Most technology investors are hunting future “unicorns”, as start-up ventures valued at US$1 billion or more are known. But with millions of businesses launching each year, these are proving ever elusive.
Step in one new fund aimed at Middle Eastern investors, which – while certainly not promising to scout out the next Facebook – does offer regional investors access to “cherry-picked” US start-ups.
The Arab Angel Fund was launched earlier this year by Kyle Hendrick, who until April worked as a commercial specialist at the UAE embassy in Washington DC.
Most start-ups do, of course, fail. But Mr Hendrick says his fund’s policy of only investing in tech businesses alongside established venture capital (VC) firms does at least mitigate some of the risk.
“We’re giving proprietary access to deals that US venture firms are taking lead positions in,” says Mr Hendrick, who is a general partner of the Arab Angel Fund.
“Co-investing with these VCs is really cherry-picking some of the top deals. Because if they’re turning down thousands of start-ups and investing maybe in 50 or 100 a year, they’ve gone through some serious hurdles.”
The Arab Angel Fund, which is registered in the Cayman Islands, is capped at $25 million and has so far raised about $11m, primarily from the Arabian Gulf. It has struck at least 14 deals to date – although Mr Hendrick says he cannot yet disclose details – and plans to invest in a total of 150 to 175 start-ups over three years. The vast majority will be US-based, with the fund specifically targeting early-stage start-ups in places such as Silicon Valley, Boston and New York.
Mr Hendrick says the fund has already attracted at least 38 investors from countries including the UAE, Saudi Arabia and Kuwait. Several top executives and two UAE ministers have invested in the fund, he says, although he could not give names.
The maximum an individual can put in is $1m, and the minimum investment is $100,000 – something Mr Hendrick says was a relatively low threshold.
“Venture returns can happen throughout the life of the fund but we generally expect to see returns within the first three to five years,” he says.
“For a lot of these investors – I would say about 95 per cent of cases that I’ve seen – this is their first foray into this asset class.”
Mr Hendrick says it was his experience working in the trade and commercial office at the UAE embassy that made him realise there was a gap in the connectivity between US start-ups and “everyday” Middle East investors.
“Family offices and individual investors really didn’t have a vehicle that was giving exposure to the top-tier US venture funds,” he says.
While there is nothing stopping Arab investors pursuing US start-ups through individual investments or other more established US funds, Mr Hendrick says the fact that the fund will co-invest alongside multiple VC companies – he name-checked the likes of New Enterprise Associates and the notable angel investor Mark Cuban – was a major draw.
“There has to be a notable VC in the US that has taken a lead position before we can invest. So we’ll never be the first money in on a start-up. And that’s really a risk-mitigation tactic,” he said.
Another aim of the fund is to help some of the start-ups it invests in enter the Middle East market, building on the fund’s connections in the region and the prominent UAE business people on the Arab Angel Fund investment committee.
While one UAE investment expert says there would probably be strong demand for an investment vehicle such as this, he strongly cautioned against individuals putting their money in such an asset class.
“Shiny new ideas and exciting tech investments sound great and will likely attract investors,” says Sam Instone, the chief executive of the fee-based financial advisory AES International, which has an office in Dubai. “[But] everyday investors shouldn’t be speculating in angel investing … Evidence suggests that most normal investors can get better returns net of fees and charges by investing in index funds.”
Mr Hendrick acknowledges that venture capital was typically riskier, and the Arab Angel Fund is not suited to all investors. But he says that, in a wide portfolio of start-ups, a handful of star-performing ventures can compensate for the many that, inevitably, fail.
“Risk is generally frowned upon in the Middle East. So it’s sort of a changing of mindsets. Yes there’s going to be some failure, but the success within this fund is going to make up for that,” he adds.
So the odds of a business success may still be stacked against you – but so it goes when you’re scouting for start-up unicorns.
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COMPANY PROFILE
Name: Xpanceo
Started: 2018
Founders: Roman Axelrod, Valentyn Volkov
Based: Dubai, UAE
Industry: Smart contact lenses, augmented/virtual reality
Funding: $40 million
Investor: Opportunity Venture (Asia)
Company profile
Company name: Ogram
Started: 2017
Founders: Karim Kouatly and Shafiq Khartabil
Based: Dubai, UAE
Industry: On-demand staffing
Number of employees: 50
Funding: More than $4 million
Funding round: Series A
Investors: Global Ventures, Aditum and Oraseya Capital
UAE squad
Men's draw: Victor Scvortov and Khalifa Al Hosani, (both 73 kilograms), Sergiu Toma and Mihail Marchitan (90kg), Ivan Remarenco (100kg), Ahmed Al Naqbi (60kg), Musabah Al Shamsi and Ahmed Al Hosani (66kg)
Women’s draw: Maitha Al Neyadi (57kg)
The Killer
Director: David Fincher
Stars: Michael Fassbender, Tilda Swinton, Charles Parnell
Rating: 4/5
FULL FIGHT CARD
Featherweight Bout:
Abdullah Al Qahtani v Taha Bendaoud
Bantamweight Bout:
Ali Taleb v Nawras Abzakh
Bantamweight Bout:
Xavier Alaoui v Rachid El Hazoume
Featherweight Bout:
Islam Reda v Adam Meskini
Bantamweight Bout:
Tariq Ismail v Jalal Al Daaja
Bantamweight Bout:
Elias Boudegzdame v Hassan Mandour
Amateur Female Atomweight Bout:
Hattan Al Saif v Nada Faheem
Featherweight Bout:
Maraoune Bellagouit v Motaz Askar
Featherweight Bout:
Ahmed Tarek v Abdelrahman Alhyasat
Showcase Featherweight Bout:
Mido Mohamed v Yazeed Hasanain
Showcase Flyweight Bout:
Malik Basahel v Harsh Pandya
UAE currency: the story behind the money in your pockets
Zodi & Tehu: Princes Of The Desert
Director: Eric Barbier
Starring: Youssef Hajdi, Nadia Benzakour, Yasser Drief
Rating: 4/5
Tips for job-seekers
- Do not submit your application through the Easy Apply button on LinkedIn. Employers receive between 600 and 800 replies for each job advert on the platform. If you are the right fit for a job, connect to a relevant person in the company on LinkedIn and send them a direct message.
- Make sure you are an exact fit for the job advertised. If you are an HR manager with five years’ experience in retail and the job requires a similar candidate with five years’ experience in consumer, you should apply. But if you have no experience in HR, do not apply for the job.
David Mackenzie, founder of recruitment agency Mackenzie Jones Middle East
The design
The protective shell is covered in solar panels to make use of light and produce energy. This will drastically reduce energy loss.
More than 80 per cent of the energy consumed by the French pavilion will be produced by the sun.
The architecture will control light sources to provide a highly insulated and airtight building.
The forecourt is protected from the sun and the plants will refresh the inner spaces.
A micro water treatment plant will recycle used water to supply the irrigation for the plants and to flush the toilets. This will reduce the pavilion’s need for fresh water by 30 per cent.
Energy-saving equipment will be used for all lighting and projections.
Beyond its use for the expo, the pavilion will be easy to dismantle and reuse the material.
Some elements of the metal frame can be prefabricated in a factory.
From architects to sound technicians and construction companies, a group of experts from 10 companies have created the pavilion.
Work will begin in May; the first stone will be laid in Dubai in the second quarter of 2019.
Construction of the pavilion will take 17 months from May 2019 to September 2020.
Profile of Foodics
Founders: Ahmad AlZaini and Mosab AlOthmani
Based: Riyadh
Sector: Software
Employees: 150
Amount raised: $8m through seed and Series A - Series B raise ongoing
Funders: Raed Advanced Investment Co, Al-Riyadh Al Walid Investment Co, 500 Falcons, SWM Investment, AlShoaibah SPV, Faith Capital, Technology Investments Co, Savour Holding, Future Resources, Derayah Custody Co.
Fourth Arab Economic and Social Development Summit
As he spoke, Mr Aboul Gheit repeatedly referred to the need to tackle issues affecting the welfare of people across the region both in terms of preventing conflict and in pushing development.
Lebanon is scheduled to host the fourth Arab Economic and Social Development Summit in January that will see regional leaders gather to tackle the challenges facing the Middle East. The last such summit was held in 2013. Assistant Secretary-General Hossam Zaki told The National that the Beirut Summit “will be an opportunity for Arab leaders to discuss solely economic and social issues, the conference will not focus on political concerns such as Palestine, Syria or Libya". He added that its slogan will be “the individual is at the heart of development”, adding that it will focus on all elements of human capital.
Chris Jordan on Sanchit
Chris Jordan insists Sanchit Sharma will make an impact on the ILT20, despite him starting the campaign on Gulf Giants' bench.
The young UAE seamer was an instant success for the side last season, and remained part of the XI as they claimed the title.
He has yet to feature this term as the Giants have preferred Aayan Khan and Usman Khan as their two UAE players so far.
However, England quick Jordan is sure his young colleague will have a role to play at some point.
"Me and Sanchit have a great relationship from last season," Jordan said.
"Whenever I am working with more inexperienced guys, I take pleasure in sharing as much as possible.
"I know what it was like when I was younger and learning off senior players.
"Last season Sanchit kick-started our season in Abu Dhabi with a brilliant man-of-the-match performance.
"Coming into this one, I have seen a lot of improvement. The focus he is showing will only stand him in good stead."
Company Profile
Name: Direct Debit System
Started: Sept 2017
Based: UAE with a subsidiary in the UK
Industry: FinTech
Funding: Undisclosed
Investors: Elaine Jones
Number of employees: 8
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Results
6.30pm: Mazrat Al Ruwayah Group Two (PA) US$55,000 (Dirt) 1,600m; Winner: Rasi, Harry Bentley (jockey), Sulaiman Al Ghunaimi (trainer).
7.05pm: Meydan Trophy (TB) $100,000 (Turf) 1,900m; Winner: Ya Hayati, William Buick, Charlie Appleby.
7.40pm: Handicap (TB) $135,000 (D) 1,200m; Winner: Bochart, Richard Mullen, Satish Seemar.
8.15pm: Balanchine Group Two (TB) $250,000 (T) 1,800m; Winner: Magic Lily, William Buick, Charlie Appleby.
8.50pm: Handicap (TB) $135,000 (T) 1,000m; Winner: Waady, Jim Crowley, Doug Watson.
9.25pm: Firebreak Stakes Group Three (TB) $200,000 (D) 1,600m; Winner: Capezzano, Mickael Barzalona, Salem bin Ghadayer.
10pm: Handicap (TB) $175,000 (T) 2,410m; Winner: Eynhallow, Mickael Barzalona, Charlie Appleby.
ALRAWABI SCHOOL FOR GIRLS
Creator: Tima Shomali
Starring: Tara Abboud, Kira Yaghnam, Tara Atalla
Rating: 4/5
Seven Winters in Tehran
Director : Steffi Niederzoll
Starring: Reyhaneh Jabbari, Shole Pakravan, Zar Amir Ebrahimi
Rating: 4/5
The specs: Aston Martin DB11 V8 vs Ferrari GTC4Lusso T
Price, base: Dh840,000; Dh120,000
Engine: 4.0L V8 twin-turbo; 3.9L V8 turbo
Transmission: Eight-speed automatic; seven-speed automatic
Power: 509hp @ 6,000rpm; 601hp @ 7,500rpm
Torque: 695Nm @ 2,000rpm; 760Nm @ 3,000rpm
Fuel economy, combined: 9.9L / 100km; 11.6L / 100km
MEDIEVIL (1998)
Developer: SCE Studio Cambridge
Publisher: Sony Computer Entertainment
Console: PlayStation, PlayStation 4 and 5
Rating: 3.5/5
Boston Strangler
Director: Matt Ruskin
Starring: Keira Knightley, Carrie Coon, Alessandro Nivola
Rating: 3/5
The Uefa Awards winners
Uefa Men's Player of the Year: Virgil van Dijk (Liverpool)
Uefa Women's Player of the Year: Lucy Bronze (Lyon)
Best players of the 2018/19 Uefa Champions League
Goalkeeper: Alisson (Liverpool)
Defender: Virgil van Dijk (Liverpool)
Midfielder: Frenkie de Jong (Ajax)
Forward: Lionel Messi (Barcelona)
Uefa President's Award: Eric Cantona
Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
RESULTS
Time; race; prize; distance
4pm: Maiden; (D) Dh150,000; 1,200m
Winner: General Line, Xavier Ziani (jockey), Omar Daraj (trainer)
4.35pm: Maiden (T); Dh150,000; 1,600m
Winner: Travis County, Adrie de Vries, Ismail Mohammed
5.10pm: Handicap (D); Dh175,000; 1,200m
Winner: Scrutineer, Tadhg O’Shea, Ali Rashid Al Raihe
5.45pm: Maiden (D); Dh150,000; 1,600m
Winner: Yulong Warrior, Richard Mullen, Satish Seemar
6.20pm: Maiden (D); Dh150,000; 1,600m
Winner: Ejaaby, Jim Crowley, Doug Watson
6.55pm: Handicap (D); Dh160,000; 1,600m
Winner: Storyboard, Richard Mullen, Satish Seemar
7.30pm: Handicap (D); Dh150,000; 2,200m
Winner: Grand Dauphin, Gerald Mosse, Ahmed Al Shemaili
8.05pm: Handicap (T); Dh190,000; 1,800m
Winner: Good Trip, Tadhg O’Shea, Ali Rashid Al Raihe
EMIRATES'S REVISED A350 DEPLOYMENT SCHEDULE
Edinburgh: November 4 (unchanged)
Bahrain: November 15 (from September 15); second daily service from January 1
Kuwait: November 15 (from September 16)
Mumbai: January 1 (from October 27)
Ahmedabad: January 1 (from October 27)
Colombo: January 2 (from January 1)
Muscat: March 1 (from December 1)
Lyon: March 1 (from December 1)
Bologna: March 1 (from December 1)
Source: Emirates
Company profile
Company: Zywa
Started: 2021
Founders: Nuha Hashem and Alok Kumar
Based: UAE
Industry: FinTech
Funding size: $3m
Company valuation: $30m
TWISTERS
Director:+Lee+Isaac+Chung
Starring:+Glen+Powell,+Daisy+Edgar-Jones,+Anthony+Ramos
Rating:+2.5/5
Secret Nation: The Hidden Armenians of Turkey
Avedis Hadjian, (IB Tauris)
The five pillars of Islam