The other Arab Spring – the hunt for new internet and mobile companies
It reports on how private-equity are investing in high-growth companies as they help incubate new internet and mobile companies across the Middle East from Cairo and Beirut to Dubai and Jordan.
Although in the same way that people have struggled to change regimes start-ups face problems of their own from bankruptcy being a criminal offence in several countries to miles of red tape elsewhere.
The excitement in the colourful offices of Seeqnce, a business incubator in Beirut, is palpable. In one room disembodied entrepreneurs pitch their ideas over Skype to a three-judge panel. In another Fadi Bizri, one of Seeqnce’s founders, scrawls business plans on a wipeable desk. So far Mr Bizri and his colleagues have considered 433 applications in their hunt for eight winning teams that will spend six months in the incubator creating internet and mobile companies.
Seeqnce is part of another Arab spring. Incubators are trying to do for Cairo (Flat6Labs) and Jordan (Oasis500) what Seeqnce is doing for Beirut. Private-equity firms such as Abraaj Capital and Citadel Capital are investing in high-growth companies. ArabNet helps techies to network. New ventures are popping up everywhere. Cinemoz, in Beirut, allows access to the Arab world’s biggest online library of films and soap operas. Diwanee, in Dubai, provides online articles in Arabic for women. Ekshef links patients with doctors in Egypt. Linda Rottenberg of Endeavor, a networking group for entrepreneurs, says the Arab world resembles Latin America a few years ago when it comes to start-ups.
How likely is it that these green shoots will flower? It is easy to be downbeat. Arab companies tend to come in two types—lumbering giants (which depend on state patronage) and rickety dwarfs (which lack the capital and talent they need to survive). The region manufactures only half as much per head as others at a comparable stage of development. However, it employs twice as many bureaucrats per head as the global average, the Economist writes.
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