Managing Director, Middle East Venture Partners (MEVP)
Managing Partner, Berytech Technology Fund
WALID G. MANSOUR I think Lebanon is a very interesting base. When we speak of venture capital in the Middle East, most of the investments go into the ICT sector and then healthcare and education. The reason is that there is a major ICT opportunity here at the moment, and the amount of capital needed to start an ICT company is relatively small. For $1 million, which is the size of ticket investment we do, you can achieve many things if you are based in Lebanon. There are excellent engineers and marketers here. The cost of business is relatively cheap and you are exposed to the Arab world. Therefore, with $1 million you can build a business that has an extensive reach right from the beginning. There are many opportunities because Lebanon is well positioned to build these companies.
SAMI BEYDOUN Lebanese entrepreneurs are very creative, innovative, well traveled, educated, well connected, and have a pulse on international developments in ICT, with a good sense of business and what is needed in the local market. We have very innovative companies in our portfolio, one example being Instabeat, which produces swimming goggles that show the swimmer’s heart rate while exercising. That is an invention that no one has made before. Another company produces a cardio-diagnostic system that monitors the heartbeat over a period of time, and keeps a close monitor on the patient so that they can be treated as soon as possible if something seems wrong or dangerous. We try to support companies that develop and invent these innovative projects through our company and give them access to funds they may not otherwise have received. The entrepreneur comes to us with a business plan, we analyze it, and then we decide whether or not we’ll invest in it. We aim to support companies that have the potential to be successful not just in Lebanon, but internationally. Once we decide to invest in them, we provide full support so that they have everything they may need. Once a company becomes successful internationally, it creates a positive chain reaction in Lebanon, as well as creating role models for students, entrepreneurs, and businessmen to emulate. Our aim is to help make this dream come true.
WM Kafalat is not only about startups. It is a huge program. It lent $180 million to the agricultural and industrial services sectors. It also developed a program for technology innovation. It can offer businesses $400,000 based purely on a business plan with no guarantors. It has to go through the business plan, screening, and it has to be convinced that you merit a loan. Actually, Kafalat doesn’t give you the loan, but a bank which it guarantees in terms of default. It is encouraging banks to lend to risky projects. I have not seen a program like that anywhere in the world, to be frank. Instead of having the government lending directly to the companies, it is encouraging those whose job it is to lend and removes the risk and prompts them to invest in companies. This is very clever because the bank is still doing its job with due diligence.
SB Lebanese people are very entrepreneurial, resilient, and can work even with a war going on. They take good care of their business, always looking for ways to turn negative situations in the country into positive ones. Lebanon as a country is difficult for business, because long-term plans are impossible, and even five-year business plans are prohibitive because you never know what will happen. Communications are improving in Lebanon, and this country will become increasingly open to the world.