Team integration, forward-planning financial forecasts and sustaining an aspiring eco- system at work are among the key factors that attract investors towards aspiring SMEs and StartUps in Sharjah, as stated Her Excellency Ameera BinKaram, deputy chairperson of NAMA and chairperson of the Sharjah Business Women Council (SBWC). In an all-inclusive launch event for the UAE’s new start-up initiative, SBWC launched the “Arabian Business StartUp Academy Sharjah Series”, to contribute to the enhancement of the local entrepreneurial ecosystem.
More than 100 entrepreneurs received personalised “startups” services from industry experts, and debated multiple strategies to enhance their business performances. This took place during an exclusive launch event for the academy, which was held onWednesday at the Executive Office of Her Highness Sheikha Jawaher Bint Mohammad Al Qasimi, Wife of the Ruler of Sharjah, UAE Chairperson of Nama Women Establishment, Founder and Patron of SBWC.
Held under the theme How to Overcome Funding Challenges for Start-ups and SMEs, SBWC and Arabian Business StartUp are partnering on this quarterly educational event for entrepreneurs, organised under the patronage of Her Highness.
“Entrepreneurship is the life-blood of a nation’s successful economy. With its characteristics of innovation, determination, ambition and perseverance, it is truly what drives a country to great heights and help secure its healthy future. As the SharjahBusiness Women Council, we pay particularly attention to the art, science and wonder that is entrepreneurship. We encourage women to step out of their boxes and take on challenges that are unique and unorthodox”, said HE Ameera BinKaram.
BinKaram added: “Our patron, Her Highness Sheikha Jawaher Bint Mohamed Al Qasimi, wife of the Ruler of Sharjah, UAE Chairperson of NAMA Women Advancement Establishment and Founder and Patron of Sharjah Business Women Council, has given us a mission this year to transform, empower and facilitate the success of 250 womenof Sharjah this year through entrepreneurship development. This was the thought process behind the setting up of the StartUp Academy Sharjah.” The keynote speech of the opening ceremony was delivered by His Excellency Ibrahim Al Mansoori, COO of the Khalifa Fund for Enterprise Development, who spoke about the importance of innovation in entrepreneurship and highlighted how the two are intrinsically linked.
“Innovation is the primary driving force in the development of an SME ecosystem. Innovation gives birth to new ideas and creates more effective methods and processes, all of which contribute to meeting the needs of customers. Innovation is essential to improving the quality of life, providing better resources and enhancing the way we interact and communicate. Innovation and entrepreneurship are closely related. Innovation sees new products and services being developed, while entrepreneurship delivers them to customers,” said HE Al Mansoori.
During the panel discussion that followed the four panellists – Shayma Fawaz, founder and CEO of Gossip the Brand; Elissa Freiha, co-founder of Dubai-based women-only group WOMENA; Craig Moore, founder of Beehive, and Ibrahim Jaber, co-founder Venturefin – agreed that the ecosystem for start-ups is now more developed than before.
“There is now a desire, and an acceptance, and understanding [among local investors] that the younger generations are founding tech, knowledge-based businesses,” said Moore about an increasing support to start-ups and SMEs in the UAE.Since the launch in November 2014, Beehive, the region’s first peer-to-peer (P2P) finance platform, has channelled over AED 35 million worth of finance to around 60 SMEs.
Moore added: “It is important to get the right type of funding at the right time,” he advised the attendees. “We are used to speed. It is critical for banks to learn how to serve SMEs. Time is critical for SMEs. Debt finance cannot take months. That is achallenge for banks and that has given birth to P2P platforms. I would say that we are a more efficient and effective [money] distribution platform.”
Dr. Fawaz was contemplating the idea of starting Dessert The Brand, a home-grown café with branches in Sharjah, Abu Dhabi and Dubai, from her college days. She left her six-year-long career at Mubadala to start her business which was supported by the Khalifa Fund for Enterprise Development.
“For banks you have to have some kind of collateral,” Fawaz said about the problems she encountered at the beginning. “But with the Khalifa Fund I didn’t need that. A lot of people are put off from starting a business because of that. The second thing is interest rate. And also there is no grace period. You know, start-ups take a while. With the Khalifa Fund I didn’t have to worry for 1, 5 years about paying back my loan. I could focus on my business.“
In 2014 Freiha co-founded WOMENA, a Dubai-based women-only angel group, to facilitate informed and streamlined investing in the region through an organised and professionally-managed angel group. In her opinion, angel investors are moreinterested in the personality of an entrepreneur than banks. “Banks tend to be more corporate, they look at numbers and we look at the person,” she said. “So add a human element to it, don’t just give them funding.”
However, Ibrahim Jaber, co-founder of Venturefin, a Dubai-based equity and loan crowd investment platform, called for more understanding for the banks’ hesitation to fund start-ups. “Would you take some people’s money and give AED 1 million to a three-month-old start-up?” Jaber said, “We don’t want another crash like 2008 to happen. So as much as we want to help these businesses, we need to understand the reasoning of the banks here as well.”
When asked by Neil Wood, publishing director at ITP Publishing, who was moderating the panel, what entrepreneurs themselves can do to increase their chances to obtain finance, Freiha said: “Talk about your idea and don’t be afraid that somebody will stealit. That mentality really fosters the ecosystem. Don’t be shy about your business. There’s nothing more off-putting than an entrepreneur lying or hiding something about their business.“ Jaber agreed and added: “People here are too scared, even paranoid to talk about their idea. There is only one degree of separation from you and other entrepreneur. Whydon’t you learn from each other?” HE BinKaram spoke from the audience to point out that the Arabian Business SharjahAcademy Series was initiated to push the boundaries and help entrepreneurs connect to each other as well as to utilise the best use of the current institutions, initiatives, funds, and similar.
On behalf of the Khalifa Fund, which has invested AED $1.4bn into local businesses of which 60 percent are start-ups, His Excellency Al Mansoori added: “We need to collaborate because the ecosystem is not only the government, but also the publicsector, the private sector and academia. You cannot expect one organisation to do something on a standalone basis.”After the panel discussion, Joy Ajlouny, co-founder of Fetchr, the first Silicon Valley- funded app in the MENA region, was invited to the stage to share her main learnings for securing start-up finance.Fetchr app has revolutionized courier services in the region by offering a solution to parcel pickup and drop in a region where address systems can be difficult to navigate. It uses a patented technology to schedule pickup and delivery using mobile phone GPS coordinates.Prior to Fetchr, Ajlouny had found another successful business – her company Bonfaire, a Silicon Valley-based e-commerce platform for luxury footwear, was bought by Conde Nast and LVMH. Ajlouny said: “Raising money as not only a woman, but anybody, is the hardest thing you can do,” she shared with the attendees. “But there is no magic on how to raisemoney. You have to have the passion, but you have to have a solution when you pitch to investors. In Silicon Valley, they ask you about your story. They invest in a person who has the drive and passion to succeed.”
Fetchr is a first of its kind app for the Middle East region, and also the first that has successfully raised $11 million in Series A funding from Silicon Valley-based New Enterprise Associates (NEA), the largest venture fund in the world. Speaking about her experience in the region, Ajlouny added: “The most difficulties I had were about how to deal with fear [here]. It is very hard to start a company here. In Silicon Valley you need a garage and your mother’s WiFi whereas it is very expensive [here], but people come here with a dream. So I think that it is good, but we can be better, the UAE should be the centre for tech innovation in the Middle East.”
During the last session, Mudassir Sheikha, co-founder of another UAE-based success story – Careem, and Huda Al Lawati, partner and CIO at Abraaj Capital, Careem’s leading investor, shared their tips on securing finance in the region.Sheikha said: “Entrepreneurs love problems,” said Sheikha. “You have to be looking for problems and focusing on solving it. They [Uber] came with more money and better technology, and the only thing that helped us was that we were solving local problems. That has remained our DNA. Number two is to be quick and flexible. We were quite fascinated with the concept of minimum viable product (MVP) at the beginning. We gave ourselves six weeks to develop our product and listed 10 features it should have. She added: “We launched it, but we still haven’t built all 10 [features] because the market hasn’t been asking for them. But we’ve created a culture of listening and adapting to the market. You have to be flexible. Now growth is our priority and our target is to grow 30 percent per month. Each of our employees, not just the management, gets a notification every 15 minutes on the current percentage of our growth. So we get reminded about whether we are on track or not.Sheikha explained: “When we are not growing six to seven percent per week, we quickly look into all possible issues. Time is against you, so you need to be quick and flexible. The third is hire awesome people. Here it is a bit challenging to hire greatpeople. Interestingly top talent can make more difference at a start-up than in a big company. They focused on offering their employees equity, acquiring and not giving up which he explained by adding that it usually takes time to get good people on board.” In November 2015 Careem secured one of the largest investments in the region’s emerging technology sector to date from a pool of investors led by The Abraaj Group (Abraaj)
The Series C investment of $60 million, which has been used to drive Careem’s growth into new markets, also included Al Tayyar, STC Ventures, Beco Capital, Impulse (asubsidiary of Kuwait Investment Authority), Lumia Capital and Wamda Capital.
Sheikha concluded: “Fourth is to have a purpose, and, lastly, to get local allies. We always preferred local investors and people at Abraaj can give us insights into the local market. They [local investors] can be your ears and eyes on the ground. Also, wheninvestors come on board, don’t be afraid of them but make sure to give them some work. There is a lot of willingness in this region to help and support others. Don’t be shy to ask.”
Al Lawati said: “The most important question we need to address is, what do investors look for in entrepreneurs? What are the driving factors that enable them the growth they look for? This is no science, as the formula for such a topic doesn’t exist. Investors seek growth in their financial performance, while entrepreneurs seek growth through theirpassion. To establish equilibrium where both parties work together in harmony, entrepreneurs need to establish a sustainable infrastructure where investors can access to learn more about their business’s financial standing and market-value forecasts.Additionally, entrepreneurs would have to establish a strategy highlighting their business’s core competencies and the quality of demand they have created through their products or services.”SBWC and ITP Publishing Group’s Arabian Business StartUp magazine will organise the next event on March 30 while the subsequent sessions will be held in September and December.
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