‘Stars aligned’ for Palestinian startups, say Gulf investors

About 20 Palestinian startups traveled to Dubai this week for the fourth edition of the International Conference on Entrepreneurship in Palestine (ICEP), to present their business ideas to investors.

ICEP participant Christina Ganim is co-founder of Kenz, an e-commerce platform selling intimate apparel for women in the Gulf. “We are currently in the process of raising a $1.5 million investment to expand and dominate our current markets,” said Ganim, who closed 15% of his company’s pre-Series A round.

Saudi Arabia is her main target due to its high purchasing power, established payment gateways, logistics and supply chains, the Ramallah-based businesswoman said.

One of the reasons is that “PayPal doesn’t work in Palestine. They don’t recognize Palestine as a country. …So how is our company even supposed to set up and operate when the biggest payment gateway don’t actually work? Or allow them to operate in a legitimate way, like every other startup in the world?’ she told Al-Monitor.

“Having a startup is kind of overcoming the bureaucracy of the [Israeli] occupation,” she added. “So we avoid it.”

Its method has proven itself, with Kenz being the only Palestinian company to raise funds from 249 startups in the Middle East and North Africa (MENA) in the first half of 2021, which totaled a record $1 billion, according Wamda.

Ganim said six investors at the event from the United Arab Emirates, Palestine and Saudi Arabia had scheduled meetings with her.

Expansion Seeds

In 2022, startups in the MENA region raised $2.2 billion in the first eight months, a 29% increase from the $1.7 billion recorded in the same period last year, a reported Wamda.

The United Arab Emirates racked up the most funding with $233 million, followed by Saudi Arabia with $103 million and Egypt with $38 million.

As the world becomes increasingly dependent on online payment systems and conducting business in environments such as the Metaverse, palestinian startups find new ways to invest and more.

“The beauty of digital technology, technology-driven companiesit’s that…they don’t see borders,” said Hashim Shawa, president of the Bank of Palestine and co-chair of the ICEP.

“It’s a good time to be a palestinian entrepreneur and a startup. You have all the stars aligned, or the success factors, where the ecosystem is ready and built,” said Shawa, who also said there was a lot of interest in venture capital from the public. of ICEP and indications of regional collaboration during the event, which was organized for the first time in Dubai.

“We have just signed with the [Dubai International Finance Center] a cooperation agreement between the [Bank of Palestine] and our innovation center,” he told Al-Monitor, citing four centers in the West Bank and Gaza.

More than 300 startups have been created in the West Bank and Gaza since 2010 according to ICEPwith much of it only recently and 35% of the ecosystem being developed between 2020 and 2021.

The predominant fields are e-commerce (22.8%), education technology (13.9%), health technology (11.9%) and fintech (10.9%).

Average 19 additional startups were created in the West Bank and Gaza each year from 2009 to 2018, according to a World Bank report.

Talented and highly skilled founders were seen as major assets in the Palestinian ecosystem, while limited management experience and insight were barriers, according to the 2018 report. , foreign investment was seen as the most influential factor for their long-term success.

Conscious investments

“There’s huge profit potential,” said Habib Hazzan, co-founder and managing partner of Ibtikar Fund, which has funded 29 startups.

“There is a lot of talent in Palestine; it’s affordable and very accessible,” said Hazzan, who helped raise $10.5 million in 2016 when the fund was created and $30 million in 2022 pending closing.

He said there are two things that Palestinian startups need to thrive: access to finance and access in general.

“Because you have movement restrictions, sometimes [there are] restrictions imposed on foreign experts coming to Palestine. So we have to make up for that,” he added.

One of the success stories of the Ibtikar Fund is Tawazon, the first Mindfulness and meditation app in Arabic language, which uses cognitive processing therapy to help reduce stress and anxiety. Founded in 2019, it has made a name for itself in the App Store and Google Play, reaching consumers around the world. “Today we have 250,000 Tawazon users; 20,000 of them are active monthly users,” said Suna Zoabi, founder and CEO of the mental health app.

She says Ibtikar is the only fund startups have access to in Palestine, and while that is starting to change, they need direct access to Middle Eastern, European or American funds to really grow.

Zoabi said that in addition to the Ibtikar Fund, she also found a Kuwaiti investor for her pre-Series A fundraising and hoped to find more in the Greater Middle East.

“We are looking for someone who can open doors in the GCC to the specific Saudi market,” she said, adding that events such as ICEP bring her closer to the 70% of her clients who come from countries around the world. Gulf.

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