The backer of the Middle East's largest internet venture capital firm is establishing a company to fund investment in mobile technology in the region. Accelerator Technology Holdings, a Jordanian firm, aims to complete an initial US$10 million (Dh36.7m) fundraising drive next week, after which it will hire a management team. Accelerator has funded a number of the Arab world's highest-profile internet startups through its venture fund, IV Holdings.
Fawaz Zu'bi, the chief executive of Accelerator, said: "We have already made investments and are looking at deepening our involvement in the mobile platform in areas like security and authentication. "This is because we feel that financial transactions over mobile platforms will become very prevalent in this region in the future." All of the Middle East's big mobile network operators have launched mobile payment initiatives in the past year.
In the UAE, Etisalat and du are testing mobile payments through technology known as near-field communications (NFC), and both are looking to enter the multibillion-dollar remittances market. A number of successful mobile money transfer systems in Africa have shown many expatriates prefer them to using banks or money transfer agencies. The technology research firm Gartner said in a recent report that mobile payments were increasing globally by 70 per cent a year. By 2012, mobile payments would become a part of the mobile mainstream, used by almost 200 million people, Gartner said.
Mr Zu'bi, a former Jordanian minister of information and communications technology, was one of the leaders of the kingdom's economic and commercial reforms at the beginning of the decade. Those reforms are credited with aiding the development of Amman's lively community of internet and technology startups. IV Holdings has invested in prominent regional internet businesses such as Jeeran, a community for sharing user-generated content, and Content Syndicate, an online media marketplace based in Dubai.
Many of its recent investments have been followed by similar investments from Intel Capital, one of the world's largest technology funds. The new company will operate as a mixture of venture capitalist and commercial investor, working with foreign companies to bring new mobile technologies to the region. It has already spoken with businesses in the UK, Switzerland and Norway, with a view to bringing their products to the Middle East.
While Mr Zu'bi has been a vocal supporter of the region's technology sector and particularly its entrepreneurs, he said it remained a challenge to convince wealthy investors and funds in the Middle East to put money into the industry. Huge returns on speculative investment in property and stocks have made relatively high-risk investments in new technology less appealing. "We try to be selective about our investors because we want people who understand that technology is a long-term play, not a short-term one," Mr Zu'bi said.
"Unfortunately, quite a few people do not understand this because of what has happened in the region in the last five years. People have made huge bundles and they say, 'Why should we invest in something that gives us a nice return in 10 years, not now?'" firstname.lastname@example.org