Lebanon a gateway to start-ups’ success
Samer Karam is the founder of Lebanon’s first accelerator Seeqnce, whose first companies graduated in 2012.
He is also the founder of Startup Megaphone, a company which has been asked by the central bank of Lebanon to manage the image of the tiny Middle Eastern country’s start-up ecosystem.
Next month Mr Karam will travel to London, a city he is very familiar with, to participate in the latest Pitch@Palace. This is a programme founded by Prince Andrew to support entrepreneurs and help them to connect with angel investors, mentors and business partners.
Pitch@Palace 4.0 will focus on the Internet of Things and Smart Cities, with a specific emphasis on products and services that are helping to create a smarter world and empower consumers and citizens.
It is perfect for Mr Karam, who has been promoting Lebanon and its nascent start-up scene around the world in recent years, visiting South East Asia and Madrid in the past few months.
Mr Karam attracted the central bank’s attention when he was running Seeqnce. It liked the look of the companies he seed-funded and began a progressive policy to support entrepreneurship in Lebanon, called the Circular 331.
This policy forced Lebanese banks to invest up to 3 per cent of their deposits into Lebanon-incorporated, technology start-ups – creating a US$500 million sovereign wealth fund to be invested in start-ups over the next five years.
Mr Karam says start-ups in Lebanon cover a wide range.
“Quite a few of the ideas we are seeing are agritech and cleantech. People are trying to develop solutions to the problems that we face as a country,” he says.
What advantages does Lebanon have that can help it to rival Berlin or London, let alone Silicon Valley? “We want to leverage the things that we are already strong in,” Mr Karam says.
“We have excellent universities, strong engineering schools and a focus on design and creative talent.”
Beirut is also a gateway to the Arab world and Africa, while also being a bridge to the western world, with strong links in France and London.
“This is a multicultural community and it is also where the Arabian Gulf countries come to play and relax,” he says, suggesting that Lebanon could be an ideal launch pad for Arab tech companies that want to access global capital and investors.
Back in London, Hussein Kanji, a founding partner at Hoxton Ventures, an early-stage European venture capital firm, says he has been talking to his Middle East contacts for many years.
“We typically write the first $500,000 to $2 million cheque to a start-up,” he says.
One of his big successes is Deliveroo, a restaurant delivery platform about to open in Dubai.
Mr Kanji says that while there is growing activity in the Middle East one issue is the conservative nature of the investor base.
“They aren’t as used to alternative asset investments and if they are it usually stops at hedge funds and private equity,” he says.
“The older generation, which makes all the decisions still, don’t innately understand the tech companies and if they do invest in them they are likely to do it through the public markets,” Mr Kanji adds.
“The generation that is in their 30s do understand tech, so things will change.”
Many of the younger generation were also educated in the US Ivy League schools and under their influence offerings such as Wamda, an enabling platform for entrepreneurs in the Mena region, are taking off.
Mr Kanji agrees that the Middle East could become not only a great place from which to raise investment in tech but also to find future tech stars.
“If we had a reasonable-sized cheque book, I’d happily invest there,” he says.
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