Here are a few fun facts about the Middle East that I bet you haven’t seen on the news:
Did you know that the Amazon of the Middle East, Souq.com, just raised global venture capital at a valuation of over $1 billion, or that the largest food-delivery service in Turkey, Dubai and beyond, Yemeksepeti, was bought by Rocket Internet for more than $600 million this summer? Or that tens of thousands of other tech-enabled startups are in process across the region, 25 percent of which are run by women?
And how many of us would guess that the largest audience for YouTube, relative to its population, is Saudi Arabia? That the largest demographic there is women, and among the largest content categories they are consuming is education, as they are beginning to step up in their societies?
This past year, more people flew through Dubai’s airport than Heathrow, and more than $750 billion in contracts for aircraft across the region were just signed for the expected increase in both passenger and e-commerce growth.
None of this is a surprise to the more than 4,700 young entrepreneurs who gathered in Cairo two weeks ago at RiseUp Egypt 2015. Here are three things that may open your mind to a rising opportunity:
This happened — and for the third year in a row
For two days, from 9 am to midnight, entrepreneurs and investors from Cairo, Egypt more broadly, the Middle East and around the globe convened to network, pitch their ideas and learn in dozens of sessions, fireside chats and smaller gatherings. Subjects were expansive and familiar — branding strategy, better integration with social networks, top tips in fundraising, how to scale, best practices in recruiting talent, lean engineering and more.
Leading-edge innovators from the region shared their learning from their own front lines. Omar Sodoudi, managing director of PayFort, one of the leading payment gateways in the region, discussed the future of financial tech. A panel of four software entrepreneurs debated the future of their ventures focused in the Internet of Things. Ola Doudin and others are building bitcoin enterprises and shared their views on the opportunity for the region in the blockchain. LouLou Khazen, from Lebanon, whose platform connects 5,000 businesses and 80,000 freelancers in more than 100 cities across the world, discussed the future of work.
The key word on everyone’s lips was “opportunity.”
Opportunities in SaaS, clean tech, food innovation, ed tech, the future of music platforms and creativity, gasification, space technology and more shared the stages with country-specific pitches from entrepreneurs in Egypt, the UAE, Jordan, Morocco, Sudan, Tunisia, Africa and Europe, among others, making the case why their ecosystem was outstanding and a pillar of and for the region. Two teen Palestinian/Saudi brothers — on their second startup to use mobile technology to help women have more personal safety — discussed the opportunity for young aspiring entrepreneurs across the region. How tech can help ameliorate the conditions for refugees may have been the most inspirational panel of all.
The key word on everyone’s lips was “opportunity.” RiseUp was the idea of four locally based entrepreneurs and bloggers, Abdelhameed Sharara, Gehad Hussein, Muhammed Mansour and U.K.-born Con O’Donnell. “In 2013, Egypt was at a crossroads,” Sharara, the CEO of RiseUp, told me. “We started hearing that the revolution failed. Little hope was there, and we needed a positive message. Hence, entrepreneurship was not only hopeful, but it was also at a time a lot of startups were really rising, and an ecosystem of support was there.”
They chose as their venue the largest shared workspace in the Arab world, The GrEEK Campus of the old American University of Cairo (AUC), a few yards from Tahrir Square.
“It was the perfect venue,” Sharara continued. “It underscores a sense of being inclusive, neutral and collaborative.”
Ahmed Alfi spent 18 years as an investor in the U.S. before he returned to Cairo to be one of the first venture capitalists there right before the Uprisings. His Sawari Ventures focuses on opportunities in growth capital in the region, and he founded both Flat6Labs — the leading accelerator program there, as well as Abu Dhabi and Beirut, and soon to be in Dubai and Tunisia — and the GrEEK campus, in partnership with the AUC. This year felt different to Alfi. “We have reached the next stage of the development of the startup ecosystem,” he said. “The energy and sophistication of the entrepreneurs and the interest of the investors is increasing at a faster pace, which is why we’re opening in new cities. We are so positive about the growth coming.”
Silicon Valley showed up big-time
Great U.S. tech companies have been coming to the ecosystem for some time — Microsoft, Google, LinkedIn, Facebook and Twitter all made their presence known this year. Uber just committed more than $250 million to the region by necessity — local competitor Careem has been having hyper growth there. Uber also shared cars that drove around Tahrir square as entrepreneurs pitched investors inside of them.
But the new turnout came from the money.
500 Startups has been coming to the region for a couple of years now, hosting its second Geeks on a Plane trip of Silicon Valley to the Middle East around RiseUp. “Look at the numbers,” founder Dave McClure explained to me. “In the Middle East, there are over 350 million Arabic speakers and more than 100 million smartphones — which mean 100 million new digital consumers. Egypt alone is a market of over 90 million, and it’s ready to move. There are lots of entrepreneurs, and a growing number of investors.”
“Globally, Egypt feels like a classic nascent entrepreneurial ecosystem on par with its neighbors in North Africa and the Middle East. There’s a lot of energy and raw talent and abundant opportunity.” — Ben Chasnocha
McClure noted that the Middle East is a less-developed ecosystem than South East Asia, and slightly less than India, where there has been somewhat greater smart-device penetration, customers, comfort with using credit cards online, investors. “But it’s changing rapidly,” McClure said. “And ahead of much of Latin America and Africa. It is ripe with opportunity.” McClure is putting his money where his mouth is. As region lead Hasan Haider told me, 500 Startups has invested in 17 companies across the region and will commit $30 million of its new global efforts here, and another $15 million in Turkey alone.
This was the first time Y Combinator joined the fray on the ground — but it has been engaging with the ecosystem for some time. In fact, it just funded three companies from the Middle East in the upcoming YC class — a record for the accelerator.
“RiseUp was a catalyst to come, as it provided a forum where we could meet a lot of people from many places in MENA efficiently,” new YC partner and former ScribD co-founder Jared Friedman told me. “The right ingredients are here. There’s incredible energy and optimism. In Egypt in particular, there’s a strong base of engineering talent. There are now enough startups that they can learn from each other, and they are building communities like The GrEEK campus in Cairo where the density will accelerate this learning.” Friedman said that there isn’t a lot of investment money yet — but that is a good thing: “It’s forcing the entrepreneurs to be scrappy, and that’s how the best companies are started.”
Ben Casnocha — Silicon Valley entrepreneur, investor and co-author with Reid Hoffman of “The Start-Up of You” — came to Cairo after a few days in Dubai. “I can’t remember the last time I went to an entrepreneurship conference in the States that had near 5,000 people,” he told me. “Globally, Egypt feels like a classic nascent entrepreneurial ecosystem on par with its neighbors in North Africa and the Middle East. There’s a lot of energy and raw talent and abundant opportunity.”
At the same time, Casnocha noted, political uncertainty, a lack of capital, and a dearth of serial entrepreneurs who can angel-invest and mentor the next generation are issues. But in his extensive blog post on his travels, “Lessons and Impressions of Egypt,” he adds: “Entrepreneurial people chase opportunity even when there’s risk — perhaps especially when there’s risk. And the next great opportunity is on the frontier, where billions of people are coming online with smartphones …”
From the East Coast, 1776 was there, hardly a newbie to the region, as it has hosted Challenge Cup events in the region over the last three years. This was, however, Startup Federation manager Garrett Johnson’s first visit. “I certainly felt a sense of solidarity among the hundreds of stakeholders in the ecosystem I met in promoting tech across the region,” he told me. “But perhaps the most exciting aspect of the event for me was the excitement to apply technology to address some of the difficult issues in the region in areas like government, health and energy, to name a few. At one point, I was talking with a Tunisian entrepreneur, and he said, ‘instability generates creativity’ — the entrepreneurs here have a lot of enthusiasm for taking on big problems, and they acknowledge that if they can create solutions here, they can be successful anywhere.”
Working with Flat6Labs on its up-and-coming Challenge Cup Cairo in a few weeks, 1776 will also host events in Beirut, Istanbul and other cities that will send winners to their regional event in Dubai on Feb. 11. Johnson, too, blogged about his Cairo experiences.
Western media was nowhere to be found.
Right before RiseUp in Cairo, another 5,000+ entrepreneurs gathered in Beirut. Imagine if, in 48 hours, 10,000 young people gathered in Beirut and Cairo for two days to plan the future of the Muslim Brotherhood — do we think all the top media would miss it?
Of the 30-plus journalists who were at RiseUp, fewer in Beirut, perhaps three were from the West. Among the most comprehensive overviews is one by Elizabeth MacBride in Forbes, “Why Microsoft, Uber and 500 Startups Went to Downtown Cairo.” Beyond that and a few quick posts, nada.
I ran WashingtonPost.Newsweek Interactive for several years, and have written extensively across most major news channels, and I believe a few factors are at play.
Imagine if, in 48 hours, 10,000 young people gathered in Beirut and Cairo for two days to plan the future of the Muslim Brotherhood — do you think all the top media would miss it?
One is narrative bias — we all, even hard-nosed journalists, get captured by significant stories and tend to pile onto them. Something hopeful and at scale in the Middle East is hard to digest right now. The fact is, the Middle East — like most growth markets — are tough neighborhoods navigating significant political, economic and societal changes. The point is not that this toughness is wrong, but that the ramifications of near-universal access to technology is of significant weight, also, and may define the future of many societies as, by the end of the decade, billions will be connected who are not today.
A second observation is that news has been historically split — “policy,” “politics,” “business,” “technology” and “foreign” are separate beats whose editors are often following their own narratives of the day. This kind of story of Cairo is a hybrid of all of them, and the media neither knows how to cover it well nor where to put it. This is remarkable at one level, as Cairo reflects the changing of the worlds more broadly, as enormous shifts to problem solving and the fight for political, cultural and economic voices are bubbling bottom-up because progressively everyone has technology to change their dynamics. The lines among top-down government institutions and bottom-up problem solvers have never been more blurred.
“Try telling that to my boss,” one major television news producer told me. “It is near impossible to get foreign stories in front of American audiences, and how can we not cover ISIS if everyone else is? And do you think advertisers care?”
The entrepreneurs I talk to just shrug, however. If they aren’t getting their due in the press, they are building recognition where they care most — their users, customers, investors and their societies overall. They, like we, don’t know what the future will bring, but they are hell-bent on building it. They cannot tell you what Syria will look like in a year, or what ramifications a slowing China will have in three. They do know that by the end of the decade there will be more smart devices and not less, and ever- and rapidly increasing software to solve almost any problem they see.
And they know that there is no going back.
Christopher M. Schroeder is a U.S.-based Internet/media entrepreneur and venture investor. His book, “Startup Rising: The Entrepreneurial Revolution Remaking the Middle East,” is the first to document the rise of innovation there, and its new edition includes his experience in Iran. Reach him @cmschroed.
This article originally appeared on Recode.net.