By Chris Solomon for Global Risk Insights
In the midst of the Arab Winter, there is a remarkable story unfolding in the Middle East’s tech sector. Plagued with bloated public sectors, infrastructure challenges, and bureaucratic inefficacy, the region has struggled to foster innovation and entrepreneurship. However, recent years have seen a promising trend unfold among highly educated young adults (60 percent of the region’s population).
Digital connectivity also allows women from conservative families to exchange ideas and cooperate on an international level from home. The embracing of social media by youth during uprisings has also fostered new developments. The entire region is relying on mobile technology more than ever. Here are ten startups to watch in 2015.
1. Genesis International (Muscat, Oman): It is notoriously difficult to start a thriving business in Oman. The apprehension surrounding the political succession is also a problem. However, Qais Al Khonji, one of Oman’s most famous entrepreneurs, is supervising the growth of this multi-sector startup in the Sultanate. Ranging from energy to education, this business is growing and plans to expand further into the region.
2. GetYou (Tel Aviv, Israel): Created by Dr. Orit Mossinson, this app aims to knock down the pervasive cultural and social stereotypes that are present in the region. While primarily still an educational tool, the plan is to grow into a social network akin to Facebook or LinkedIn. So far the app has 550,000 profiles registered (including users in Syria, Iraq, Lebanon and Iran) and continues to grow. GetYou took part in an international competition hosted by the German media network SevenVentures and has received an estimated $1.1 million in seed funding. GetYou may be able to end Israel’s dismal track record of startups.
3. Digikala (Tehran, Iran): This city is rapidly expanding into the tech sector. Accelerators such as MAPS, AvaTech and DMOND Group are fostering budding entrepreneurism. Iran has a notable void waiting to be filled in the world of e-commerce. Online retailer Digikala, however, remains in the lead with the largest earnings at $150 million and continues to grow at a staggering 200 percent annually. The company is also preparing to expand into Iraq, Afghanistan and Turkmenistan.
4. ElWafeyat.com (Cairo, Egypt): An Arabic language social media site for memorializing deceased friends and family, ElWafeyat recognizes the potential for expanding throughout the region. It was recently the recipient of a $100,000 investment from 500Startups.
5. Apstrata (Beirut, Lebanon): Last March, Lebanon’s Central Bank Proposal 331 allocated $400 million for local startups. Lebanon’s venture capital firms have been stepping up to the plate in a big way. Apstrata is the sister company of element^n. Rabih Nassar founded the back-end-as-service provider to provide developers the application programming interface (API) needed to jump start their own designs. Working as a part of the Telcom 2.0 Initiative, Apstrata is exploring new business models for Lebanese telecoms and presented at the Telcom 2.0 “OnFuture EMEA” conference in London last June.
6. Project X (Amman, Jordan): Project X was the winner of startup incubator 1776’s Challenge Cup. With civil war raging in neighboring Syria, Sami Yabroudi and Ahmad Sadeddin were inspired to design a mobile application that allows for 3D printing of prosthetics. With an initial investment of $116,000, they are now working with international NGOs to take the technology to other war zones such as Afghanistan.
7. Saphon Energy (Tunis, Tunisia): In the wake of Beji Caid Essebsi‘s victory, it is uncertain if the new governing Nidaa Tounes party will be able to revitalize opportunities in the country’s tech sector. There is a widespread perception that its members come in large part from the old guard known as “Remnants.” One company, however, stands out on the tech scene. Devoted to researching and developing wind energy, this startup just partnered with Microsoft. A regional leader in clean-tech, Saphon created the zero-blade wind converter which also works as a water pump and provides internet connectivity. It is currently working on Maraya, its next project used for monitoring and analyzing data.
8. Wasselni (Gaza Strip, Palestine): Channeling Uber, Mariam Abultewi, with the help of the local seed accelerator, Gaza Sky Geeks, founded this taxi cab app service in the Gaza Strip. Palestinians are rapidly creating a name for themselves in the tech world. Tahboub, a company based in the West Bank, called Gaza’s programmers some of the “most talented in the region.” This startup, despite struggling against significant odds, now serves 2,000 customers and has 70 registered drivers.
9. Dokkan Afkar (Jeddah, Saudi Arabia): The startup scene in Jeddah is promising but still struggles to overcome problems in terms of attracting investment. Ammar Waganah, CEO of Dokkan Afkar, explained that the company is primarily focused on merchandise suited for inventive professionals. Dokkan Afkar is aware that there is a growing demand for e-commerce. A recent study conducted by Strategy & Consulting (formerly Booz & Company) and twofour54, the Abu Dhabi Media Zone Authority, found that the region’s online market was on track for earnings nearing $4.4 billion by 2022.
10. Miswag.net/Fikra Space (Baghdad, Iraq): The Iraqi government’s bureaucratic control of the IT sector keeps prices high and most Iraqis offline. Miswag.net, founded by Ammar Ameen, who also worked to develop Easy Bites in Northern Iraq, was designed to serve as an alternative resource for Iraqi merchants to sell products. Although Miswag paused the business last summer, the startup shows great promise. Fikra Space is acting as a community hub for Iraqis to connect with each other and encourage the country’s young people.
Aside from the political and social issues, the biggest challenge for MENA startups is funding. In the Arab Gulf countries, an estimated 70 percent of startups are self-financed. Despite this, the region’s techies are continuing to demonstrate ingenuity, perseverance and flexibility and are rapidly taking their place in the globalized world.