW: Are there any notable trends in technology that you observed?

KS: The skill level of developers in Africa has completely risen over the past 5 years.

Something that has not been popular is now completely commonplace. Young people are growing up being mobile gamers or tech entrepreneurs. We are also witnessing a rise of tech hubs, such as iHub or Nairobi Garage.

People are gravitating to these places, which are becoming learning centers and places for the tech community to meet. Thanks to this, people are getting exposed to technology much sooner than they ever have.

SSW: What is causing these changes?

KS: It is the need to leapfrog technology.

Africahasbeenknownasthelaggerintechnology, but the rise of mobile is changing this with an unprecedented speed. Literally everybody has a mobile phone, and once you put something that is accessible in their hands, you give them power. And we circle back to where we started.

The resource is there. The talent is there. The know-how is there. The brilliance is there. All they were missing was an access to technology, or an exposure to a laptop. The rise of mobile has been an absolute gamechanger, making technology easily accessible to masses. It became more popular and it became part of the culture. With these resources being now widely available, there is no limit to what entrepreneurs from Africa can achieve

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ENVIRONMENT

Environment is evaluated by institutions, ease of doing business, infrastructure and technological readiness. This is our only pillar where the United States is not positioned first. All 5 countries which are ahead of the United States share some common similarities like the small population, a high GDP per capita (expect Australia), lower debt ratio and a remarkably strong legal and administrative environment.

Belgrade - Serbia

Gaborone - Botswana

Mexico City - Mexico

Jakarta - Indonesia

Yerevan - Armenia

Amman - Jordan

Kigali - Rwanda

Baku - Azerbaijan

Casablanca - Morocco

Shanghai - China

Sofia - Bulgaria

Bangkok - Thailand

Istanbul - Turkey

San Jose - Costa Rica

Panama - Panama

Cape Town - South Africa

Montevideo - Uruguay

Santiago - Chile

Kuala Lumpur - Malaysia

Seoul - South Korea

Taipei - Taiwan

Silicon Valley - Benchmark

Sydney - Australia

Dubai - United Arab Emirates

SSW Home - Switzerland

Hong Kong - China

Singapore - Singapore

THE RISING STARTUP ECOSYSTEMS

120

100

80

60

40

20

0

Luanda - Angola

Yangon - Myanmar

Lagos - Nigeria

Kampala - Uganda

Dhaka - Bangladesh

Maputo - Mozambique

Addis Ababa - Ethiopia

Dar Es Salaam - Tanzania

Algiers - Algeria

Karachi - Pakistan

Santa Cruz - Bolivia

Dakar - Senegal

Beirut - Lebanon

Abidjan - Cote d'Ivoire

Buenos Aires - Argentina

Cairo - Egypt

Bangalore - India

Tehran - Iran

Accra - Ghana

Nairobi - Kenya

Kiev - Ukraine

Moscow - Russia

Hanoi - Vietnam

Lima - Peru

Bogota - Colombia

Manila - Philippines

Sao Paulo - Brazil

THE RISING STARTUP ECOSYSTEMS

Case Study Environment - Montevideo, Uruguay Although it is a small market of 4 mil l ion p e ople , Ur uguay has a ve r y solid startup ecosystem which started off in the early 2000s. The increase in entrepreneurial activities is linked to the arrival of Endeavor, which helped to foster high quality entrepreneurs who, in turn, help mentor the entrepreneurs in the country today. Another defining player of the ecosystem was the ORT, which funded the first incubator in the country back in 2001: Ingenio. Since then, the Uruguayan government has created the ANII, the National Agency for Innovation and Research, with the backing of the IDB, the Inter-American Development Bank. It has also supported several initiatives, such as Softlandings, a program that provides capital to foreign startups if they set up

business in the country. But what really differentiates Uruguay from its neighbors is itâ&#x20AC;&#x2122;s incredibly stable economy and political situation, as well as its notable middle class. It is ranked first by Transparency International as the least corrupt country in the region, and coming ahead of countries such as Austria and France. Uruguay has created an environment welcoming to foreign investment: the legal framework is stable and dependable and in terms of policy, its infrastructure is highly developed and acknowledged to be one of the top countries for software. Uruguay is also well known to be progressive in several fields, such as gay rights and marijuana consumption, which has helped Uruguayan entrepreneurs create products adapted to emerging markets and developed markets! seedstars.com 79

THE RISING STARTUP ECOSYSTEMS 100 90 80 70 60 50 40 30 20 10

Culture is the most complicated pillar to measure with several qualitative factors such as mindset, networks, events and media.

The playing field in this dimension is leveled as progress can be made by grassroots initiatives with little investment and no political intervention. However, it is also the factor where the overall average across all the countries is the lowest at just 47. It is also the area in which the Unites States has the biggest advantage, a 31 point lead of the runner-up, South Africa. The sheer energy, cultural acceptance, celebration of failure and household name tech billionaires in the United States has not come close to being replicated anywhere else in the world.

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Kampala - Uganda

Nairobi - Kenya

Belgrade - Serbia

Yerevan - Armenia

Shanghai - China

Hong Kong - China

Manila - Philippines

Santiago - Chile

Jakarta - Indonesia

Bangkok - Thailand

CULTURE

Dubai - United Arab Emirates

Lagos - Nigeria

Sydney - Australia

Kuala Lumpur - Malaysia

Tehran - Iran

Istanbul - Turkey

Buenos Aires - Argentina

Mexico City - Mexico

Cairo - Egypt

Seoul - South Korea

Singapore - Singapore

Sao Paulo - Brazil

Kiev - Ukraine

Bangalore - India

Moscow - Russia

Cape Town - South Africa

Silicon Valley - Benchmark

0

Algiers - Algeria

Yangon - Myanmar

Luanda - Angola

Gaborone - Botswana

Amman - Jordan

Casablanca - Morocco

Maputo - Mozambique

Addis Ababa - Ethiopia

Santa Cruz - Bolivia

Abidjan - Cote d'Ivoire

Dhaka - Bangladesh

Karachi - Pakistan

Lima - Peru

Baku - Azerbaijan

Dakar - Senegal

Montevideo - Uruguay

Accra - Ghana

Dar Es Salaam - Tanzania

Kigali - Rwanda

San Jose - Costa Rica

Hanoi - Vietnam

Taipei - Taiwan

Beirut - Lebanon

Sofia - Bulgaria

SSW Home - Switzerland

Bogota - Colombia

Panama - Panama

THE RISING STARTUP ECOSYSTEMS

Case Study Culture - Kiev, Ukraine Kiev makes in into the top 5 in our index for Culture. Apart from coming in top 3 countries in the world to provide IT outsourcing services, it has also built a full chain of startup ecosystem. Being inspired

by Ukrainian success stories like Jan Koum, the founder of WhatsApp and Max Levchin, the co-founder of PayPal, young Ukrainians are getting more involved in building their own products. And after having a couple of successful exits (Looksery bought by SnapChat for $150 mn, Viewdle acquired

by Google for $30+ mn etc.), Ukrainians start to consider an ICT entrepreneurship as a valuable career choice. Because of the unstable situation in the Eastern part of the country and the consequent devaluation of the local currency, IT becomes regarded as a favourably stable job opportunity. The largest cities of the country host several startup events per week and the trends and news of the Ukrainian startup ecosystem are easily accessible on the local online media sources.

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THE RISING STARTUP ECOSYSTEMS

What was all this for again?

“IF SOMETHING IS IMPORTANT ENOUGH, YOU SHOULD TRY. EVEN IF THE PROBABLE OUTCOME IS FAILURE.” - Elon Musk, CEO of Tesla Motors & SpaceX

A startup ecosystem is defined by success stories and the entrepreneurs who write them.

In Making Entrepreneurship Contagious, the two Wharton School authors demonstrate that successful startup entrepreneurs have a massive impact on the ecosystem by

mentoring new entrepreneurs, investing capital, offering a helping hand and starting new companies themselves. In fact, they managed to link 80% of all startups in Buenos Aires back to three big hits - MercadoLibre, Patagon and Officenet.

Bringing this back into context of the SSI ranking, the single focus of young e co s ys te m s s h o u l d b e o n cre at i n g success stories that become the catalyst of the ecosystem and drive it forward.

Successes from the diaspora can also be worked back into the ecosystem if local success stories are not currently on the horizon. The catalyst effect of a success is evident in each pillar. With the Culture, a success story can inspire others and give the community a new role model. If the successful entrepreneur can become a mainstream figure, they’ll impact the mindset and cultural acceptance too. The Environment is harder for a successful entrepreneur to impact in the short term but they are more likely to get facetime with politicians and be able to influence the priorities and outcomes for the benefit of the rest of the startup community.

The Opportunity axis is influenced when the successful entrepreneur becomes a mentor, launches new ventures, begins

angel investing and trains more and more employees to a higher standard deepening the talent pool. As far as we know, no other factor has yet been demonstrated to have more positive impact on an ecosystem than success, and Seedstars World is here to discover future success stories and help them get there faster.

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Overall, the SSW index is built to measure the quality, maturity and potential of an entrepreneurial ecosystem. It provides an insight into our experience and learnings we gathered throughout this year’s tour.

We hope that is serves as a wake up call for some and an eye opener for others.

Our ultimate aim, after all, is to shift ecosystems up the ladder and give all the great talent we discover the best possible chances.

THE RISING STARTUP ECOSYSTEMS

“Success is not final, failure is not fatal: it is the courage to continue that counts.”

- Winston Churchill

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THE RISING STARTUP ECOSYSTEMS

Looking for solutions in the outer space And for us here at Seedstars World, 2015 was also a big year for space.

2015 What a year for space!

From NASA’s discovery of water on Mars, to the first flyby of Pluto, all the way to the first successful landing back on Earth of SpaceX’s Falcon 9, it’s been a leap year for humanity in space.

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As we hopped from country to country on our tour, we were in for a ride with some very special guests: AP-Swiss, the joint initiative of the European Space Agency and the Swiss Space Office to promote new satellite applications, and Inmarsat Global, a global leader in mobile satellite communications. We talked with Jose Achache, the Managing Director of APSwiss, about the potential of space technologies and how they can be applied to the startups we discovered around the world.

SSW: What was your main objective of collaborating with Seedstars World this year?

JA: At Inmarsat and AP-Swiss, our main mission is to support technologies leveraging space and powered by satellites. The cost of satellite technology is constantly decreasing. Space is no longer the exclusive playground of governments and major corporations. Now you can use satellites to build technologies that will usher in a new era of exploration and discovery. And thanks to our collaboration with Seedstars World, we were able to identify promising technology startups from around the world, starting from Chile, passing through Serbia, Ukraine and South Africa, all the way to South Korea and Indonesia.

SSW: Which market is of primary interest to you?

JA: After discussions with Inmarsat, we decided to initially focus on MENA. Our main aim was to evaluate the potential benefits of this joint undertaking, and MENA stood out as a natural candidate. Main reason would

THE RISING STARTUP ECOSYSTEMS

be the geographical proximity to Europe, thanks to which it is easier for European countriestoaccessthesemarkets.Partnerships with the African region are also the primary target for ESA and Inmarsat, with whom we work very closely, so it was a clear fit.

SSW: What were the main learnings from the tour?

JA: It was very refreshing to see all the very lively startup ecosystems around the world, which I didnâ&#x20AC;&#x2122;t necessarily expect.

Not surprisingly, we discovered that the use of satellites is not widespread and is still in the making. Most of the events that we attended had only a few projects that were targeting space or using space.

Nevertheless, thanks to the event we were able to connect with people who had activities related to satellite technologies, even though they were not directly part of the competition.

SSW: Were there some common trends that you observed?

JA: All of the applications we discovered needed the Internet connection to be fully functional, but they sometimes operated in areas where GSM connectivity is not necessarily available. Whether it is Maptasker that needs to locate workers even in areas outside of the GSM coverage, or Merchandiser that needs to connect supermarkets with the retailers, it is always the same context.

There will eventually come a point, when they need to use satellites for improved connectivity, and that is where Inmarsat is providing value.

SSW: In our previous interview you mentioned that satellites might be especially useful when dealing with FMCGs. Did you find a project that was working in this industry?

JA: I have encountered two, actually. One of them was a company in Indonesia, which was responsible for tracking FMCGs (fast moving consumer goods). As you can imagine, as long as you are operating in the big cities, you can get reasonably good connection.

However, when you start going to the more distant islands, such as Kalimantan or New Guinea, the Internet connection there is virtually nonexistent. To reach their users, the company would need to go via satellite, and that is what space can provide.

SSW: Why arenâ&#x20AC;&#x2122;t the startups already leveraging these technologies?

JA: Because they are not aware about them, and there is a lot of education that still needs to be done. In that sense, the whole idea of a space prize was extremely successful, because it demonstrated how badly this is needed. We need to continue doing our homework and do more promotion of space and its capabilities.

SSW: Bearing that in mind, what are going to be the next steps for Inmarsat and AP-Swiss?

JA: Of course, the next challenge would be how much and how far the startups are capable of actually integrating the technology in their devices. Those who are developing software or smartphone apps, may not have the technical skills needed to integrate these technologies, and we will work with them more closely in the future. With that aim, we are setting up an incubator in Switzerland to foster these developments. We will see which of the companies we have identified will benefit from the incubation and work with them more closely to incorporate the satellite technologies in their products and help them scale to new, previously inaccessible, regions. seedstars.com 85

â&#x20AC;&#x153;In a world of scarce resources, globalization without new technology is unsustainable.â&#x20AC;?

- Peter Thiel, author of Zero to One: Notes on Startups, or How to Build the Future

2.

BUILD

THE RISING STARTUP ECOSYSTEMS

SO WHO IS THE TEAM

BUILDING COMPANIES

AT SEEDSTARS? We are entrepreneurs ourselves.

Based on all our interactions and experience, we know now better than ever how to process and systemize venture building, i.e. bringing an idea to a company, solving a real pain with profitable unit economics (from zero to one) and growth or acceleration, i.e. accompanying driven entrepreneurs like our Seedstars World competition winners to find the recipe for repeatable growth (from one to n).

More than a global brand, Seedstars provides methods and expertise to build solutions that solve local pains.

Because we are all about “pain killers,” rather than “vitamins”.

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THE RISING STARTUP ECOSYSTEMS

RUBEN ALMEIDA

ALEXANDRE WEBER

LUIS RODRIGUES

FERNANDO FERREIRA

PIERRE-ALAIN MASSON

PATRICIO FERNANDES

BENJAMIN BENAIM

PEDRO GOMES

MICHAEL WEBER

HUGO RODRIQUES

SEEDSTARS IS NOT THE ONLY ONE BUILDING. DISCOVER SOME OF THE OTHER “BUILDERS” WE’VE MET AROUND THE WORLD AND HOW THEY ARE SOLVING LOCAL PAINS. seedstars.com 89

THE RISING STARTUP ECOSYSTEMS

Giving access to education With 94.1 million inhabitants, Ethiopia is the second largest African population, as well as one of the youngest ones, with an average age of 18.9-years-old. Since 80% of the population lives in rural areas, parents are often unable to meet the high costs of educational facilities. This makes it even tougher for girls living in rural areas to make it. Ethiopian families value girls for their ability to work. There is a great disparity between both genders in literacy, and parents often choose boys over girls to attend school.

Samrawit 15 years old, not going to school.

Samrawit is 15 and lives in Axum, a 56,000 inhabitant rural town in the northern part of Ethiopia. It is known for its stelae, churches, monasteries, tombs and its palace ruins. It was declared a UNESCO World Heritage site in 1980.

Samrawit lives there with her parents and her four other siblings.

She spends her days helping her mother with house work, cooking, and collecting water.

THE PAIN

THE SOLUTION

Because she is a girl, Samrawit has a lower chance to be taken to school by her parents. She is more likely to be doing house work until she reaches age at which she will marry.

Fidel by AhadooTech is a mobile learning platform available both as a native Android app and a web app. It enables Samrawit to access social, personalized and gamified learning. She can now access her studies in an affordable and user friendly manner. She has access to high quality educational content and can keep learning, while helping her mother with house chores.

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When solar power meets farming 75% of Kenyans (with an estimated population of 45 million) make a living by farming, although only 20% of Kenyan land is suitable for farming. The majority of farmers end up suffering from draughts. Without sufficient rainfall to provide water for crop growth, communities are faced with food shortages and famine.

George 44 years old, farmer George Mugo is a 44-years-old farmer born and raised in Gikambura, a small village in the Central Province of Kenya located in the Rift Valley, known for its maize agriculture. Gikambuka is an isolated city where there is no electricity access. George lives in Gikambura with his wife Sharon and their four children.

He takes care of the maize fields on a daily basis. Sharon must walk 3 hours every day with her daughter to collect water.

THE PAIN

THE SOLUTION

Georgeâ&#x20AC;&#x2122;s farm regularly suffers from droughts, and Sharon is unable to bring enough water to meet the needs of the whole family. Both parents do not have access to bank services. They are not connected to the city and the lack of water and electricity prevents them from growing and modernizing their farm.

Illuminum Greenhouses provides George with an automated drip irrigation kit equipped with solar powered soil sensors that optimize water use and conservation. George can now optimize his farmâ&#x20AC;&#x2122;s water consumption, and leave more water for his wife and children. He is able to monitor his irrigation system remotely and in real time by SMS. Real time monitoring combined with solar powered electricity enables him to leverage technology to grow his business.

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When the poorest are enabled to climb the pyramid In Nigeria, the wealth is distributed very unequally. 20% of the population earns almost 60% of the total income.

Out of 170 million people, over 135 million are unemployed. The gap between the rich and poor is too large, which makes the BoP population unable to climb the social ladder. One of the main assets that allows people to generate revenue is a car, which is still unaffordable to the BoP for two reasons: they cannot finance it and they have no access to loans: 70% of the population is unbanked.

Victor 37 years old, hopeful father Victor is a 37-years-old father living in Gwarimpa, one of the poorest districts of Abuja. It is located next to Asokoro, a multibillion real estate area where the wealthy people reside.

The disparity between rich and poor is strikingly obvious. Victor lives in a slum with his wife and five children.

THE PAIN

THE SOLUTION

Victor is struggling to provide his family with a sustainable future. He makes a living with trash recycling, but the income is not enough to pay for his childrenâ&#x20AC;&#x2122;s education. He cannot access bank loans, so when he needs a higher amount of money in case of emergency, he relies on his brother Emmanuel.

Bashi has identified a solution for Victor to climb the social ladder. The Nigerian startup will buy a car for Victor, who will drive it as an Uber Driver, and generate revenues for Bashi. Victor gets a monthly salary, and can simultaneously reimburse the cost of the car through Uber revenues. In two years, Victor will eventually own the car and dispose of a decent source of revenues, together with a sustainable investment on the car. He will be able to provide his family with a better living.

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Optimizing the merchandising process in MENA The process of merchandising in emerging countries like Lebanon is not optimized. Fast Moving Consumer Goods companies still monitor the process of merchandising on paper, which makes the process very inefficient.

Nassim 28 years old, Head of Sales Nassim is a Head of Sales at a beverage company in Lebanon. He is aiming to increase his sales, and make sure to maintain competitive prices.

The consumer spending in Lebanon has increased from in 2010 to in 2014.

Nassim wants to leverage the increasing consumer purchasing power and sustain business growth.

THE PAIN

THE SOLUTION

Nassimâ&#x20AC;&#x2122;s approach to managing and monitoring his sales is not very practical. He uses a paperbased process, which prevents him from knowing when exactly products become unavail able or are improperly displayed in real time.

Data is not only delivered late, but also its processing and analysing is time consuming and costly. Nassim is missing key data affecting his sales efficiency.

Codefish has launched Merchandiser, a web & mobile solution that automates the merchandising process. Merchandiser aims to be a link between FMCG companies and retailers, which enables Nassim to visualize his shelves, monitor his sales, as well as competitorsâ&#x20AC;&#x2122; prices, and automatically analyse data in real time.

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â&#x20AC;&#x153;Our product came out of a clear need.

That is why I love itâ&#x20AC;?

How often do you walk into a store and realise that the product you wanted to buy is missing? Time and again, it must have happened to all of us.

Have you ever thought about who actually monitors this data and how are supermarkets ensuring that you have everything you want at hand?

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We talked with Emile Harb, the co-founder of Merchandiser a software solution empowering management with analytics to reduce significant loss in sales by automating the merchandising process.

SSW: Can you briefly describe the problem that inspired you to build Merchandiser?

EH: When you are managing supermarkets, manufacturers and distributors, you face many challenges. You need to track which products are on the shelves, when they are empty, how often are they getting refilled, or if the promotions are done properly. Usually, each of these companies have a sizeable team of merchandisers, who are working on the ground to check the process and see that the shelves are constantly being refilled. However, it was very surprising for us to discover that a lot of large scale companies still use pen and paper to conduct the whole supervision.

Just imagine! You spend millions of dollars on promotions, and the final moment of truth depends on the five seconds the consumer spends on the shelf. Therefore, it is crucial to optimise the shelves as best as possible to reduce any potential losses and maximise sales. Our product came out of a clear need. That is why I love it.

SSW: Apart from digitalising the whole process for merchandisers, what kind of analytics are you providing?

EH: An example would be efficiency

THE RISING STARTUP ECOSYSTEMS

“The final moment of truth depends on the five seconds the consumer spends on the shelf.”

“What matters, at the end of the day, is how much of the client’s needs you can satisfy.”

analytics for the merchandisers. Their managers always wonder if the time they spend in the supermarket is justified. That is why we provide them the duration trends of the merchandisers compared to the global average. This way, they get an exact idea of how much other merchandisers spend in these stores, and if the team is operating efficiently. Another analytics that we provide are unavailability trends.

If a specific SKU (stock keeping unit) is missing on average 5% during the merchandiser’s visits, the management can set a target to decrease this percentage.

If you manage to drop it, it will automatically generate additional hundreds of thousands of dollars of sales.

In the software industry, unlike what a lot of people think, up to 70% is about customer support. Everybody can have a good software, it is not rocket science. What matters at the end of the day is how good you are with support and how much of the client’s needs you can satisfy. Especially when you are dealing with sensitive data. That is what wins a client and what keeps a client.

SSW: You are currently operating in Lebanon. Are you planning to scale also within the region?

EH: Definitely. The beauty of Merchandiser is that we do not really have any barriers to enter a new country. There are always products on the shelves of supermarkets and there are always people on the ground.

In addition to that, once we acquire a larger client, there is a lot of potential for crossselling in other countries, since we are already familiar with their requirements and they are often happy to establish the necessary connections.

SSW: To wrap up, how would you assess the startup environment in Lebanon?

EH: Just a few years ago, the country was not paying sufficient attention to the startup ecosystem. However, since the central bank decided to inject sizeable amounts into the industry, we see a lot of international VCs coming into town, and the rise of incubation services. Especially since the startup ecosystem is still in its infancy, the support of the government is crucial and the amount of opportunities promises Lebanon a bright future.

SSW: What are the main challenges that Merchandiser is facing right now?

EH: Honestly, working with supermarkets is challenging. They have their own set of rules, and are very sensitive about the information we are collecting. That is why it is incredibly important to build a relationship of trust, especially in the region in which we are operating. The second challenge is that these companies have very different processes set in place. They have their own needs and which information they want to see. Therefore, if you are talking to Nestle Waters, the discussion is going to revolve around different topics than if you are talking to a local supermarket.

SSW: What distinguishes you from other players active in this industry?

EH: This specific industry is incredibly competitive, and we need to move very fast.

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Optimizing waste collection routes for trucks In Turkey, waste collection costs up to EUR1.3 billion combined with EUR650 million costs in logistics. Truck waste collection process is not optimized.

Money is lost, and CO2 emissions are over the limits.

Burak 31 years old, recycling truck driver Burak is a 31-year-old, working at a Turkish waste collection company in Ankara, a cosmopolitan city at the crossroads of Europe and Asia. Known for its artistic culture, Ankara is home to the Presidential Symphony Orchestra, the State Opera and Ballet, and several national theater companies.

As a truck driver, Burak’s mission is to keep the city as cultural as it has always been, by collecting the garbage across the town.

THE PAIN

THE SOLUTION

In order to collect the garbage, Burak usually takes the same route starting at Mithatpaşa Avenue and ending at Ayten Sokak, a popular neighborhood of Çankaya district.

He happens to come across empty garbage bins and ends up wasting f u e l , e m i t t i n g h i g h a m o u nt s of CO2 that could be avoided.

Burak reports high costs of fuel to his top management, which is unfortunately unable to provide him with a cost effective and timely process.

Evreka is a real time connected s e n s o r, w h i c h m e a s u r e s t h e filling rates of garbage bins. This revolutionar y module repor ts to truck drivers the garbage bins filling rate, their GPS location, as well as their temperature, which enables Burak to optimise his routes on a daily basis. He uses a tablet that automatically shows him the best road to take. The results are automatically reported to the top management, that is now able to decrease emissions up to 45%.

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Smart green houses for a flourishing agriculture One third of Iran’s surface is suitable for agriculture. However only 12% of the total area is cultivated. This is due to poor soil and lack of adequate water distribution across cultivable areas. In fact 92% of agro products depend on water, but less than one third of the cultivated area is irrigated.

Shayan 38-years-old, farmer Shayan is a 38-years-old farmer living in Saveh, a city located in the province of Markazi, the central area of Iran. It is famous for its pomegranate, cantaloupe and pistachio agriculture.

About 50% of Markazi’s population lives in rural areas. Most of them make a living out of farming and animal husbandry.

THE PAIN

THE SOLUTION

Each year, Shayan is seeing his production loss increasing. Due to tough weather conditions, he must be extremely careful when it comes to monitoring his greenhouses to avoid production loss. However, the temperature control is often out of service and the greenhouse temperature is suboptimal and water irrigation timing imprecise.

His agriculture greenhouse is tough to manage. As a result, Shayan is not able to tend to his fields as much as he could, which leads him to production loss.

Smar t Been has developed smart IoT tools for greenhouses.

The startup offers farmers like Shayan connected sensors and devices that analyze the health of his greenhouse. Smart Been’s connected tools enable Shayan to have healthy fields all year round.

They automatically irrigate his pomegranate and cantaloupe, and send alerts to his remote touch pad. With a system fully localized in Persian, Shayan will not have to worry about revenue loss.

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The world’s best doctors in Afghanistan, just one click away In Afghanistan, healthcare systems cannot train enough medical specialists to address the rapidly growing needs of the country. There is only one radiologist per 400,000 inhabitants.

Sohail 46 years old, miner Sohail is 46-years-old and works as a miner in Hajigak iron ore deposit in central Afghanistan, located in the Bamiyan province, a region famous for its iron abundance.

It is estimated that 30% of the untapped country’s mineral deposits are worth between USD900 billion and USD3 trillion.

THE PAIN

THE SOLUTION

Sohail has just been diagnosed with a lung infection. According to his doctor, thereisahighamountoffluidinhislungs, whichheneedstogetremovedthrough a surgery. In Hajigak, health care services are scarce, and doctors are not qualified enough.Theonlysolutionforhimistogo to India where the healthcare system is more developed. When Sohail arrives to Bangalore,morequalifieddoctorsinform him that he does not need an operation, but only an antibiotictreatment.IfSohail have had a proper diagnosis in Kabul, he wouldn’t have spent his savings on the travel costs to India.

AlemHealth is a web platform that connects hospitals in developing countries to a global network of diagnostic specialists around the world at affordable prices. Sohail can now have a proper and reliable diagnosis in Kabul from highly qualified specialists.

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When female doctors can finally find employment In Pakistan, 50% of female doctors never practice after graduation, due to sociocultural barriers. Because of social pressure, the majority of them end up staying at home.

Unemployment of female doctors is combined with little or no access to quality healthcare by 90% of the population. 120 million people cannot afford quality healthcare and 37% of Pakistanis are unable to access to healthcare due to distance and transportation barriers.

Mariam 34 years old, Gynecologist Mariam is a 34-years-old doctor living in Lahore, the closest urban city to Sahiwal, which is four hours away by car.

She is a gynecologist aspiring to a bright career in Pakistan. Ayesha is 23 and lives in Sahiwal in central Punjab, one of the poorest cities in Pakistan.

The weather in Sahiwal does not forgive, reaching as high as 45 degrees Celsius in the summer and dropping to just two degrees Celsius in the winter.

THE PAIN

THE SOLUTION

Ayesha urgently needs to consult a gynecologist. However, there is no doctor in Sahiwal, and the closest urban city is Lahore. Mariam, despite her ambitions, cannot open her own clinic due to social barriers.

DoctHERs is a healthcare online mar ket pl ace t hat conne c t s female doc tors to millions of underserved patients in real-time.

DoctHERs provides an employment opportunity to Mariam through a web platform that enables her to run accurate and personalized consults. For Ayesha, DoctHERs has put in place a physical â&#x20AC;&#x153;point of careâ&#x20AC;? in rural areas, where she will be able to have her consult remotely, with the support of reliable nurses trained by Communit y Health Workers. seedstars.com 99

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Automatizing school management Public and private schools in Myanmar have to do deal with burdensome administrative tasks - heavy loads of paperwork and significant manual administration tasks. The school staff ends up focusing more on school administrative management rather than the education itself. There are over 36,638 primary schools, 2,795 high schools and over 151 colleges and universities in the country.

Shin Maha Buddhaghosa National School, Managing 2,500 students on paper Shin Maha Buddhaghosa National School is located in Mawlamyaing, in Pabedan Street. It welcomes over 2,500 students, with a wide variety of social, financial and ethnical backgrounds. It was established in 1899 by Sāsanādhāra Society during the British colonial period.

THE PAIN

THE SOLUTION

In Shin Maha Buddhaghosa National School, teachers earn on average $2 5 a mont h . T he school’s administration tasks are still done on paper, not only giving teachers additional work in terms of administrative tasks, but also requiring the school to hire an additional staff, which presents an additional cost to the school. The school’s management has many inefficiencies that cost the school time and money.

School Administrative Management Systems (SAMS) by U.M.S Queen is a software solution providing a 360° management for schools. From Student Affairs, Exam Management, to Human Resources, Financial Control, Inventory Control and many other administration management modules, SAMS is making school management in Myanmar simple, easy and efficient. The Shin Maha Buddhaghosa National School staff can now focus on what’s actually important: Education.

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Access to reliable pharmacy drugs With over 250 million people, Indonesia is the fourth most populous country in the world.

The local healthcare market has a yearly revenue of $25 billion.

Yet, Indonesian consumers do not have an easy access to pharmacy drugs. Reliable pharmacies are scarce, people don’t have enough knowledge about drugs and the few pharmacies that exist are often out of stock.

Ayesha 24 years old, student Annisa lives in Jakarta in the Barat District, the western part of the capital.

It is home to the only surviving old town area “Jakarta kota tua,”a small area surrounded by Dutch colonial buildings.

Streets are populated by artisan product vendors, artists and Jakarta’s youth.

Annisa is 24-years-old and studies at University of Indonesia, located in Depok.

She must take the train for 2 hours each morning to get to Depok and study.

THE PAIN

THE SOLUTION

Annisa regul arly suf fers from digestive problems. To prevent microbes from striking, her doctor recommends her to take preventive medicine on a regular basis. However, she cannot find prescribed drugs in the pharmacies around her neighborhood. The pharmacist is not familiar with the medicine, and is unable to provide her with another brand with similar healing effects.

ProSehat.com is an online marketplace that helps Annisa conveniently find and buy original drugs with ePrescriptions. ProSehat. com even enables her to subscribe for a recurrent refill subscription.

The online pharmacy marketplace automatically accepts ePrescription from doctors and provides Annisa with reliable drugs, at an optimal price and in a timely manner.

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Easy access to airtime 83% of Mexican phones are prepaid.

Many prepaid subscribers are often disconnected because of high prices and challenges they face in adding credit to their accounts. 73% of people over 15-years-old do not have a bank account, which prevents over 78 million people from having a more convenient subscription account.

Carlos 24 years old, engineering student Carlos is a 24-years-old, studying mechanical engineering in the University of Guadalajara, one of the top universities in Mexico. Having three other siblings, his parents have a very tight budget to finance his education. Carlos works part time as a waiter to be able to finance his life in Guadalajara.

He is saving money on every aspect of his life. Like most other students, he has a prepaid SIM card.

THE PAIN

THE SOLUTION

Carlos is allocating a ver y low budget to his prepaid account. As a result, he regularly ends up not being able to make calls and access his 3G connection because his airtime account runs out of credit.

He does not have enough money to afford buying phone credit on a weekly basis.

Pig.gi rewards prepaid wireless users with cellphone credit in exchange for targeted ads and conte nt . C ar los c an now g et airtime top-up rewards for having ads displayed on his smartphoneâ&#x20AC;&#x2122;s lockscreen. He can make calls anytime, for free.

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“If you want to build a ship, don’t drum up the people to gather wood, divide the work, and give orders.

Instead, teach them to yearn for the vast and endless sea.”

- Antoine de Saint-Exupéry

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“Access to Internet does not always mean you can afford it.

We are here to change that.”

“Hi, guys, can you hear me?”

“No, you are breaking up a bit.”

“Hello, hello?”

“Is the LATAM team joining?”

“No, they ran out of credit and there is no wifi in the bar where they are.” Every week when we have our weekly Seedstars World team calls, it goes something like this.

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“In LatAm, entrepreneurship is embedded in the way people think and act.”

In Switzerland, connectivity is something that we take for granted. But as soon as we leave the comforts of Europe and start trotting around the world, we realise that the ability to connect to internet without any difficulties is something that should be cherished.

As we described in the case study above, connectivity is a problem especially salient in emerging markets. We talked with our winners from Mexico, Joel and Isaac Phillips, about their product Pig.gi and how their experience with building a startup in Mexico compares to the United States.

SSW: Can you give us a bigger picture of the problem that you are solving?

IP: While in Western Europe and America connectivity is something that most people can easily access, in many developing markets less than 50% of the population is connected to the internet. We see it as a very tangible and big problem, the same as many other companies. However, while many of them focus on the infrastructure, we are looking more in-depth into the financial side of it.

IP: Also, access to Internet does not always mean you can afford it. There are millions and millions of people who have

THE RISING STARTUP ECOSYSTEMS

“We are working hard to be one of the success stories that inspire the next generations of entrepreneurs to come.”

Phillips brothers

reliable internet around them, but they simply do not have the resources it takes to buy it. Getting inspired by broadcasting media, we realised that Internet could be potentially sponsored by advertisers.

Obviously, it is more expensive than broadcast media, but we are also able to have much more targeted ads on mobile devices, than we can on TV or radio.

at core very entrepreneurial. On every corner you can find guys selling tortas and tacos, hustling to earn their living.

While this form of entrepreneurship is very informal, it stares you in the face wherever you go. It is embedded in the way people think and act.

SSW: Can you describe how your product solves this painpoint?

JP: While in Europe and the US things work well enough, in Latin America there are still some issues that need a solution.

Things that don’t work well, things that need to be made more efficient. I think this creates unlimited opportunities for entrepreneurs to make a huge difference.

JP: We are subsidising about 25 to 40% of the average monthly spend on mobile connectivity, by providing the users a sponsored content on a lock screen. Just think about it. How many times a day do you open your phone? In Mexico, it is 150 times! Everytime the user sees a piece of content, they automatically receive one pig.gi coin. This means that in course of a day, the users can easily get over 80 pig. gi coins, and already with 1,000 coins you can get 10 pesos of airtime.

SSW: You are originally from the United States. Why did you decide to start a company in Mexico?

IP: We have noticed that there is an incredible amount of talent in Latin America, and it is much cheaper than we would have paid in New York or Silicon Valley.

Mexico, and Latin America in general, are

SSW: What is the reason for this entrepreneurial spirit, in your opinion?

IP: Having been involved in the country for the last five years, we definitely see the ecosystem maturing. What is currently most needed is for the full c ycle to happen, with investors who have had an exit and with entrepreneurs who had built successful companies and sold them.

It is a slow process, but we are optimistic and believe that Mexico is the best place to be based right now.

We are working hard to be one of the success stories that people can point at and inspire the nex t generations of entrepreneurs to come.

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“Someone is sitting in the shade today because someone planted a tree a long time ago.”

— Warren Buffett

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From waste to furniture In Colombia, 13,000 tons of plastic waste is produced on a daily basis, only 5% of which is recycled. Per year, 580,000 tons of coffee shells are disposed. 25% of timber collected through deforestation is used for creating furniture.

Diego and Andres, 2 different lives, 1 purpose Andres, is a coffee farmer living in Fusagasuga, a town 2 hours away from Bogota, famous for its coffee farms.

He makes about $500-$1,000 a year for his coffee. Diego makes a living out of trash recycling at Barranquilla, the capital of Colombia’s Atlántico Department, a bustling seaport flanked by the Magdalena River. The city is known for its enormous Carnival, which brings together flamboyantly costumed performers, elaborate floats and cumbia music.

THE PAIN

THE SOLUTION

Andres struggles to get the minimum wage to take care of his family, and ends up having his 10-year-old child help him harvest coffee beans. Diego works with his wife and 4 children picking up trash on a daily basis. They can make up to 30$ a day altogether on the best days.

The star tup Diseclar has come with a new solution, which helps coffee farmers and trash recyclers increase their wages. It transforms plastic and agroindustrial waste into beautiful pieces of sustainable house furniture. They are water, insect, and UV resistant. Diseclar contributes to less pollution, less deforestation, and a better living for Andres’ and Diego’s families.

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Giving youth higher chances of success In Ecuador, 500,000 High School students every year must take the ENES test to access university. The minimum required score is 850/1000.

Still 60% of the test takers do not dispose of the right tools to succeed.

Cynthia 18 years old, and ambitious student Cynthia Lopez is student in final year of High School, she is working on her university applications, and truly wants to attend the best university in the country: Yachay.

In order to get accepted, she must pass the ENES test, the National Exam for Superior Education, and obtain her target score of 850 points.

THE PAIN

THE SOLUTION

In order to pass the ENES, she must subscribe to preparatory classes to prepare for the test. However, the preparatory school is too far from where she lives, the classes take place at inconvenient hours, and are too expensive for her parents. Not to mention the fact that the classes are full of students, which does not facilitate a personnal preparation.

Cuestionarix.com offers Cynthia ENE S o nl in e cl ass e s to e nte r university. She can study anywhere at anytime of the day. Cuestionarix offers customized online courses at a fair price thanks to its educational team. The startup guarantees an improvement of the ENES grade by 200 point compared to her initial level.

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The public push for the next Latino unicorn While Latin America seems to be separated from the rest of the world by two immense oceans, there is definitely something brewing there, hidden from sight.

And while it is difficult to find common trends and generalisations for the other continents, in Latin America, there is a general movement that keeps on popping out in every country that we visited: governmental support.

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â&#x20AC;&#x153;The sheer amount of informal economy that is happening on the streets of Latin America is a heaven for startups.â&#x20AC;?

We spoke with Lorena Edejer and Enrique Alvarado Hablutzel, our Regional Managers for Latin America, to understand how important government support is when developing startup ecosystems.

SSW: When you reflected back on the region, you mentioned a strong governmental involvement in the startup ecosystems. What are the main reasons for this?

LE: Governments are slowly realising that in order to progress faster, they need to digitalise the services and infrastructure.

There are many initiatives that are privatised, and the governments just do not have the bandwidth to cope with it. Who is in a better position to do so than the startups? They have the drive, they are on the ground and they have the know-how. The sheer amount of informal economy that is happening on the streets of Latin America is a heaven for startup opportunities, and the entrepreneurs go all the way to find more efficient ways of doing things. This is something that the governments can build on, and at the same time get more information and a better idea of what challenges their citizens are facing.

THE RISING STARTUP ECOSYSTEMS

“The startups filter through the noise and develop projects within context that, for us, is just unimaginable.”

Lorena Edejer and Enrique Alvarado Hablutzel, Regional Managers for Latin America

SSW: What does the governmental engagement look like?

EAH: Overall, the governments have the necessary financial resources and are eager to invest, but most of the time they are missing the know-how. Since Startup Chile got directly involved with the startup movement 4 years ago, they already have a good understanding of how things work, and have been able to adapt their model accordingly. Brazil, Colombia and Uruguay also do similar initiatives where they offer equity to startups in exchange for setting up business in their country and Peru and Mexico are launching their own versions this year. Luckily for them, they have the learnings of Startup Chile already, so it will take them less time to get to the point where Chile is currently.

SSW: You mentioned that Startup Chile had to adjust its model. What exactly does that mean?

LE: Based on their long term experience, Startup Chile noticed that even though they are doing well in accelerating worldclass startups, 70% of them tend to leave the country after the program is over and it doesn’t bring long term benefit to the local economy. Therefore, instead of investing all their resources into the acceleration phase, they diversified their channels and

opened several specific funds such as SCALE, which provides more suppor t for entrepreneurs who went through the programme and decided to stay in Chile as well as the S-Factory, a fund for minorities and female entrepreneurs in pre-acceleration phase.

SSW: What are the main problems the governments are facing when dealing with startups?

EAH: From what we observed, they are still having a hard time selecting good quality companies and can be very cautious when acting as investors and rightly so. A good solution which we’ve seen comes from Startup Brazil. They work hand in hand with accelerators and only fund startups that have been accepted in one.

SSW: How does the rest of the ecosystem react to this engagement from the public sphere?

LE: While governments are slowly making their way through the seed-stage level, the private accelerators, such as Wayra and NXTP Labs, are automatically moving into supporting more developed startups.

And while NXTP Labs remains engaged with the seed stage as well, they are verticalising their efforts to provide more targeted value such as in fintech.

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EAH: Regional collaborations are also slowly but surely starting, to capitalize on the fact that Latin America is a huge region where cultural and linguistic similarities can facilitate regional expansion. We launched Seedstars Connect in Mexico with INADEM to help top Mexican entrepreneurs launch in key markets in LATAM by traveling with them and providing them a soft landing in the country through our network and we saw a lot of interest from other countries to do the same.

SSW: What is the thing that surprised you the most about LatAM startups?

EAH: They can do magic without money.

The access to financing is still limited, they constantly need to look for the right connections, corruption is all over the place and you need tons of patience. But the startups filter through all the noise and develop their projects within context that, for us, is just unimaginable. If they can power through all of that and still create solutions that just make your head turn, there is no stopping them.

â&#x20AC;&#x153;LatAm is a huge region where cultural and linguistic similarities can facilitate regional expansion.â&#x20AC;?

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Often overlooked by larger investors, the region of Central and Eastern Europe (CEE) is waking up. Whether it is consumer electronics, wearables, robotics, or drones, they all have one thing in common. They are solid pieces of technology. With our Regional Manager for CEE, Igor Ovcharenko, we discussed the underlying reasons for this growing trend and the main challenges that these hardware startups are facing.

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IT’S TIME FOR CEE HARDWARE GEEKS

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“We have seen an unprecedented growth in the number of hardware startups that pitched at our events.

There were at least two or three products per country” says Igor.

High quality education can be considered as one of the major triggers of this trend.

“Central and Eastern Europe is very strong in engineering schools. What is now popularly called ‘unfair advantage’ can be traced back to the former Soviet Union’s engineering-based education system. The regime put a lot of emphasis on education.

Not surprising when you take into account that within Europe, the CEE is regarded as a region with the highest numbers of engineering talent and with the recent increase in support structures, the number of hardware startups keeps on growing.

Ukraine, for example, is the 4th most educated country in the world, and when you look at the list of the top 10 most literate countries in the world, 9 out of 10 have been a part of Soviet Union, at one point or another.

The s ys tem pl aced a lot of value on creation and support of scientific research centers, and we can see that Bulgaria, Ukraine and Russia are some of the most mature ecosystems we visited.”

Another thing that makes the region unique is the pure drive of the hardware community.“They have a passion for constructing things that is hard to match.

You can walk into any hackerspace, and you will meet all these kids creating amazing products just for fun, to make something ”cool”. Of course, not all of them have a firm understanding of how to monetize their ‘toys’, but that makes them all the more special.

Once the business side of things takes off, you get the most determined kind of entrepreneurs, because they are actually having fun working,” says Igor.

However, an aspiring hardware founder needs more than an access to high quality education and passion for creating things.

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And even though a number of CEEbased teams managed to raise hundreds of thousands of dollars through crowdfunding in the past year, it does not mean that the financial situation is all that rosy.

hardware accelerators. With Moscow’s industrial accelerator “Stal”, Estonia’s “Buildit” or Ukrainian’s “Carrot”, the amount of support for hardware enthusiasts gained new dimensions.

It is normal to expect that hardware star tups are having infinitely harder time raising funds than their software counterpar ts. “The costs rel ated to developing a hardware produc t are prohibitive. You need to create dozens of prototypes, you need to test them, and in order to get the return, you need to produce it in large quantities. And you did not even start accounting for the cost of distribution channels,” summarises Igor.

Not only do the startups get easier access to industry experts or reliable manufacturers in Hong Kong and Shenzhen, but they also receive solid business and design advice, along with recommendations about industrial design.

“For now, there is only a handful of investors actively involved in hardware.

Some back accelerators, and thus indirectly support the startups, and a few European investors have their offices in Russia. This is definitely a gap that still needs to be filled.” Manufacturing, understandably, is another issue.

“When we talk to the hardware startups, they never fail to mention this. Where do you manufacture your product and go to the market? Is China really the only solution for cheap manufacturing? And if you do end up going there, who can ensure that someone will not copy your product? At this point, all the patent issues come to play, and it is a small miracle the founders don’t just give up and run screaming,” explains Igor.

“After travelling the region for the past 6 months, it became clear that CEE is full of technology geniuses, who can write up a revolutionary code in three nights, but they encounter problems on how to sell it,” says Igor. “MENA is completely the opposite.

Eve n t h o u g h t h e i r te ch n o l o g i c a l background is not as strong, they will be able to sell you “your own arm”. If you could create a bridge between the two regions, the potential of this part of the world would be huge.” Disregarding all of these challenges, the number of hardware startups is on the rise.

One of the most active early stage accelerators in the CEE region, the Bulgarian “Eleven”, is currently investing into 4 hardware projects, bringing its total count of hardware startups to 20. “In CEE, people truly believe that innovation comes from pure technology solutions. And with the prices of technology constantly decreasing, there is not much else standing in their way.”

This continuous cycle of problems initiated a knee-jerk reaction and the region witnessed a growth of a whole new format: seedstars.com 115

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The dawn of digital Africa â&#x20AC;&#x153;Before I got there for the first time a couple of years ago, my expectations of Kenya were mostly giraffes and elephants.

I imagined Nairobi to be a pretty simple city, low key, with those sandy kind of buildings and streets covered with reddish dust. And when I got out of the airport for the first time three years ago, I was completely mindblown.

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The city is bustling with energy, there are people all over the place and the traffic is just insane. The cities are just so much bigger than you think. We tend to see the continent as one of the least developed ones, with an infrastructure that prevents any sort of technological progress. Once you get the chance to travel around you start realizing that despite apparent challenges that still exist, there is a huge innovation and entrepreneurship movement that is working on homegrown solutions to many of those challenges.

As Gregory Pepper, our Regional Manager for Africa, described, there is much more to the region than giraffes and elephants!

SSW: When you look back at your experience this year, how would you summarise the solutions the startups were offering?

GP: I would divide the solutions into two main trends. The first are addressing structural problems, such as the lack of infrastructure, health, education and agriculture. The second are linked to the recent growth of the middle class, as increasingly more and more people are earning higher wages. So while the first are addressing the more deeply rooted issues, in the second category we saw a lot of eve r yd ay p ain k il l e r s , su ch as e-commerce, deliver y ser vices, transportation solutions, or FinTech products.

SSW: We often hear about innovative usage of feature phones being the base of African innovation. What is your perspective?

GP: There definitely are a lot of solutions using simple mobile phones to transfer information, money or content. The famous case of M-Pesa from Kenya is brought up a lot, which allows payments and financial

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“You always need to take into account the end user.”

transfers with any available phone and has now been replicated by many telecommunication companies around the continent. But what we have also seen is that far more advanced technologies are used as well in a uniquely African context: from smartphone apps to navigate traffic, drones to deliver medicine, satellites to analyze and insure crops all the way to African designed hardware!

SSW: Could you give us an example?

GP: There were several cases where the entrepreneurs took technology that was available, built on the foundations and leveraged it to create a new, highly innovative product. One such example is Safe Motos, a startup from Rwanda, which was using the gyro axis system built in the smartphones to assess the way the mototaxi was driving.

By measuring driving data, such as the degree of incline when taking the corners and the speed at which the drivers were breaking, each driver was assigned a safety score. This way, anytime you used the app to hail a motorbike, you could select the safest driver based on his actual driving performance.

It is also fascinating to see how local entrepreneurs are designing products for local needs. You always need to take into account the end user. It makes no sense to create something fragile when the product is going to be used in a demanding environment. A good example of this would be BRCK and their Kio Kit, which allows teachers in rural areas to connect to the inter net via s atell ite and download educational content from the cloud, wherever they are. Since the product is targeted for classes full of children in rural areas, it is built to be very robust. You could practically throw it on the ground and drown it in the river afterwards, and it would still survive.

“Access to internet is exactly what you need to trigger the technological revolution.”

SSW: If you had to select one product that really stuck to your mind because of its technological complexity, which one would it be?

GP: Most probably Custos from South Africa, who is leveraging the blockchain technology to help media owners protect their content against piracy by incentivizing other users to detect the original infringer in return for a bitcoin bounty. Practically speaking, they are creating a mark on all digital content, especially movies, and anytime someone downloads it illegally, Custos can signal it back to the content owner and reward the bounty hunter. You can imagine it as a network of bounty hunters, who track who exactly downloaded digital content without authorisation.

SSW: Putting the startups aside, how would you describe the general state of technical development in Africa?

GP: Before I left for the tour, I had a hard time imagining how I would have good internet or even access e-mails quickly in some countries. But the truth is that every single place that we visited had at least 3G, if not 4G. Access to internet is exactly what you need to trigger the technological revolution, and it is already happening.

The most impressive thing about Africa is that there are huge, fundamental problems that need to be addressed, and many of them can be approached through entrepreneurship. Anywhere you go, you can feel people putting great energy into solving those issues, and instead of complaining about them, they treat them as opportunities. The talent is there and I believe that education and proper leadership will definitely have a huge role to play in the years to come.

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1. INTEROPERABILITY The interoperability of different apps is crucial. While in Europe and the US the way different apps interact with one another is very limited, services such as Tencent and WeChat have made easy integration and interoperability critical features in their product, giving the user a seamless, frictionless experience. For example, WeChat users can easily use their mobile

wallets to make payments for their purchases on the eCommerce platform of Tencent, the world’s third largest Internet company.

Such examples of platform crossovers are still missing in Europe and the US, since the service providers strnogly rely on their one area of expertise, hoping that it will give them the much needed competitive edge.

2. NETWORK EFFECTS The chat applications were smart and quick in realizing the potential for network effects by developing adjacent products for consumers. Once a user is retained through chat, then the company can provide services that make the user’s experience more valuable and ultimately revenue generating for the platform.

In Asia it is important to consider the user’s full spectrum of needs that could be served by technology to increase their lifetime value. It came as no real surprise when e-commerce giant Alibaba spun out a third party online payment, Alipay in 2004. Alibaba has been dealing with massive amounts of eCommerce transactions for

already 5 years, and going into payments was a natural next step. Continuing it is innovative journey, Alibaba demonstrates how far a clear holistic vision of product can take a startup.

Considering the fact that they have access to all their consumers’ data and buying preferences, Alibaba recently rolled out a platform to provide them access to loans and banking services. Their success was in recognizing its volume of data was a product in itself that it could monetize.

The potential of the volume of data that the group has at its disposal inspired something, that will make life of their users much more hassle-free.

3. UNIQUE POPULATION DYNAMICS One unique aspect of Asia is its sheer population and market size.

No other continent has two countries with population of over a billion people.

In addition to that, mostly due to the low manufacturing costs in China, Asia also comprises almost half of the world’s smartphone users, creating a sizable market opportunity for technology startups.

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which in turn makes it easier for the product to be quickly adopted across the whole country.

This stands in strong contrast to the United States and Europe, where the consumer tastes are considerably more varied and nuanced.

The relative homogeneity in certain markets is an advantage that makes it easy for startups to launch and understand the user base.

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WHY CHAT AND INTEGRATED SERVICES ARE MAKING IT BIG IN ASIA?

Asia is home to WeChat, LINE, Kakao, and Viber -- local applications that are proving to the world how chat applications are the future of mobile. In Asia these chat platforms give consumers access to dozens of critical services like peerto-peer and online payments, transportation, financial services, sparking a wave of new chatfirst application innovations and enabling customers without bank accounts or credit cards to participate in the digital economy.

Asia Regional Managers Karen Mok and Katarina Szulenyiova break down what we can learn from a trend that is defining Asia and the broader mobile tech world.

4. MOBILE LEAPFROGGING The onset of digital technology in China was recent and very rapid. Since Europe and the US were the original launchpads of technological revolutions, and it initially revolved around the possession of desktops, our buying behaviours are much slower to change.

The numbers themselves are quite telling; while Chinese mobile commerce is predicted to grow by 250% in 2016, Europe stands at 70% and the United States at barely 36% In Asia the trend is completely reversed.The prohibitive costs of desktops meant the majority of consumers entering the market turned to cheap mobile devices as their first means of getting online.

If mobile is the only thing that the users are familiar with, there is no virtually zero

friction to adopting mobile-first platforms and using services directly integrated in the messaging apps. To conclude, the overall market size for social commerce is expected to be USD30 billion within the next two years.

If we take just Indonesia as an example, with its population of 248 million and only 0.8% that is actually purchasing products on their mobile, the potential of this untapped market is enormous.

With this large of a market size and opportunity, it is clear that all eyes are on Asia. The question remains, if Western messaging apps have the ambition and capacity to pull the integrated services off the way WeChat, Kakao or LINE are doing right at this moment. seedstars.com 119

â&#x20AC;&#x153;An investment in knowledge pays the best interest.â&#x20AC;?

- Benjamin Franklin

3.

INVEST

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Message from Founding Partner Out of the 42 billion dollars invested in 2012, the U.S. was the world’s dominant center for venture capital, accounting for nearly 70% of total global venture capital, followed by Asia and Europe with roughly 14% each, according to a research from the Martin Prosperity Institute and Thomson Reuters database, which means that roughly 2% only were invested in the remaining emerging markets. As these regions tend to be quite opaque, it certainly doesn’t track the whole early and later stage activity, but the reality is for sure not far from these numbers.

The number of consumers are there, the middle cl ass is growing and the economies in general are expanding and also diversifying (especially commodities dependant countries). Money is available.

I nve s t o r s a re n ow m o re a n d m o re looking for ways to benefit from these growing macroeconomic opportunities, technology has never been so attractive and impact investment is on the agenda of most investors or wealth managers.

So what is missing to attract capital?

Quality deal flow: if average deals can be found easily, companies that have the right team, the right product and access to an “unfair advantage”, such as a distribution channel from a large corporate, a specific knowledge or the right network, are much more difficult to identify. This lack of deal flow comes

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“Investors are now more and more looking for ways to benefit from these growing macroeconomic opportunities.”

mainly from a lack of access to a education, which eventually has an impact on the quality of the entrepreneurs. They tend to be very good hustlers, but they are missing some of the basic tools to turn their ideas and motivation into successful high-grow th ventures. Seedst ars is visiting each ecosystem to meet with thousands of entrepreneurs every year in order to f ind the “raw diamonds” and setup education and acceleration programs to support them and give them access to an “unfair advantage”.

Exits: there are still ver y few exits, which is a vicious cycle. The less exits, the less investors are willing to make equity investments if they can’t get a return and the less investments, the less deals will be available. Local successful investors are usually the ones launching incubators and accelerators and giving back to the community. Strategic acquisitions or Private Equit y deals are still rare, but as the interest for these markets is growing, these kind of transactions should increase over the coming years.

Seedstars is bringing these opportunities to corporate investors searching for an exposure in these markets.

Pierre-Alain, Founding Partner

generations are however much more aware and are often the first business angels in these startup ecosystems. We are working closely with hundreds of local and international investors to support them in these investments.

Investment framework: risks such as foreign exchange, political instability, security, etc. are also factors that are slowing down some of the investment appetite, but this level of risk is in line with the potential returns expected for such investments. More and more governments are improving the business environment to attract foreign investments, but it remains one of their biggest challenges.

Seedstars is working closely with local investors to share insights on the local challenges and is also accompanying governments in improving these issues.

According to NESTA, 6% of the highgrowth companies create 50% of the jobs. At Seedstars, we believe that by focusing on these companies, we can have a huge impact on people’s lives in emerging markets. It is therefore our mission to do everything in our capacity to find, educate, support and finance these entrepreneurs

Investor education: local investors are still used to the traditional economy (commodities, real estate, trade, etc.) and might not grab the full opportunity of technology investments. The younger

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A closer look at a Seedstars’ investment - SimplePay, Nigera

It was l ate 2012 and Simeon Ononobi was getting ready to build his next startup. It was going to be the eBay of Africa. He had just sold his last company and he was investing the money he made in his next venture. But as soon he dug in, it became clear to him that his biggest obstacle was the lack of viable payments solutions on the market. At the time, less than 4 years ago, it cost merchants in Nigeria upwards of $3,000 124 seedstars.com

to be able to accept online card payments, and Paypal wasn’t even available in most of Africa. Simeon saw the opportunity. And like that, in January 2013, the idea of SimplePay was born.

By November, Simeon had launched the initial service in Nigeria.

SimplePay allows merchants to accept several payment methods at an affordable cost, and gives users a secure way to pay online without sharing their card details with anyone except SimplePay. Unlike other mobile payment

companies in Africa, Simeon didn’t want to focus on SMS or mobile money, and instead decided to follow t h e P ay p a l m o d e l , by moving money online and helping merchants receive and collect payments. His ambition is singular: Become the leading payment gateway of Nigeria, and then Africa.

Nigeria offers Simeon a great starting point. The country has a population of 174 million people, of which 62.4 million are online, which puts the country in 9th place worldwide.

Mobile connectivity is the biggest growth driver in Nigeria, but e-commerce has been lagging behind,

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small businesses and help them make the transition.

They need a cashless payment option. This is where SimplePay comes in.

with a Phillips Consulting report in 2014 showing the size of online e-commerce transactions to be only $2 million a week. This is precisely why SimplePay’s service is badly needed.

But even so, it was a rough ride for Simeon. It took a lot of perseverance to get his startup off the ground.

Simeon still remembers a time when SimplePay wasn’t making any money.

At one point, he had to sell all his property to pay his employees before letting them go. From there on, he continued alone with his wife, answering customers’ calls and continuing to work on the product. Remarkably, his customers didn’t notice any interr uption. But something drastic needed to happen. And then one day along came Seedstars Lagos, which Simeon won.

The winds of change were blowing.

S i m e o n we nt to t h e Seedstars Final next February. It was a tough jur y deliberation in the final round, but finally Flitto from South Korea was announced as the winner.

SimplePay got second place!

But almost miraculously for Simeon, Flitto had already c l o s e d a n i nve s t m e nt round in Silicon Valley just a few weeks before the Seedstars Final. This meant that they wouldn’t be needing Seedstars’s investment prize money. So in a dramatic turn of events, Seedstars awarded the prize to SimplePay. Simeon negotiated an investment deal of 300,000 Swiss Francs.

Since then, SimplePay has b e en growing and exp an ding it s p ro du c t range. It’s now building services not just targeting online e-commerce, but also moving into offline payments at the point of sale. There are 37 millions micro, small, and medium enterprises in Nigeria from which 10 to 15% are in the retail business. But while Nig e r ia’s Ce nt r al B ank envisions a cashless future for the economy, someone has yet to address these

Bit by bit, SimplePay is creating a whole ecosystem of payment services that allow their customers to use SimplePay in most of their day-to-day transactions.

The range of diverse services covers airline ticket booking, mobile credit recharge, and 171 other billing services from paying school fees for your child to booking a hotel accommodation. SimplePay wants to be your go-to service for every service out there.

L as t year, SimplePay received an undisclosed investment from Nigeria’s Bank of Industry, which is owned in part by the Central Bank of Nigeria. This marked the first tech investment for the bank, pointing to the growing importance of a national Payments solution to the Central Bank of Nigeria.

To d a y, S i m p l e P a y i s focused on growing in it s home mar ket to consolidate its lead in the face of competition. Yet its expansion plan across Africa has also been thought through and looms on the horizon. The final vision for the young founder is a day when SimplePay’s logo sits right beside the familiar Mastercard and Visa logos.

And he’s determined to help people change the way they pay online and offline. seedstars.com 125

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Fenox Venture Capital is a global venture capital firm, headquartered in Silicon Valley, that provides seed, venture, and growthstage funding to emerging technology companies globally. Major investment areas include Internet, mobile, social, cloud and emerging technologies areas. The firm is based in San Jose, California, and is led by Dr. Uzzaman, author of the book “Startup Bible – The Silicon Valley Way of Developing Success” and a former IBM executive who serves as the chief executive of the firm.

In Asia, Fenox focuses on early stage consumer companies. Recent investments include Jibo, the world’s first social robot, and Talenta, a Saas company that helps SMEs in Indonesia manage HR and payroll.

With a population of 260 million and double-digit growth in mobile Internet usage, Indonesia could very well be the next China or India. The Seedstars Asia team, Karen Mok and Katarina Szulenyiova, spoke with Aldi Adrian Hartanto, Investment Associate in Fenox’s Indonesia office, about the investment opportunity in the country.

SSW: Can you describe the current investment climate?

A AH: Recently we’re seeing a more favorable investment climate because the president has been very open to foreign investment and actions to improve the ease of doing business. In technology companies specifically, we saw a lot of activity for the past two years. When Tokopedia successfully raised $100M, it gave a lot of confidence that Indonesian businesses can turn into big, successful companies. We are also observing more people choosing technology startups as career paths over traditional industry and 126 seedstars.com

generally higher quality of startups. We are still seeing challenges in legal & regulatory measures but the government is actively developing a national ecommerce roadmap.

SSW: How common is co-investment and lead-on investment for tech startups?

AAH: There are still significant funding gaps in the region. Most investors are seed stage to pre-series A, with a fund size $5M - $20M, and average ticket size of $100K-$500K. In general, raising a seed investment nowadays is not that hard here. But things do get more challenging after the seed stage. Investors want to see traction but companies often lack the capital to get to traction that they need to raise series A. Compared to the US, co-investment is actually far more common, as usually one investor cannot take the whole round. In Southeast Asia, sharing investment is very common, because there are still only 5-6 big investors in region.

SSW: What are the three tips you’d give to foreign investors interested in Indonesia?

AAH: The top three would definitely be to: 1. Find local partner or team to execute the investment.

2. Have a strong underst anding of Indonesia’s legal environment.

3. Expect successful startups in the region to be very execution focused.

My key message would be, don’t miss out on Indonesia. A lot of investors in the region learned this hard way with China and India. In the emerging markets, it’s best to be early, and Indonesia is definitely a country to keep a close eye on.

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“If people aren’t laughing at your dreams, your dreams aren’t big enough.”

- Robin Sharma seedstars.com 127

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â&#x20AC;&#x153;AS LONG AS YOU DO YOUR HOMEWORK, THE OPPORTUNITIES ARE EXTRAORDINARY.â&#x20AC;?

Invested Development is a seed to early stage impact investment fund, with investments spread across Kenya, Nigeria, Uganda, Mexico, Tanzania, India and South Africa. We talked to Miguel Granier about his experience investing in emerging markets and what every investor should consider when moving to these exciting regions.

SSW: What motivates Invested Development when investing in emerging markets?

MG: We are focusing on emerging markets because we have seen the need in the market. There is a strong demand for innovative solutions for basic necessities like electricity, connectivity, education, access to markets, and water/sanitation.

Yet there is a lack of early stage risk capital to support the entrepreneurs fighting to meet the market. The angel investor presence is still weak and many investors are generally not willing to take technology risk in markets that present other hurdles.

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SSW: On which models are you predominantly focusing?

MG: Our main interest lies in areas where there has been a distinct market failure, and that have the potential to be disrupted because of recent regulatory changes and technology advancement.

If we look at the energy sector as an example, prior to significant cost reductions for solar energy and improvements in battery technology, electrification was dependent on very large centralised facilities and miles and miles of distribution. This is a very top down proposition, and centralised production is very expensive. There are few investors willing to risk the significant cost of grid electrification when issues such as l and rights, geology, thef t , and high maintenance costs collide with relatively low usage and revenue per household. That has resulted in significant underinvestment in the sector. All in all, you were looking at the system where the market was very conspired against universal electrification.

However, technology overcame many of the key hurdles. Couple the lower cost of solar panels and energy storage, with the massive innovation in pay-as-you-go financing, and you completely disrupt that market failure that existed for decades. We see these massive market opportunities as a double bottom line, which allows us to provide produc t s and ser vices with tremendous benefits and still ensure us competitive financial returns.

SSW: What are some of the recent developments you have seen when investing in emerging markets?

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“We have seen enough stability for the past few years to be very optimistic.”

MG: There has been a lot of growth in the support networks for entrepreneurs in emerging markets, such as Village Capital or Seedstars World. These programs are creating a lot of excitement in the regions and bringing in local angel investors, which is absolutely crucial. Many high-net-worth individuals and families still distrust keeping their money in local markets, it takes a lot of hype to make them come around and realise that they could do something great, fun and exciting, while still making a return on investment.

SSW: What would be the other motivating factor?

MG: Success stories. Once the investors have the proof that it can be done and there is liquidity in the market, it will reward the additional work they will have to put into it. For foreign investors, a strong local angel base is also critical. Nobody wants to be taken advantage of, and there is a large demand for co-investments, making the engagements less expensive. Everyone in the field is still learning, but it allows us all to be efficient about it, as opposed to hindering our ability to move forward.

SSW: How does the difference in cultures impact the way you work with startups?

MG: You have to adapt yourself to every specific market, because it is not realistic to anticipate that entrepreneurs are going to act like a Silicon Valley or European startup. When considering an investment you cannot only think of the market context, but also the cultural aspect. Of course, the culture should never become a crutch, and

you still have to maintain certain expectations and push for results. Massive expansion is possible anywhere, you just need to approach the culture a bit differently and not fight against it.

SSW: What would be your main advice for investors interested in emerging markets?

MG: The big thing is to break the mold of early technology investors. Don’t simply think of spreading your bets to 50 companies with little follow-on or time commitment.

And be prepared to go beyond equity. There are different sorts of capital that you can provide, such as leasing function or factoring for receivables. This approach has added more value to our portfolio than anything else by allowing us to extend the runway for companies while they build sales, increase their value, and de-risk their business model enough to attract follow-on capital.

Also, be very patient. It takes time to break down the lack of infrastructure, to change the habits, to build teams. You need to be ready to put a lot more emphasis on human capacity on every level, not just having great entrepreneurs, but also helping them to build teams that will continue to support them. Human resources is one of the most difficult hurdles companies face and you need to be prepared to get it right.

One last thing is, don’t be scared to do it.

These markets are very durable and robust.

We have seen enough stability for the past few years to be very optimistic, and as long as you do your homework, the opportunities are extraordinary.

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Will emerging markets be the new travel haven?

MARCO CORRADINO

FRANCESCO SIGNORETTI

We sat down with Marco Corradino, Chief Audience Architect, and Francesco Signoretti, CEO Travel, to discuss the newest development in the travel industry and what the emerging markets can bring to the table.

54 countries, over 1 million kilometres covered, at Seedstars World travelling is an inherent part of our everyday lives. Therefore we are especially proud to have partnered up with lastminute.com, to search for and invest in the best travel startups.

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SSW: If you had to describe the current state of the travel industry, what would it be?

Marco: For the past ten years, the situation in europe did not change much and it is still very similar to what we experienced in 2004, when we started. There was a clear domination of larger corporations and only recently we are seeing that also n ew, sm al l e r p l aye r s a re g ain in g in significance.

Also, the new technological trends, such as the widespread mobile adoption and the rise of social media, are changing the scenario. Something will happen in the near future and it is not sure that the key players in the next ten years are going to be the same players as we have now.

SSW: Why did you decide to turn your focus to emerging markets?

Francesco: The primary driver of growth today is definitely international expansion.

Our main market is Europe, but we have b e e n ve r y s u cce s s f u l i n e x p a n d i n g

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“The ability to execute efficiently is one of the first things that an investor looks for.”

“ We have always been keen about developing ideas and finding complementary business models.”

internationally with our platform, especially in the Nordic countries, Eastern Europe, South America and Southeast Asia. All are markets with a huge potential.

The other trend that is very clear is the unique experience that we can provide to our client. It is important to increase the added value. We are working on adding specialised ver tical niche services to address the overall travel experience (parking at the airport, lunch, security, etc.). The success is in the detail and our capability of finding the right ancillary services that will simplify the life, journey and experience of our users.

With regards to entering a new market, we have a cross-border approach in which we star t lean, leveraging our English language platform first, and once we see traction we go ahead and invest more time and resources to properly localise our services.

Marco: In addition to that, we have realised that talented people are spread everywhere around the world. That is why we want to go out, approach these people and enable them to act upon their ideas.

For us as a corporation it can be very difficult to kickstart operations in new countries without having these crucial links. This new adventure is a way to understand something new, and bridge the gap between market research and investment.

SSW: Where do you see the largest potential for growth?

Francesco: The biggest challenge and opportunity today is the huge traffic that is being generated by mobile devices. That is clearly something that is changing the way customers interact with our services.

Hence the change of focus from being device-centric to customer-centric. It is a must today to have the platform be 100% mobile-responsive to facilitate the whole booking process for the customer.

SSW: From a strategic investor perspective, what do you look for in a travel startup?

Francesco: We typically look at businesses that are complementary to our strategy, either from a geographical perspective or from a product perspective.

We star ted off as a flight-oriented company and we now have diversified our services, so flight actually only takes up 50% of our business.

This is mainly due to the fact that we are pursuing acquisitions that are complementary to our vision and our business model.

Then, in terms of characteristics, we look for an entrepreneur that is fully on board and committed to the project.

The ability to execute efficiently is one of the first things that an investor would look for, and we are not at all different.

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Is there enough money for African startups?

One of the major things I hear and read over and over again is the claim that there is not enough funding for startups in Africa and that we need more investors and capital on the continent.

While traveling with Seedstars World I meet startups across the continent and closely observed a dozen different ecosystems, I talked to many entrepreneurs and read a lot of local tech media.

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VC4Africa recorded over USD26 million invested in startups in 2014 and this year alone, we have seen companies like Paga raising USD13 million, Andela raising reportedly over USD10 million, Hotels.ng raising USD1.2 million, Safemotos in Rwanda raising USD131K, Totohealth in Kenya raising USD140k and so many more.

At the same time, new angel investors, angel networks and VC funds are popping up every week who want a slice of the African startup cake and are putting together millions to be part of the ecosystem.

I have no doubt that raising funds in Africa is not an easy feat, but with all these numbers itâ&#x20AC;&#x2122;s quite hard to believe that the amount of money available to startups is the real problem.

After talking to many entrepreneurs, investors and government officials across the continent I have come to believe that the problem much rather lies in the relative illiquidity of the available capital rather than in the amount itself.

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“Wealthy people still prefer to invest in traditional industries such as oil and gas or real estate.”

“Startup funding is already here, it is just unevenly distributed” In easier words: It is too complicated, risky and burdensome to invest capital in startups, which results in long due diligence processes, unhappy stakeholders and the impression that there is not enough money for entrepreneurs.

This ultimately creates two problems: Entrepreneurs are left with little to no investment and investors are stuck with funds they can’t spend. There are a few reasons for this: Both investors and entrepreneurs are relatively inexperienced in the fundraising process: Techinvestors and entrepreneurs have only been around for a few years, which means that both are relatively inexperienced in the fundraising process, especially when it is cross-border.

This means that there are no standardized legal frameworks, contracts, term sheets and agreements and everything needs to be drafted from scratch. Also, awareness of the different investment methods and their relative advantages and disadvantages are not well understood and applied.

Government regulations and tax laws still make it hard to invest. Foreign investors are insecure as to whether they can take the money out of the country after a liquidity

Marcello Schermer, SSW Africa Regional Manager

event and local investors face insecurities in terms of legal and tax frameworks.

There is a lack of competition among VCs and Angels. VCs and Angels are still relatively few compared to the number of entrepreneurs looking for funding.

This means that there is no f ierce competition among investors, which gives them more negotiating power while fundraising and in turn drags out the decision making process and puts downward pressure on valuation.

Other investment opportunities compete for investor’s money. Wealthy people still prefer to invest in traditional industries such as oil and gas or real estate. These are industries that provide mediocre, but stable returns which is why people chose those instead of more risky, but also potentially more rewarding opportunities such as startups and entrepreneurs.

There is no standardized due diligence process and term sheet. Every investor has a different due diligence process that requires startups to invest a lot of time and energy into providing different information to different investors to comply with their request. seedstars.com 133

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“The problem lies in the relative illiquidity of the available capital rather than in the amount itself.”

“We need to change the way investments are made and make the process easier, faster and more standardized.”

This means that a due diligence process can take anything from weeks to months.

Lastly, both entrepreneurs and investors have a longer track record and experience in fundraising and are therefore much more professional, using standard term sheets, contracts and legal structures that have shown to be best practice for a number of years.

Lastly, even when an investment offer is made, every investor uses different term sheets, making it hard for entrepreneurs to compare different offers and decide for what’s best for them From my experience, these are the main factors that make fundraising for African entrepreneurs incredibly time consuming and frustrating and create the impression that there is a lack of money on the continent.

But it doesn’t have to be that way: Silicon Valley investors fighting for deals. To see how it can be done differently, we can have a look at Silicon Valley. Fundraising in Silicon Valley is a highly competitive sport for VCs, who consistently fight over being part of the best deals in the valley. This competition reduces time from pitch to term sheet to about half a day and to money in the bank to maybe a week, making it incredibly easy for founders to access the available capital in an efficient way. In addition, the legal and tax framework for investments is relatively clear in the US, removing ambiguity and risk from the process and increasing willingness to invest.

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I am not saying that we don’t need more investor money for African startups but I bel ieve we need to change the way investments are made and make the process easier, faster and more standardized before we can even handle more money. Right now the bottleneck is not the amount of money, but the process with which it is invested. The best way to get there, is educating investors, governments, corporates and entrepreneurs.

Let’s fix this first before calling for more money we can’t even invest.

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“It always seems impossible until it’s done.”

- Nelson Mandela

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Co-opetition is the name of the game in Lebanon In the summer of 2013, the Central Bank of Lebanon introduced a policy through Circular 331, to de-risk equity investments Lebanese banks make in local technology startups. It would guarantee 75% of the investment value in case of a loss and share 50% of the profits in an exit.

And it was allowing banks to invest up to 3% of their entire capital in startups. This marks the first time banks in Lebanon have been able to participate in equity.

So far six funds were approved with a volume ranging between $30 to $75 million, and a ticket size range between $300,000 to $500,000 at the low end and $3 to $5 million at the high end.

Two funds are directly addressing the seed stage, which was previously absent.

To boost dealflow and ensure new startups come to market, the Central Bank is also fully funding a Bootcamp program, and several training centers and accelerators.

We talked to the organizer of the Bootcamp program in Lebanon, David Munir Nabti, who is also an angel investor in the space, about Circular 331 and the recent growth of the Lebanese ecosystem.

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SSW: First off all, David, what is Bootcamp?

DMN: It is a program that developed straight out of the Circular 331 directive to train entrepreneurs who are just getting started. The Bootcamp consists of two weeks of training, including the problem and concept validation, and from our side, team validation. Then they can either graduate directly into the next phase or take up to two months of continued iteration and validation until they are ready to move to the next phase.

The second phase focuses on analytics, landing pages, prototyping, business model development, financial models and pitch development. In return, weâ&#x20AC;&#x2122;re mandated by the Central Bank to take up to 5% equity from the startups.

SSW: How many startups are you aiming to graduate through Bootcamp this year?

DMN: For 2016, our goal is to graduate at least 100 startups through the first phase, and then have at least 15 to 20 high quality startups to come out of the second phase, ready to be picked up by accelerators and other investors up the chain. We would like to get Bootcamp to a point where we can also take it to regional hubs, and attract Lebanese expats, giving them the option to go through the Bootcamp and only come back to Lebanon if they get funding for their startup.

SSW: Two years on, how do you assess the impact of Circular 331 on the Lebanese ecosystem?

DMN: The Circular helped to accelerate the momentum of growth. The biggest business benefits, such as access to finance, have rapidly improved, and this trend will continue as new funds launch. All the different support structures, starting from Bootcamp and online accelerators, to the Kafalat loan guarantee program, VCs, and the universities, are creating a forward momentum. Ultimately, we hope this will trickle down to the government ministries and they will start feeling the

THE RISING STARTUP ECOSYSTEMS

pressure to address the infrastructure issues that only be addressed by them.

SSW: Apart from the Central Bank of Lebanon, do you see the banks already playing an active role in the startup ecosystem?

DMN: Yes, and we will soon see an increase in competition around funding startups.

The banks can get involved with the startups in two ways; either they invest in them directly, or they allocate the money for the VC funds, which then in turn use it to invest in startups. As we get more quality startups coming on board, we’ll see more and more funding options available. And this will filter down to which investors can offer the best terms to the startups, not just for funding, but also who can offer smart money.

SSW: Who do you think holds more power in the ecosystem right now? Investors or entrepreneurs?

DMN: Definitely the investors for now.

But as the startup community becomes more savvy, the power dynamic will likely shif t to the st ar tups. The bank s are constrained slightly more than startups, because Circular 331 requires them to invest in startups based in Lebanon. However, if startups don’t get the terms they want, they can still go abroad.

We’ve already seen many startups move abroad in search of better investment and growth opportunities. Ideally, we will see less of that, and more startups staying here because with the coming years, they will be able to get better deals, smart money, great support from the ecosystem, people to hire and work with, and the opportunity to stay closer to their families.

When you look deeper into something like universities, every educational institution should have a hackathon or some equally in-depth experience at least once a month to involve its students and faculty members.

On the bright side, we’ve already had a couple of sizeable exits, with a few more on the way this year. The entrepreneurs that come out of that do stay on in the ecosystem and invest as angels or VCs and build on their success to help others. And that leads to having more smart money in the ecosystem.

SSW: Finally, are you optimistic about the quality of startups coming out of Lebanon?

DMN: We are starting to see a trickle of brain gain and it is a reason to be optimistic.

It is still smaller than the brain drain that continues to bleed talent from the country, but we are seeing more expat entrepreneurs looking to base at least part of their operations here, or return completely. This is an exciting indicator of a reverse trend and we aim to do even more outreach events to Lebanese communities to continue it.

Our diaspora has built up substantial experience, good financial means, and influentials network, and it would be a great benefit to the country if we could engage them in a meaningful manner. As Mark Zuckerberg says, “Train your people so they can go anywhere; treat them such that they don’t want to go anywhere.”

SSW: At which stage would you say the startup ecosystem is in Lebanon right now?

DMN: The ecosystem as a whole is still at the seed stage. We need to have more accelerators, more investor networks supporting startups at different stages, technical labs, and research universities.

David Munir Nabti Organizer of the Bootcamp Program

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We want to thank every one of our global, regional, and local partners You empower us to connect the worldâ&#x20AC;&#x2122;s startup ecosystems. Special thanks to the amazing team at lastminute.com group, Marco, Fabio, Francesco, Priscilla, Pier and Niccolo.

Thank you to Inmarsat and Yasrine for believing in us, and to the visionary Jose Achache at AP-Swiss for your enthusiasm and drive. Thank you to Raphael and Yvan at SPECo, to CVCI, Ville & Region Lausanne, and to EPFL and Adrienne Corboud Fumagalli from VPIV that are hosting the Seedstars Summit.

Weâ&#x20AC;&#x2122;re also grateful for all the help and support from Swiss Embassies and Chambers of Commerce around the world.

A n d we c a n n ot fo rg e t t h e g re at connectors at Swissnex, Pascal in China, Balz in India, and Gioia in Brazil. Sven at Endeavour Vision, Abir at Lift, and Laurent Haug, thank you for believing in us from the start. Thank you to President Enrique Jacob, Adriana and Jose at INADEM as well as Julian Balderas from SoftLayer Catalyst for the immense support in Latin America.

Thank you to Linda, Jayshree and Adrian at Standard Bank. And thank you to Soraya at OCP Foundation, and to Kenza and Saad from StartupYourLife, for making Seedstars Africa possible.

A b i g t h a n k yo u g o e s t o a l l o u r ambassadors, namely Majd Afaghani, Minhaz Anwar, Elie Akhrass, Abdelmalek Al-Jaber, Steven Arthur, Dragan Antonic, Imran Baghirov, Farah Baki, Chamms-Eddine Bezzitouni, Faisal Al Bitar, Emmanuelle Bouiti, Alejandro Gomez Cano, Tai-Ku Chen, Tiago Borges Coelho, Tomas Costanzo, Michael Demidov, Valentin Dombrovsky, Raul Galera, Gustavo Gonzalez, Kamal 138 seedstars.com

Hassan, Jorge Jaime, Saad Jenane, Alireza Jozi, Pouya Kondori, Alena Kalibaba, Yansen Kamto, Hanan Khaldi, Julia Koh, Meshareth Kuhlmann, Kenza Lahlou, Markos Lemma, Artie Lopez, Marcela Zetina Manrique, Rites Massamba, Walter Mendez, Nathan Millard, Brian Paul Mnyampi, Alonso Mujica, Khurram Mujtaba, Victor Kelechi Ofoegbu, Douglas Ogeto, Olumide Olayinka, Vanda De Oliveria, Solomon Opio , Carolina Palma, Daniela Peralvo, Dat Quoc Pham, Vuyisa Qabaka, Diego Jose Ramos, Abdelhameed Sharara, Asiya Shakirova, Vivek Srinivasan, Fidan Tofidi, Fabricio Tozzi and Artashes Vardanyan. They all worked day and night with us to help us deliver the best possible events.

The Africa team would like to thank A p p s Af r i c a , Ay i b a M a g a z i n e , C N B C Africa, Disrupt Africa, IBM, Meltwater Entrepreneurial School of Technology, Nest.vc, OCP Entrepreneurship Network, OPTIC, Orange, PayFast, Reach for Change, Silicon Cape, Standard Bank Group, TANZICT,

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TechCabal, Techmoran, Techpoint.ng, Unitel, Ventureburn and 22seven.

The Asia team would like to thank Asan Nanum Foundation, BASIS, BBVA, BD Venture Limited, Chinaccelerator, Deloitte Sydney, Fenox Ventures, Hotel Quickly, Impact Hub Manila, International Trade Center, Kibar, MaGIC, NewsCred, Stripe, Taiwan National Development Council and Taiwan Startup Stadium.

The CEE & MENA team would like to thank AFRICINVEST, Arabreneur, Avatech, Avito, Azercell, BEEBUZZAD’, Capital Maroc, Chasopys, DabaDoc, EBAN, e-front, Iranian Entrepreneurship Association, GIZ, HSE, Netbarg, Oasis500, Paltel Group, Pasha Bank, Regus, RiseUp Summit, Silicon DrinkAbout, StartUpYour Life, Svyaznoy.

Travel, Techrasa, Turn8, UK Lebanon Tech Hub, Wamda, Webrazzi and Workinton.

The LatAm team would like to thank ANDI del Futuro, Banco Ciudad, Campus Party Quito, Celina, Comunicación Corporativa, Cowork, Cubo, CUTI, El Obser vador, Emprende, ESAN University, Fundacion Trabajo Empresa, Incubadora Sinergia, Instituto Nacional del Emprendedor, Juventud Empresa, Kruger L abs, L a Republica, Periodista Virtual, Rafaniello, Ronin PR, Softtek, Sony Music, StarterDaily, Startup Mexico, Universidad Interamericana de Panama, Universidad Veritas, UTEPSA University, Ventures, Vrainz Accelerator, Wayra Chile and 100 Open Startups.

Last, but not least, we would like to thank all the global companies and organisations that assisted us across the world, among

others Barclays, Global Entrepreneurship Week, Google for Entrepreneurs, Google Developers Launchpad, IBM, Impact Hub, Microsoft and Uber.

None of our 54 winners would have been here without your help and advice, and we are proud to have been able to bring the best of the best. We also want to thank our alumni for coming out to supporting our events and share their experiences with this year’s entrepreneurs.

To all the entrepreneurs who joined us at Seedstars World, we say: We’re proud of your perseverance. Thank you for joining us on this journey! You prove to the world that startups have no borders and that talent is truly everywhere.

Special thanks to Rico and Raphael at the School of Management of Fribourg and Alexandre at Presence Suisse. Their support made this book possible. And their great faith in Swiss startups makes us all the more proud to be an idea born in Switzerland. In 2015 we added 20 new countries to our world tour and met over 1200 startups.

We have even more ambitious plans for 2016. The Seedstars family will continue growing. We will invest in strategic markets all over the world to be closer than ever to entrepreneurs, because you can’t replace face to face. We will go on connecting the world’s emerging ecosystems. And we will bring on more investment and expertise to help startups scale their solutions in emerging markets.

There’s talent everywhere. Let’s find it together. seedstars.com 139

Edited in Switzerland 2016

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THE RISING STARTUP ECOSYSTEMS IMPACTING PEOPLE'S LIVES THROUGH TECHNOLOGY & ENTREPRENEURSHIP