Sailing the Rocking Boat

Sailing the Rocking Boat

Do you already see the sun rays that pierce through clouds after every storm?

They are always there, waiting for us 🌤️

And with that in mind, we reached out to a couple of founders to check on how they’re sailing through the rough corona seas. Last month we analyzed the overall endurance of business sectors, and today we will dive deeper to see how startup founders think, how their businesses adapted and what they can teach us.

More good news from ArzanVC’s Family will follow. Hold on tight to your boat’s helm! 


Copy the way I cope

Crises are part of life. They force us to think, rethink and make things better. It’s a rule that crises always give rise to something good. Even John F. Kennedy said: “When written in Chinese, the word crisis is composed of two characters—one represents danger, and the other represents opportunity.” And that’s what we @ArzanVC really believe in.

But what do founders believe in? We asked them. We were in touch with founders from multiple sectors—Algodriven (automotive tech), Almentor (edutech), Teela (essential e-commerce), The Luxury Closet (non-essential e-commerce), Tons (groceries e-commerce) and ViaVii (travel e-commerce)—and these are their insights and words of advice:

Adapt. Act quickly. Innovate. Whenever possible, all teams opted for working remotely, as the rest of the world did. Some of the founders experienced unprecedented demand, while others had to find alternatives to delivering their offering. Algodriven had to fast track new features to enhance their products and offered extended payment terms. Similarly, Almentor had to customize new products to manage the very high demand for the e-learning services. Teela saw it as an opportunity to expand and grow the market share. Tons chose to control the number of orders and slowly grow the capacity while onboarding new stores. The Luxury Closet made sure to implement a healthy supply and demand and stress-test financials. ViaVii was the first to launch online authentic cultural and artistic experiences, which gave them a leverage over international competitors. “We translated going into self-quarantine to a fun, entertaining and educational experience,” said ViaVii.

 

 

What are the most important attributes of a startup right now? Speed. Some founders believe that this is a unique opportunity for startups as many governments and corporations realized that it’s startups who can help solve nation-wide problems. Or world-wide. Empathy and communication are also crucial. “We’ve tried to engage all our stakeholders, from employees, to customers and investors so that we can work through the situation together,” explained Algodriven. “Establishing clear communication will help businesses win people’s confidence,” added The Luxury Closet. Teela thinks that having a vision is the key: how do you envision your business after the crisis? If implementation is slowing you down, an alternative route, according to ViaVii, can be a beta.

And the founder’s personal advice? We all have to keep our heads above the water level and stay positive, but don’t forget to always plan for the worst. Countries around the world have started lifting their restrictions. According to Tons, “companies who endure this situation will be more resilient and valuable going forward.” But “don’t jump on any opportunity and lose your original path. Maybe you’re benefiting now because you built the infrastructure to serve the right model, so stick to your model and don’t lose focus with the temporary, and maybe distracting, market needs,” warns Almentor. Teela has another view: “Maybe it’s the time to start a new venture, launch a product or a brand. And while people are staying home, they’re willing to try any product that is delivered to them.”

Who knows; maybe now is the right time to make your big move! Plan well and execute by day.

TL;DR (too long; didn’t read) 
We were in touch with the founders of Algodriven, Almentor, Teela, The Luxury Closet, Tons and ViaVii. According to them, the current times are favoring those who act quickly, innovate, customize and stress-test. What matters is speed, empathy, communication and vision. And don’t just jump on any opportunity out there. Plan well and execute by day.


 Family Postcard

ArzanVC’s family post office was very busy the past month and we couldn’t be any prouder!

Our Eyad AlBayouk participated in an online discussion by Qoyod (April 16th), giving advice on how to invest during corona times.

LUNCH:ON has partnered up with Gulf For Good to allow all the app user to donate to children in Nepal, Tanzania, Uganda, Peru and Lebanon and keep them fed, hydrated and educated.

Swvl has collaborated with Egyptian Food Bank (EFB) to support day laborers during the holy month of Ramadan.

Meanwhile, Repzo is offering Jordan’s supermarket, cafe and restaurant owners their very own application where customers can order their fav food, drinks and meals safely and securely from their homes.

 

UAE’s iKcon introduced various additional safety measures, including an additional layer of protective plastic packaging for all deliveries. Also, all bike riders are no longer allowed to enter iKcon premises to keep them separated from the in-house staff.

And finally, with all the teaching/learning happening online, Reportcard’s student CRM with an integrated online collaborative classroom becomes definitely handy! Reportcard also hosted a webinar on “Teaching Online with Zoom”.

 


 Latest Jobs @ArzanVC Family

 Those of you who recently had to downsize your company workforce, don’t hesitate to contact us and we will help your former employees to find a new job in other startups.


 Rehydrate during the night and stay positive. Better times are just around the corner.

Hasan

MENA startups vs. black swan

MENA startups vs. black swan

No Fool’s day this year.

If you’re reading this on your phone, at least we took you away from your laptop cameras and back-to-back online meetings.

We decided to have a look at the endurance of businesses during these tough times. There are numerous businesses that are doing pretty well right now, to the point that they can’t meet the demand. (And we are not referring to the producers of toilet paper.)

We will also bring you some good news from ArzanVC’s Family. Because what the world needs right now is more good news.


 Black swan is a test of adaptability 

You heard it. We are living through the biggest global crisis since 1945. It will set the tone for the years to come. And maybe even decades. Some say that the crisis may lead to a new way of economic thinking. It most probably will. And to new (or enhanced) and more flexible business models.

 The word of this crisis (and any crisis in fact)—whether for us citizens who have to abide by the rules and restrictions of our governments or for the companies and businesses in our local and international environments—is adaptability.

 And who can adapt best? The businesses that are flexible. We have entered a work-at-home economy, which favors companies that can come up with solutions no matter if the life moved out from offices to our dining tables and living rooms.

 We are noticing uniquely innovative and collaborative actions, with many businesses shifting their modus operandi to adapt to the market demands. This black swan event definitely favors businesses that possess strong organizational agility and alignment. And above all, online players clearly have a top leverage right now.

 In the diagram below, we have included a few examples of local companies (MENA) next to their sectors.

 Disclosure: Some of the companies belonging to the high risk zone of the diagram might not really be affected negatively if they are able to adapt.

 We placed the restaurants delivery platforms into the low-to-medium risk zone. These companies would be expected to do great right now, but the curfew that is set by some governments puts a restriction on when the orders can be made. Customers may also think twice of the extra expenses (cooking at home may be cheaper), and the issue of hygiene during food preparation could also be of concern given the pandemic. 

 Why is ride-hailing at medium risk? Passenger rides are down (for example, they equal 0 in Kuwait). However, if the business model is flexible, the companies can wait things out. Plus, IntiGo (Tunis) is now providing grocery delivery and concierge services, and Lyft and Uber are also considering the same and medical supply. 

Essential e-commerce at medium risk while non-essential e-commerce is at high risk because the consumer choices have been primarily redirected to necessities like staple goods. Yet shopping for home gym equipment, books, toys and games may make a good impact.

We also think that social media may be little squeezed due to decline in advertising spending. Though the current user’s usage is massive.

On the contrary, communication & teleconferencing tools (vs. in-class teaching, office meetings etc.) are booming. WFH is safe and it reduces employers’ costs. Many Gulf countries lifted bans on Zoom, Skype for Business, Microsoft Teams and others. Slack shares jumped up by 26% this year, while Microsoft Teams’ DAUs reached 44 million (vs. 20 million in November). And despite the rising demand, Zoom’s call quality has not degraded!

As we are now embracing e-baskets over regular trolleys, online grocery delivery platforms face a doubled or tripled surge in online orders. Additional onboarding of thousands of shoppers and support staff is a new trend as well as safer and contactless delivery procedures. The increase in demand is unprecedented yet definitely a “good” problem to have right now!

And we cannot forget the crucial role of online streaming platforms – movies, series and podcasts alike – that are giving us and our kids a huge helping hand during these quarantine and self-isolation times. In fact, there is so much streaming that the providers had to reduce the quality to SD (primarily in Europe) and ask people to be more data-spending conscious. By the way, Disney+ launched in Europe in the best time possible!

Although this unprecedented growth of new customers and service users may cease once the crisis is behind us, we believe that it will ultimately change certain consumer habits. Just notice the growth of the online grocery stores: many of them gained the trust of their customers only thanks to COVID-19. And that trust won’t be temporary!

Is this the new normal? Will we see more online conferences, bigger online grocery orders and cloud kitchens rivaling the conventional cooking outlets? (Hopefully; we made a recent investment in one cloud kitchen start-up.)

The truth is, many of us desire to have 24/7 goods and services, and the crisis has only pointed out that our day-to-day actions and transactions do not necessarily require in-person, physical presence.

📣Call-out to founders: Share with us how you are adapting your business to the crisis. We would like to include your stories in our next newsletter.

TL;DR (too long; didn’t read) 
The word of the COVID-19 crisis is adaptability. Business areas such as groceries delivery, online ed-tech, streaming and online comm platforms are at low risk, while ride-hailing, essential e-commerce and logistics are at medium. High risk zone entails of travel e-commerce, booking apps and non-essential e-commerce. But we must not forget that the survival of each and every business depends on how flexible it is to adapt and withstand the crisis.


 Family Postcard

Flexxed up

Flexxpay has raised another pre-series A investment.

 

 Cartlow has secured a six-digit USD figure in its first round of funding from Arzan VC, Vision Ventures and a group of angel investors.

And Lunch:on now provides free & contactless home delivery of its 25AED lunches from 200+ restaurants.


 

Latest Jobs @ArzanVC Family


 Corona Essentials

  • If they can survive 1 year in the space… notes on self-isolation.
  • Feeling anxious? Snapchat launched a Here for you tool.
  • Once you’re done with Zooming and Slacking for today, throw a Netflix party!


    Black swan, it’s about time you fly away!
    And the rest of us—let’s try to do WFH and social distancing for a little longer. 

Hasan

 

Any Profits in 2020?

Any Profits in 2020?

end of radio silence.

This is not a hacked newsletter. Nor have we relocated our offices to another planet. In fact, we grew into a truly regional VC, having on-ground presence in 5 countries across the MENA. Plus, we did our first closing for Fund II in August and made a whopping 4 new investments. Did I mention we grew our team to 8 members? Okay, enough of the news shower.

Amman hosted us for a few days this week for some team-building fun. You can see sometimes we also cook other things than sizzling deals! We also organized Founders’ Coffee & Chat – a casual meetup with a number of startups in Amman to brainstorm ideas and expansion. Well-spent time indeed. We already miss the laughs.

Now—first things first: Arzan VC’s top 10 trends for 2020. Then we will show you what’s the magic formula of growing a sustainable business.

Let’s go!


The 10 for 2020

1 Cash burning is not so popular anymore and the doomsday of blitzscaling may be near. Immense growth by surprise doesn't always result in a victory.

2 Yes to bootstrapping. Businesses would be checking on their revenues and minimizing losses by focusing on growth in their most profitable areas.

3 Profitability before growth. Priorities reversed.

4 What's your unit economics? Time to do some math 🧮➕➗

5 Long-term sustainability is the new (or old?) kid on the block.

6 Less competition. Less cash burning would be a game changer (ender) for many.

7 B2B could pave the way. Because they are keener on organic growth and sustainability.

8 More market consolidation. Mergers, acquisitions and IPOs.

9 Are you environmentally sustainable? Jeff Bezos has $10B fund for climate-based projects 💵

10 In MENA, initiatives that address logistics issues will continue to dominate the deals. That is transport, delivery, payments and e-commerce.

Disclosure: We don’t necessarily agree with the above trends, but we would still like to share them with you.

 


 Any profits in 2020?

There’s a lot of recent whispering out there about sustainability and profitability. The world got alerted when in the second half of 2019 Japanese conglomerate SoftBank, a major investor in Uber, Slack and other stellar startups, got shaken by the weak performance of some of its major investments. Not to mention the dramatic failure of WeWork.

Uber, just like Amazon, is a global tech monopoly in its respective field (that’s why they call it “Amazon of transportation”), but do you know what else makes these two similar?

They wouldn’t have been the companies they are today without their growth tactic: blitzscaling. It is a shortcut to immense growth via cash burning, resulting in massive edge in technology and customer base. You’re simply pouring in the money even if the numbers don’t make sense. Sustainability may seem trivial and profitability got a red light. What if the traffic signs don’t work and the business will never see its profits? The argument is that the growth would eventually compensate for the financial losses sometime in the future. Note: eventually does not mean definitely and, at one point, each business has to take certain measures to ensure sound financial standing in the long-run.

It took Amazon over a decade to touch the profits. Uber is yet to be profitable and its CEO recently said it would finally happen by the end of 2020. The main question is: when Uber decides to take measures toward profitability, to what extent would their customers stop using the Uber app? We @ArzanVC don’t feel it’s going to be anything major! Uber improved our daily logistical life and most people would be willing to pay more. (Let’s hope that’s the case—we have invested in a number of mobility players.)

Ultimately, we all want our businesses to be sustainable and profitable. Blitzscaling is a valid growth approach, but it doesn’t fit all business models. Many investors are recently eyeing businesses that opted for a bootstrapping tactic. Those who deliberately focus on the most profitable areas and slow, paced growth. If Uber got bootstrapped, it wouldn’t have grown so fast and it would have most probably been already profitable for some time. Or maybe it would no longer exist, since other players would have grasped the opportunity and burnt cash to grow their market share at the expense of Uber!

We shouldn’t need to remind you that each starting business must know the right ingredients of success and you must take into account different factors when considering a certain growth strategy. Is there a way to find out and predict the feasibility of your business model? Call in unit economics. It is a tool that tells you how much money one unit of any solution or service will generate. Essential from day 1. How much does it cost you to generate $1 value? Unit economics basically measures how much the business gains (or loses) from each customer (or transaction). You can then know if you are on the right path to profits and what to focus on in order to make that hit.

calculate

 Many startups are losing with each new customer. Why? Because it costs them a certain amount to attract a customer who is not going to stay with them for long. If you spend $2 for $1 value and your customer base is expanding way too fast, you will only be able to go on at this pace until all your money runs out… 💸

In simple terms, you need to balance well your customer acquisition cost (CAC) and customer lifetime value (CLV). That balance can be either positive or negative. Positive unit economics brings cash in, negative robs you of it. If your CAC is bigger than your CLV, you’re basically paying your customers to use your service. You may gain a mighty market share in the early stages, but that alone would not make your business sustainable. In the early days of Uber, Lyft and WeWork, no one looked at profitability—they actually used to make fun of anyone who would do that! After all, VCs are not in the business of early profitability yet the value proposition of any business should always be sticky and impactful. Are your customers willing to spend more or can they “live without you” once you start playing with the pricing? If they feel like your services/solutions are “nice to have but not must-haves,” this means they will be sensitive to price changes, lowered quality etc.

The lesson for 2020 is simple—hold on to your fundamentals and focus on real value creation.

Being over-ambitious on your growth strategy may often turn out to be risky. Do your unit economics, set realistic targets and spend responsibly so that you are able to create and sustain your value. Do you want to have recurring revenues? Then persuade your customers to stay with you for a while. Get under their skin.

TL;DR (too long; didn’t read) 
Following the falls and losses of many flagship startups in 2019, businesses (and investors!) shift their attention towards unit economics. Measuring costs/gains per transaction can reveal a lot about the future sustainability of any business. Growth-at-any-cost is becoming a strategy of yesterday. Today cares about the value proposition, so that tomorrow could be about long-term sustainability.

 


Welcome to the Family 

👋👋👋 Repzo, Cartlow, FlexxPay and iKcon. The 4 latest investments we made. Welcome to our ever-growing ArzanVC family!

Repzo is an Amman-based mobile employee management and CRM platform that turns a device into a standalone field force management tool. It allows FMCG and pharmaceutical companies to track and monitor their field employees. Repzo is used in 7 countries by more than 2,500 representatives.

Cartlow is a Dubai-based money-saving e-commerce that offers its customers various famous-name products at lower prices. It recycles, tests and resells returned/excess goods from retailers. No wonder the app has more than 1 million active users!

Dubai-based FlexxPay aims to bring financial security, dignity and savings to those experiencing financial stress. How? By fixing pay frequency problem through an instant pay platform.

iKcon – Innovative Kitchens Concept from Dubai – is all about cloud kitchens in prime locations! Thanks to these modern kitchen spaces, iKcon brings amazing F&B brands to the market – from existing chains to new concepts.

kitchen art

👋👋👋 Repzo, Cartlow, FlexxPay and iKcon. The 4 latest investments we made. Welcome to our ever-growing ArzanVC family!

Repzo is an Amman-based mobile employee management and CRM platform that turns a device into a standalone field force management tool. It allows FMCG and pharmaceutical companies to track and monitor their field employees. Repzo is used in 7 countries by more than 2,500 representatives.

Cartlow is a Dubai-based money-saving e-commerce that offers its customers various famous-name products at lower prices. It recycles, tests and resells returned/excess goods from retailers. No wonder the app has more than 1 million active users!

Dubai-based FlexxPay aims to bring financial security, dignity and savings to those experiencing financial stress. How? By fixing pay frequency problem through an instant pay platform.

iKcon – Innovative Kitchens Concept from Dubai – is all about cloud kitchens in prime locations! Thanks to these modern kitchen spaces, iKcon brings amazing F&B brands to the market – from existing chains to new concepts.

 

Family Postcard

 

Where to begin? 😍 

Ka-3.5M-Ching!
Amman-based game publisher Tamatem raised $3.5 million Series A.
yay

POSRocket opened new offices in Kuwait and Alexandria, and they just made the first step to enter the Saudi market. Their integration with Talabat and FineDine is now live, and they also launched a new product called Kitchen Display System (KDS) that replaces printed or handwritten ticket orders in commercial kitchens by connecting to the restaurant’s point-of-sale!

Swvl, a premium alternative to public transport, launched new routes in Egypt between Cairo and other governorates. Trukker, the Uber for trucks, expanded in Egypt. And Cartlow, one of our latest investments, has recently entered Saudi Arabia.

+ 1 news full of love – CrowdAnalyzer looked at how MENA celebrated Valentine’s Day in 2020.

date time
Latest Jobs @ArzanVC Family
Please stay healthy!
stay healthy
Hasan
Open the gates

Open the gates

Here’s the thing – entrepreneurship is the hot topic in the region and thankfully, governments and institutions have caught on. Whereas small business lending was the primary method of involvement from governments in the past, today we are seeing much more in terms of training programs, the introduction of new licenses and structures, as well as funding efforts. Having said that, in order to encourage growth in the sector, there needs to be a favorable environment for venture capitalists to operate. There are positive initiatives being announced in an effort to create such an environment. For example, Bahrain Development Bank has recently announced a $100m venture fund of funds. In the UAE, a new venture capital regulatory framework has been put in place to guarantee a standard of governance for the asset class, thereby increasing its competitiveness and attractiveness. Saudi Arabia, on the other hand, is exploring different platforms to invest in VCs and attract them to the market. But where do we stand and why is this really important?

Government funding programs vs. VC funding – what difference does it make?

While most government funding programs are created because of social and political reasons, VC’s are founded with the aim to generate high returns to their Limited Partners. Due to this critical difference, we conduct our business in very different ways. VC’s are crucial for the success and development of every entrepreneurial ecosystem. Like any other industry, if competition is there, the venture capitalist will be pushed to develop and innovate in order to differentiate themselves from other players. Startups will ultimately receive a better “service,” and will see that the financial support is secondary to the added value provided by VC’s. Moreover, founders will be able to shop between VC’s and choose the right partner. Over time, VC’s will start to narrow down their segment focus to achieve expertise and will recruit high caliber team members and experts to ensure competitiveness. With that in hand, strong VCs will be able to intelligently filter and invest in top startups with solid teams and products. At this stage, great entrepreneurs have been funded while VC’s are continuously upping their game. This environment will attract more high-potential entrepreneurs to pursue their dreams and the ecosystem will flourish. Going back to our topic, If governments want to take on the VC role, who will they compete with? With the absence of LP’s, how will their performance be evaluated? Their teams probably would not have a carry incentive scheme, so how can we gauge commitment? Would fixed salaries of team members push them to select the best startups or focus merely on the value deployed and the number of companies funded? How will procedures, layers, and bureaucracy affect responsiveness?

Alright, so what can be done?

All of us ecosystem participants (VC’s, founders, governments, etc) have the same ultimate objective of building a thriving ecosystem, but each one of us has a different driving force. We need to work towards meeting our individual goals to collectively benefit the overarching goal for the government: job creation, economic development, and progress. In order to achieve that, I believe we need to see the following: 1. Define roles: there are many players in the ecosystem and everyone’s role is very important, however, we fall into the trespassing problem. This problem will only be solved if we can define each player’s role and be disciplined about it. If everyone is dedicated to their roles, an ecosystem can flourish efficiently with fewer obstacles ahead.  Government roles can include ensuring proper legal structures and protection are in place as well as reforming taxation and labor policies. 2. Say no to direct funding: I am a strong believer that governments should not fund startups directly. They should act as enablers and regulators. Why? Simply, they do not have the required DNA which can match that of a specialized investor. In addition, government officials are influenced by politics and many other social aspects all which influence their decisions and vision. 3. Collaborate: GCC governments are working in silos when it comes to solving VC’s and entrepreneurs’ challenges. Collaborations between governments will speed up the process,  allow better knowledge sharing and bring all countries up to the same level.  I take part in many of these discussions and there is a significant difference between where each country stands. Will we see the day where entrepreneurs are allowed to expand cross-border and operate in the region more easily, allowing them to grow their businesses and attract foreign investment? We sure hope so.  

TL;DR (too long; didn’t read)

Supporting the booming entrepreneurial ecosystem means also creating a favorable environment for VCs. Regional governments can get on board with this by focusing on empowering entrepreneurs, leaving funding to investors, and collaborating with each other to create a thriving ecosystem.
  Read the whole ArzanVC July newsletter here
Are you in Amman?

Are you in Amman?

We’re back again with some great news this month, most recently our investment in Swvl! We’ve also been working on a couple of transactions we will be announcing soon. Our beautiful startup studio and co-working space, Blender, is coming to life and we’ve opened up applications! You can have licensed offices, dedicated desks, and more.  Here’s a peek… blender-space Lastly, we took a look at the state of startups in Jordan. Enjoy!

Jordan Tech Startups

Ten years ago, reports described Jordan as the Middle East’s Silicon Valley in the making.   Jordan, backed by the king’s efforts and armed with a large developer community and ample human resources, led the pack with its number of tech startups and notable exits.  However, over the years this growth has been stunted by laws and regulations that were not fully conducive to entrepreneurs’ needs.
Forward to today, the general take is that Jordan has lost its edge.  Tech sectors are growing in the region, with entrepreneurship moving up on every country’s agenda and the startup bug hitting young individuals everywhere.  Nevertheless, Jordan continues to be one of the regional leaders in the ICT field, with many tech founders across the region originating from Jordan.  For this month’s market map, we took a look at 84 active Jordan tech startups and the sectors they are focusing on. We then identified areas of development or gaps in the market where we would like to see more action.
market-map-Jordan

With a vast proportion of the Arabic content on the web originating from Jordan, a large number of startups we found are operating in the media and content category.  This includes information resources about the weather (Arabia Weather), food recipes (Atbaki), and everything in general (Mawdoo3).  Several content producers are focusing on video content (e.g. Istikana), audible content (e.g. Masmoo3, Sowt) and content for children (e.g. Shablol, Kharabeesh).

E-commerce was the second largest category and includes a range of businesses from multiproduct stores (e.g. OpenSooq) to platforms for buying hardware (e.g. Jafar Shop), books (e.g. Jamalon), apparel (e.g. Jobedu), real estate (e.g. AqarCircle ) and many more. The technology category is a broad group that includes companies doing innovative things such as mapping technology (e.g. Navcode), assistive technologies for the deaf (e.g Mindrockets), and chatbots (e.g. Arabot, Eila).   Several companies provide tools for the web such as website builders (e.g. websity.me) and website translations (e.g. dakwak). The fintech sector in Jordan is more developed with companies offering payment services (e.g. CashU, Hyperpay), crowdfunding (e.g. Afkarmena, Liwwa ), and lending (e.g. Solfeh). In the health tech category, companies provide remote doctor consultations (e.g. Altibbi), medical information (e.g. Webteb), and medical marketplaces for suppliers and end users (e.g. Aumet). The edtech sector in Jordan has been quite active with startups offering online courses (e.g. Edraak), peer to peer tutoring (e.g. Gattaa), learning management systems (e.g. edaura), and specialized training courses (e.g. Salalem). Several companies in gaming publish games serving the Arab market (e.g. Tamatem, play3arabi). The social category covers networks that connect a variety of groups including travelers (e.g. Friendture) and readers (e.g. Abjjad).  It also includes social media management tools that help with automation and customer service (Sortechs, Sadeed). In enterprise tools, companies are building sales CRM tools (e.g. Repzo) as well as libraries of professional documents (e.g. Hashdoc). Related to enterprises, in the jobs and recruiting field are sites for general recruitment (e.g. Akhtaboot) as well as temporary home maintenance jobs (e.g. 3oun). Other sectors The bookings category includes reservations for events (e.g. Sajilni) and restaurants (e.g. Reserveout). In design, companies are building platforms for homeowners and designers (eg. Darpedia), creatives (e.g tasmeemME) and crowdsourced interior designs (e.g. eldesigners).  Lastly, in food and grocery, local companies deliver groceries (e.g. iMoneh) and home cooked foods (e.g. Bilforon).

📌Untapped

These are the segments that have many startups in global markets but are not yet fully exploited in the Jordanian market. For example, for a small regional market, many players look to immediately scale outside of Jordan to grow.  The SaaS model of startups lends itself to this type of growth and is one of the main reasons why we’d love to see more come out from Jordan and the region in general. Another interesting untapped sector is travel technology, which potentially includes rewards management software, trip financing, corporate travel apps, flight claim and compensation services, and destination-specific content, to name a few.

Although there are companies that offer some of the functionalities listed in the Untapped box, we are still not seeing single players dominating these categories and it would be interesting to see how they evolve.

Know of other leaders in the Jordanian market? Think you could use one of those untapped services?

Join the discussion at #arzanVCchats !!

Welcome to the fam

Fresh off the press – we’d like to introduce you to Swvl, our latest investment. We participated in the series A round in Swvl and are proud to welcome its founders Mostafa Kandil, Ahmed Sabbah and Mahmoud Nouh to the ArzanVC family.  Swvl is reinventing transportation in Egypt by connecting commuters with private buses and allowing them to reserve and pay for these buses through its mobile app. Swivl-founders What do we like about Swvl? We’ve been in Egypt many times and we’ve seen how commuters (men and women) squeeze in vans and buses with discomfort, hoping to reach their destination safely. Commuters face this daily struggle and they deserve to upgrade their experience! We believe that Swvl’s amazing team and technology are fit to solve this problem through optimization of this chaotic experience.

Family Postcard

C to the Izz-o Trukker.ae is now ISO certified for Quality, Health/safety, and Environmental standards. Because you love airports Tamatem launched a new game, Airport City, so you can build and manage one yourself.
Till next month, keep working… Hasan
To the Kingdom 👑

To the Kingdom 👑

Hey folks,

February has been an action-packed month for us and for our portfolio companies, what a great start for the year! We mentioned in our January newsletter that we are looking at Saudi startups for 2018 and this month’s piece is our take on the market.  Definitely eyeing those SaaS models 👀! Enjoy!

To the kingdom

2017 was a transformative year for Saudi Arabia. The kingdom saw reforms across the board, including an encouraging strategy to focus on technology and innovation as drivers of economic growth.  Along with government institutions, such as the SME Authority, an increasing number of entrepreneurship support organizations, from incubators to training programs are working toward nurturing and pushing the ecosystem forward.  In addition, new trading licenses allowing foreign entrepreneurs to set up businesses will attract more founders and investors to the market going forward. These developments, combined with an inflow of capital, open up great potential for innovation.  For this month’s market map, we took a look at 113 active Saudi tech startups and the sectors they are focusing on. We then identified areas of development or gaps in the market where we would like to see more action. E-commerce is the most prevalent category and the first stop for most startup ecosystems. They include a range of businesses from multiproduct stores (e.g.Ashal) to platforms for buying cars (e.g. car7araj), books (e.g. Rofoof), and many more. As covered in previous maps, the food & grocery space is massive in MENA. In Saudi, this category includes multi-vendor food delivery sites (e.g. Hunger Station), grocery delivery (e.g. Nana Direct), restaurant POS systems (e.g. Foodics) and restaurant review apps (e.g. Qaym). Several companies in on-demand services provide platforms for hiring workers for short terms tasks, such as handymen (e.g. Sakrobe), home cleaners (e.g. Matic), and movers (e.g. Vanoman). Similarly, delivery and logistics includes services to purchase and deliver almost everything (e.g. Mrsool). In the healthcare category, companies provide remote doctor consultations (e.g.Cura), appointment bookings (e.g. Sihatech), and diabetes management (e.g. Sokry). The edtech sector in Saudi has been quite active with startups offering online courses (e.g. Rwaq), online tutoring (e.g. Noon), and learning management systems (e.g. Acadox). Enterprise startups include technologies and services built for businesses. They include recruiting platforms (e.g. Shoghul), employee offers (e.g Walaplus), and accounting software (e.g Qoyod). Other sectors Picking up slowly, the fintech sector includes payment service providers (e.g.Faturah) and crowdfunding (e.g. Mojtm3 Ta2). In travel, companies provide bookings (e.g. Almosafer) and local guides (e.g. Daleeli). The transportation category includes startups providing ride-hailing services (e.g. MyTaxi), as well as GPS tracking for fleet (e.g. SafeRoad), school buses (e.g Hafilaty) and family drivers (e.g.Sawwagy). In the social category, companies are providing social media analytics (e.g. Lucidya) and social networks (e.g. Sarahah).   Media startups are creating online content (e.g. Uturn), audiobooks (e.g. Dhad) and publishing platforms (e.g.Qalam).  Companies in bookings help users discover and book salons (e.g.Spoilee), events (e.g. HalaYalla) and photographers (e.g. Sawerly).  Lastly,technology is a broad category that includes companies doing innovative things such as 3d mapping (e.g. Falcon Viz) and crowd management (e.g. Hoshood). 📌Untapped These are the segments that have many startups in global markets but are not yet exploited in the Saudi market. For example, in oil and gas tech, large players such as Saudi Aramco Ventures have invested in US startups providing drilling-related analytics and IoT.  It would be interesting to see technologically advanced localplayers help the oil and gas industry manage its complexities. Another interesting untapped sector is construction technology, which potentially includes project collaboration software, inventory management, and specialized drones. Although there are companies that offer some of the functionalities listed in the Untapped box, we are still not seeing single players dominating these categories and it would be interesting to see how they evolve. Know of other leaders in the Saudi market? Think you could use one of those untapped services? Join the discussion at #arzanVCchats

Family Postcard

Flippin’ fantastic Tamatem raised $2.5 million to grow their MENA presence, work with international game developers and hire top talent. Armada raised its Pre-Series A investment to grow their team and expand into Saudi and Jordan. Virtual Insanity CoContest launched PillarVR, a new tool to help architects and interior designers transform 360 renders into VR tours for clients. Show ’em what you got Looking to take your FIFA game to the next level? Bidvine, the platform to hire local service professionals, is offering Professional Gaming Coaches to help you learn from the best. Lastly, we wish our readers in Kuwait a happy national and liberation day. Keep it real, Hasan