Internet and Mobile Trends in the Middle East  

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It’s no secret that Internet penetration has increased dramatically in the Middle East in recent years. More and more people are coming online and it helps explain the growth of tech entrepreneurship in the region. But what are the trends and patterns in Internet and mobile usage in the region? What do they mean now and how will they shape the future?

How do we answer those questions? Data. At WOMENA we love data and think it’s a very useful tool to measure a lot of different things so when we came across the excellent “The Arab World Online 2014: Trends in Internet and Mobile Usage in the Arab Region” report from The Mohammed bin Rashid School of Government we were intrigued. It’s a great read and we highly recommend it. The report is over a year old now but we still think the report is relevant to understanding the trends and patterns in 2016.

The statistics are likely to have changed somewhat with more users but they still show the magnitude of the opportunity for startups and investors in the Middle East. Here though are some key facts and findings from the report:

  • There are more than 135 million individuals using the Internet in 22 Arab countries (about 36% of the population)
  • Total users has been growing 20% annually
  • The mobile penetration rate is 110%
  • There are 71 million active social media users

So what do these statistics mean for the Middle East? It points to the massive opportunities available in the Middle East for startups and investors alike. There’s clearly a market for companies to emerge meeting the needs of these Internet users. It will take time for the market to mature but it’s an exciting time to be involved. We expect to see continued growth in 2016 with more startups and success stories emerging across the region from Morocco to the UAE. Watch this space!

Updated Investment Process  

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We’re always refining our processes to best serve our members, partners and entrepreneurs and that extends to our investment process. We’ve previously discussed that on our blog here but check out our updated investment process below.

Application Cycle

WOMENA has one pitch meeting every other month. Applications to pitch are open and ongoing.

Process

Initial Application: In order to be considered for an investment, interested entrepreneurs must fill out an application form here.

Initial Review: WOMENA staff will review the company’s application and supporting documents. If we believe that the company is a good fit, the entrepreneur will be contacted by the WOMENA team via email to set up an initial screening.

Initial Screening: During the initial screening, a conversation will be had between the entrepreneur and the WOMENA team to further discuss the company and the business plan, including the current status and future plans of the company. If there is continued interest after this meeting, the company will be scheduled to pitch at a WOMENA pitch meeting.

Pitch Preparation: Once the company has been approved to pitch, the entrepreneur will be asked to prepare materials for the pitch according to WOMENA templates. Upon submission of materials, a WOMENA team member will review them and schedule a call to offer edits and presentation coaching. WOMENA members will be provided with an overview of each company scheduled to present at the dinner.

Initial Due Diligence: During the pitch preparation stage, the company will also submit materials and answer questions for initial due diligence. Various aspects of the business will be assessed including market size/opportunity, competition, competitive advantage, financial projections and team members. It is crucial that entrepreneurs are in contact with the WOMENA team at this point to answer any questions in order to move the process along quickly.

Pitch Meeting: At the pitch meeting, the entrepreneur has 8 minutes to pitch to our entire membership, followed by 10 minutes of questions and answers. At the conclusion of the pitch, members will have the chance to privately discuss the company with other members and initial due diligence findings will be shared. Investors will then be asked to indicate their interest in the company on a survey. Those who indicate interest will receive a follow up call from WOMENA to confirm their continued interest. Three interested investors are required in order for WOMENA to follow up with the company.

Follow-Up: No more than two weeks after the pitch, WOMENA will schedule a conference call with the WOMENA team, interested investors and the entrepreneur. On this call, investors will have the chance to further discuss with the entrepreneur and to notify the WOMENA team of any additional due diligence questions they would like answered in the report. At the conclusion of this call, if there is at least one investor still interested in the company, WOMENA will produce a due diligence report.

Further Due Diligence and Commitments: At this stage, the WOMENA team will continued in depth due diligence on the company. Investors will then be provided with a complete due diligence report for their review. Upon review of the document, interested investors will make a hard commitment to invest in the company. The valuation and proposed terms will then be negotiated.

Funding and Monitoring: Once investors have committed and all parties are satisfied with the terms of the investment, investors will transfer their investment to WOMENA SPC, the entity that will then invest in the company. A copy of the agreement will be given to investors for their records. It is expected that entrepreneurs will continue contact with WOMENA via regular reporting and updates. WOMENA and investors in the company will also be available to access for their network and related resources.

The Multiplier Effect from Maktoob’s Acquisition  

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Maktoob was the Middle East’s first big entrepreneur success story. After Samih Toukan and Hussam Khoury grinded away to make the company a success (read Christopher Schroeder’s excellent book – Startup Rising: The Entrepreneurial Revolution Remaking the Middle East – for a full story), they sold the company to Yahoo! for $170 million in 2009.

At WOMENA, we knew the Maktoob story well but what we didn’t know was how significant the multiplier effect on the wider ecosystem was after its acquisition. Until, that is, we came across Endevour’s fascinating report: “Multiplying Impact: Amman’s High-Growth ICT Industry”.

As the image above succinctly shows, there was a significant network effect in Jordan and across the wider Middle East following Maktoob’s sale. Toukan setup Souq.com that is the Middle East’s first unicorn and has seen strong growth across the region. Some of the other well known startups that can be directly attributed to Maktoob include Nibras, Arabia Weather, Khodarji, Sukar, Marka VIP and Jabbar Internet Group.

It shows how powerful the entrepreneurship ecosystem is. If one company can have such a significant multiplier effect, imagine what the multiplier effect is of the thousands of startups that have since emerged? What’s even more exciting is that this is only the beginning! The Middle East is very much in the early stages of its entrepreneurship development and the next few years will undoubtedly be exciting.

WOMENA’s Speakers  

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With the changes to our pitch meetings, we thought we’d reflect on the fantastic speakers we’ve had and the knowledge they’ve imparted on our assembled guests.

December 2014

Kamal Hassan, Founder and Chief Excitement Officer of Turn8, gave a talk on “Key Ingredients That Make An Angel” at our very first Pitch Meeting.

February 2015

Heather Henyon, founder of Women’s Angel Investment Network (WAIN) and then Managing Director of Balthazar Capital, was our February speaker and spoke on “How to Assess a Presenter”.

March 2015

We had our first international speaker with Mona Al-Mukhaizeem, Founder of Sirdab Lab Accelerator in Kuwait, speaking on “How to Assess an Investment Opportunity”, in partnership with TechWadi.

April 2015

Our very own Nichole Bates was our April speaker and gave a talk on “The Startup and Funding Lifecycle”.

May 2015

As summer approached, Ramy Assaf’s, Senior Associate at Middle East Venture Partners, workshop was “What is Due Diligence?”

June 2015

The final workshop before Ramadan and the summer break was led by Ameera Horriyat, Founder of Weyakum, in conversation with Bedour Al Raqbani of Kalimati and Sarah Wahbe of Dumye on “Social Impact: The Bottom Line”.

September 2015

Returning after the summer break, guests saw Elissa and Chantalle discuss “How to Maximise Your WOMENA Membership”.

October 2015

Coinciding with TechWadi’s Roadshow, Sharif El Badawi, TechWadi Head Mentor and Partner Leads, VCs and Startups at Google, spoke about “Building the Next Silicon Valley”.

November 2015

At our most recent Pitch Meeting, Dr. Keith Jones gave a talk on “Assessing Intellectual Property When Evaluating a Startup”.

Angel Series Workshops on February 20th and April 23rd  

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Join WOMENA for our two workshops in the Spring for both aspiring angel investors and entrepreneurs looking to raise funds. Participants can benefit from attending either workshop, but we recommend attending both to maximize value. Participants will leave the workshop with sufficient knowledge of angel investment to start on their fundraising or investing journey.

The event is open to all, regardless of background or financial experience. Tickets are free for WOMENA members. Investors should contact WOMENA for more information about membership.

February attendees will receive a 20% discount on the April 23rd workshop as well. Details will be released for the April 23rd workshop soon.

Agenda 

10:00am – 10:30am: Networking and Coffee 

10:30am – 11:10am: The Basics of Angel Investing led by WOMENA

The WOMENA team will introduce angel investing in a friendly, open environment and lay the foundations for the sessions throughout the day.

11:10am – 11:50am: What Makes a Good Startup? led by Ritesh Tilani 

If you’re considering investing in a startup, what should you look for in that company? From a strong team to market opportunity, Ritesh will examine what makes a startup a good investment opportunity.

Ritesh Tilani is a serial entrepreneur and venture capitalist, with blue chip MNC and top-tier global consulting experience. Ritesh is currently Co-Founder and Managing Partner at Enhance, a holding company consisting of online businesses that provide life-enhancing services to consumers. In addition, Ritesh is as an advisor, angel investor and board member to multiple startups and accelerators, founder of the award-winning mobile loyalty platform for social good, CareZone and the former Head of UAE at iMENA Group. Ritesh is a native of the UAE with over 25 years of experience in the region. He holds a B.Sc. in Economics from The Wharton School of the University of Pennsylvania, and an MBA from INSEAD.

11:50am – 12:30am: Demystifying Due Diligence led by Chantalle Dumonceaux

What goes on in due diligence? What should you consider? What is of particular importance? Chantalle will go through the steps of the due diligence process

Chantalle Dumonceaux oversees operations, strategy, and investments at WOMENA. She worked in Zurich and New York with startups and angel groups, where she has been involved in every facet of the angel investment process. Upon seeing what a positive impact angel groups make on society, women, and entrepreneurship, she decided to specialize and co-founded WOMENA to help Gulf women get involved in angel groups. She received her Bachelors in Economics from Columbia University in Economics.

Diversity (or a lack thereof) at Startups  

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Startups are doing some incredible things around the world. It’s a cliche but they have truly revolutionised our lives in every way. Unfortunately, this revolution does not extend to startups’ diversity.

It is well known that women and minorities are seriously underrepresented as founders and venture capital partners. We have actually gone backwards in female representation at VCs in the past 15 years. Until recently though, almost all research and data had looked at the senior levels of startups. What about the rest of the team? As Pinterest engineer Tracy Chou incisively wrote, the data just didn’t exist and was rather obfuscated to hide how poor diversity was.

Chou’s post led to growing pressure and clamour on some of the top technology companies in the world to release their diversity figures. Most of the largest tech companies now release annual reports on the state of their diversity and what they’re doing to improve.

It doesn’t paint a pretty picture. Here are some of the highlights (if you can call them that):

Despite the pressure to release diversity stats, there has not been a corresponding increase in representation. It’s going to be a long (and perhaps difficult) journey.

It’s not all bad though. Some companies have taken considerable and positive steps and for that we salute them. Perhaps the most admirable large tech company at the forefront of this movement is Pinterest. In a notable step, Pinterest publicly released their HR goals for 2016 a few months ago. Only last week, they introduced their first head of diversity, Candice Morgan.  Google also pledged to spend $150 million in 2015 on its diversity efforts.

Admittedly a few of the underlying causes of this lack of diversity go back many many years and are out of a tech company’s control. Far fewer women study computer science than men at university level and from a young age girls are put off science due to institutional and cultural reasons. Tech companies can only do so much to reverse this trend but this does not absolve them of all blame. The pressure on startups and tech companies to diversify their workforce must continue and they should become beacons of diversity.

 

Photo courtesy of greenlining.org

How An Entrepreneur Should Approach A Pitch  

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Strong pitching skills are critical to a startup’s success. To receive investment at any stage of the funding lifecycle, a startup will usually need to pitch many times, be it to WOMENA members or a venture capitalist. Entrepreneurs may find themselves pitching their company hundreds of times over the company’s lifetime. Hence, it’s important an entrepreneur hones these pitching skills early on for the best chance of success. While the pitching process may seem mystifying and intimidating at first, there are a few simple things an entrepreneur can do to boost their chances of success.

Check out successful pitches online

There are a plethora of websites out there with advice on what to include in a pitch and videos of startups pitching at demo days around the world. These give you a really good idea of what you need to do and you can pick and choose the best parts from each pitch you watch. Do this before you prepare your own pitch, particularly if it’s your first time.

Refine your pitch to the audience

Every pitch is different but most entrepreneurs give the same pitch to each investor. Entrepreneurs pitching to the WOMENA members might want to highlight how their company is targeting women, for example. The point is that each investor is different and each pitch should be too to reflect that difference.

Keep it short and snappy

An investor might hear dozens of pitches over the course of the week. If an entrepreneur doesn’t hack it right from the start, the rest of the pitch is going to be an unnecessary uphill battle. Immediately, tell them who you are, what the problem is and how your company will solve it. If your pitch is more than 10 minutes long, then you’re entering dangerous territory – the investor’s attention is probably waning (if it hasn’t already gone completely) and you need to wrap up quickly to keep that attention.

Back up what you’re saying with numbers

Numbers are an excellent and simple way to show the strength of your business and/or market. They’re easily digestible and can provide considerable insight. Make sure you know relevant statistics, you can back them up (i.e. you don’t make them up on the spot) and understand what these numbers mean. It’s very easy to state an incorrect stat but it’s so much harder to recover once you’ve been caught out.

Practice!

The idiom practice makes perfect really does hold true when it comes to pitching. The more you practice, the more comfortable you will be pitching to investors. Practice with friends, colleagues, advisors … anyone really. Get feedback too! The people you practice with could have some very useful advice.

Look the part

Startup founders’ dress is often associated with jeans, hoodies and T-shirts à la Mark Zuckerberg. While that might be the standard dress at work, it might come off poorly to a potential investor who doesn’t have a similar tech background. Notice too how Mark Zuckerberg has smartened up in recent years? There’s a reason behind that. You want to look respectable and show the investor you mean business. This doesn’t mean wear a suit and tie: that would probably look a little odd unless you’re pitching to a very formal investor or investment company.

How To Maximise Your WOMENA Membership  

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When we launched WOMENA, we wanted to make sure our members got the most out of their membership. There are many ways to maximise WOMENA membership and we’ve broken them down into seven categories.

Co-Investment

By investing together, members’ funds are pooled and have a greater impact. We also try to seek investment opportunities for our members where other investors are already involved. This allows us to participate in bigger rounds and it gives us the advantage of syndicating with experienced and knowledgeable investors. We always let members know if there is interest or commitments from other investors and this is something members should pay attention to and consider.

Contribution

We want our portfolio companies to succeed! We help them by making introductions to our networks and fellow investors and you can help them too! You can help your investments succeed by mentoring, advising, sitting on the board, introducing to your networks or help with key recruitment.

Collaboration

By working together, we use each other to offer guidance and advice on investment opportunities. If you have particular expertise on a topic in question, we would love for you to share it with the group!

Diversification

It is critical as an angel investor to diversify your portfolio. It’s great to invest in what you know, but angel groups give you the ability to invest in new industries. You should also use the team’s and members’ expertise to explore new industries

Attendance

At each Pitch Meeting, we have different kinds of startups pitching. They provide solutions in different industries and sectors and no one startup is the same. When you attend the Pitch Meetings, you get to meet the entrepreneurs in person and can get that gut feeling, that is often important in angel investing.

Our workshops are designed to make you feel more confident with angel investing and give you the foundational knowledge to go out and make your first investment. For a new member, ther workshops are very valuable.

And of course at all our events, you get the chance to meet and network with likeminded individuals!

Due Diligence Reports

Our due diligence reports into each company are very detailed and comprehensive. If you have expressed an interest in the company, make sure you read the report and if you don’t have the time, scan them. The WOMENA team is always here to answer any questions you may have about the reports and are more than willing to meet with you to go through the report.

Correspondence

We will frequently email you asking for your opinions on the companies and anything you may want from us. We love to hear from you! If you are interested in the companies presenting, you can always log into your Gust account and you can share with us your thoughts on the presenting companies.