Palestine gets its first seed fund, supported by MENA Apps and USAID
The startup scene in Palestine has been slow to build over the past
few years, led by initiatives like Bazinga
and grassroots organization Peeks. This past year, however, support
has flooded into both the West Bank and Gaza, with the start of
Hi-Tech Hub, a tech talk series based on Amman Tech Tuesdays, the
resurgence of Gaza’s first incubator,
BTI, and the recent launch of Fast
Forward, Palestine’s first accelerator, and Gaza
Sky Geeks, a high-tech accelerator supported by Mercy
Corps.
A few major investment deals from Sadara Ventures last year also
validated the ecosystem: travel portal
Yamsafer
secured $1 million in September, while SMS platform Souktel
also announced
$1 million in investment last December.
The gulf between startups coming out of incubators and
accelerators, and those securing Series A funding is wide. Yet a
new initiative hopes to close the gap.
Last month, USAID’s Compete project, and Dawilah Investment
launched a new seed investment and support vehicle for the
Palestinian Territories, named, cutely, Arabreneur.
Arabreneur will support startups that have passed the incubation
stage and are ready to go to market with a product. The startups
can come from any incubator in the Palestinian Territories, such as
Fast Forward or PICTI.
To support startups coming out of Fast Forward and PICTI’s
incubator, the initiative offer a local co-working space and a
sector-agnostic seed fund and angel network, that will invest an
average of $50,000 to $100,000. In its first year, Arabreneur plans
to invest in around 10 startups, supporting their growth with
mentorship and working spaces in Palestine, Jordan and Dubai. The
goal is to create at least 50-100 new local jobs in Palestine.
“When we studied the Palestinian market, we saw a gap in angel and
seed funding,” says Mustafa Deeb, the ICT sector lead at USAID’s
Compete Project. “While we have Sadara Ventures, Siraj Capital, and
Aureos Capital investing at the VC stage, these venture capitalists
are not finding enough supply in terms of a pipeline of startups.
What we wanted to do is create an entity that is fully managed by
investors, that will select and filter startups, and support them
to scale beyond their initial incubation.”
Arabreneur is founded and led by Abdul Malek Jaber, the founder of
MENA Apps, an Amman-based initiative that supports Arab web and
mobile startups. MENA Apps has seeded the initial investment for
the Arabreneur fund, with the intention of reaching $2.5 million
this year as 10-15 angel investors come on board.
USAID will cover operational costs for the fund, while MENA Apps
will support by leveraging its global network of potential
investors and mentors; Arabreneur will also connect with
universities throughout Palestine and the Arab world to further
link entrepreneurs to international thought leaders.
“For years, USAID has worked with the ICT sector to implement
programs that include skill-building, creating new jobs and
linkages with international expertise all with the aim of
propelling Palestinian firms to compete at a global level,” Ghassan
Al-Jamal, the USAID Project Development Specialist-Private
Enterprise Office/USAID West Bank and Gaza, said in a
statement.
Abdul Malek Jaber also stated, “We have been working in Jordan and
Dubai for two years and made 15 investments in start-ups, some of
them are Palestinian start-ups. Now we start our operation in the
Palestinian territories and we will capitalize on our partnerships
around the globe to open the way for Palestinian Start Ups to make
it to global markets.”
The initiative goes live this month.