Gaith Saqer of ArabCrunch, recently featured in The National, has a post up outlining what he thinks needs to happen to create a better scene for tech startups in the Middle East.
In the USA, VCs have been the major driving force behind the tech industry, companies like Yahoo and Google would not be here if there was no VC backing, not to mention that most current web startups are VC baked.
So how is the VC scene in the Region?
From my experience I can say VCs in the region are a joke; they are hard to find, and if they do exist they mostly do not invest! However the region is full of wannabe cashless VCs who offer brokering deals and some advice to few investors here and there.
Nonetheless this seen is changing a bit with initiatives like Intilaq from Bayt.com, KuvCapital, ICT (growth VC) and older VCs like EFG-Hermes' Technology Development Fund - but these are not enough.
So how is the VC scene in the Region?
From my experience I can say VCs in the region are a joke; they are hard to find, and if they do exist they mostly do not invest! However the region is full of wannabe cashless VCs who offer brokering deals and some advice to few investors here and there.
Nonetheless this seen is changing a bit with initiatives like Intilaq from Bayt.com, KuvCapital, ICT (growth VC) and older VCs like EFG-Hermes' Technology Development Fund - but these are not enough.
The New York Times has a article showing
the grim state of venture capital investment
in the US:
Venture capital firms invested only $3 billion in 549 young companies in the first quarter, the lowest investment level since 1997, according to the analysis, done by the National Venture Capital Association and PricewaterhouseCoopers.
The amount invested was down 47 percent from the fourth quarter of 2008 and 61 percent from the first quarter last year.
Though investment in every major technology sector had double-digit declines, investment in clean-technology start-ups, which reached record highs last year, took the steepest dive.
The amount invested was down 47 percent from the fourth quarter of 2008 and 61 percent from the first quarter last year.
Though investment in every major technology sector had double-digit declines, investment in clean-technology start-ups, which reached record highs last year, took the steepest dive.
In response, a post at TechCrunch
says the major decline in venture capital investment is a permanent industry correction
, not the bursting of a short-term bubble:
It fell off a cliff in 2001 and 2002 and it's falling off a cliff now. (More on that in a second.) But there's a difference: Funding levels, returns and the percentage of that money going to new ventures never got nearly as high as they did in the 1999-2000 years. So when we talk about steep drops, we're talking about less of a bubble bursting and more of an industry correcting for more than a decade of scale and liquidity issues.
