The spectacular rise of Silicon Valley start-ups, including Uber, Lyft and Slack, gives the impression that success in the industry is easy.
In the Middle East, ride-hailing app Careem has also seen success, after it was bought by Uber for three billion dollars. But can that be replicated? What are the challenges facing start-ups in the Middle East?
Mufeed Ahmed, cofounder of Qubicle and WashNow, and Majed Lababidi, CEO of Droobi Health, join Counting the Cost to talk about start-ups and the path from idea to implementation in the Middle East.
“There are three top challenges every start-up has to face: one of them is fundraising, [number two is] hiring the right staff and number three is monetising the business to scale. I think the third one is very common to all the start-ups, internationally and in the region. But the first two, it’s very difficult here in the region,” says Lababidi.
“People would actually throw in a lot of money once you are successful, once you have a lot of orders, but to have people trust in you from your idea to your launch stage, that’s one of the most challenging things in the region,” explains Ahmed.
“In Silicon Valley, they are used to ideas of start-ups, and they have seen successful start-ups make a lot of money,” says Lababidi. “Here in the region, we have money, we have angel investors, we have people ready to invest. But not in the idea stage, or not in the start-up stage. Because they don’t have a previous experience and they don’t see a lot of start-ups actually making money.”
However, he is also hopeful that things are changing.
“Now, it’s different,” he says. “We witness Uber and Talabat and Careem … they have very successful stories now, and so the mindset is changing … Now, they look for creative ideas … to invest in.”
Lababidi believes that “With this big news about the three-billion-dollar acquisition for Careem, now international players look at the Middle East as ‘well, there is something here’ – which is something that was missing. Trying to get some funding [for Droobi] we went to different conferences in Europe and in the US, and they had zero interest in investing in start-ups in the MENA region, but now, with Careem … and Talabat, the radar is here … on the region’s start-ups.”
Careem’s success story “boosted the confidence of many start-up founders … and globally, a lot of investors have their focus on the Middle East now,” Ahmed agrees. “But for me, the most exciting part is, that the Careem founders … I am sure they are going to invest in a lot of regional start-ups. I am sure they are going to help a lot of regional start-ups because they themselves have lived the story.”
Source: Al Jazeera
The spectacular rise of Silicon Valley start-ups, including Uber, Lyft and Slack, gives the impression that success in the industry is easy. In the Middle East, ride-hailing app Careem has also seen success, after it was bought by Uber for three billion dollars. But can that be replicated?