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ACCELERATING THE FUTURE

Flat6Labs Appoints Yehia Houry as Chief Programs Officer

Cairo, Egypt – 26 September 2022

Flat6Labs, the MENA region’s leading seed and early-stage venture company, announced today the appointment of Yehia Houry as Chief Programs Officer. His appointment and move to Egypt follow a successful five-year journey as the Managing Director of Flat6Labs in Tunisia.

Mr. Houry spearheaded the launch of Flat6Labs and its operation in Tunisia during the past few years. In his new capacity, he will work as part of the executive team on planning and implementing new programs and products for Flat6Labs globally.

“It is with great pleasure that we welcome Yehia to his new position, with confidence that he will continue to play a vital role leading Flat6Labs’ next chapter of growth and success in his capacity as CPO.” said Ramez El-Serafy, CEO of Flat6Labs.

“Flat6Labs’ success has always been rooted in putting entrepreneurs at the center of our efforts. I look forward to working alongside the executive team as well as colleagues at headquarters and across country offices to expand our operations and grow our impact globally.” said Yehia Houry, CPO of Flat6Labs.

Yehia joined Flat6Labs in 2017 with more than 15 years of experience in venture capital investment and tech-driven startup entrepreneur support. Prior to Flat6Labs, he was leading tech-driven initiatives for youth employability and entrepreneurship at a regional organization working across the Arab world. Throughout his career, he notably held various roles in research, multilateral organizations in Africa,Asia and the Middle East before joining the World Bank’s Microfinance division. As an Acumen Fund Fellow, he was an advisor for a large-scale health-tech company in India. Yehia holds a BSc in Computer Science from McGill University in Canada and a Masters in International Affairs from Columbia University in New York.

Organon and Flat6Labs Announce Winners of MENA Region’s First Digital-Health FemTech Accelerator

Omgyno’ founded by Doreen Toutikian and Elisabeth Milini in Greece and Lebanon, ‘Siira’ founded by Sandra Salame in Lebanon, and ‘Maternally’ founded by Yasmin El Mouallem in the UAE, were announced the winners of the region’s first digital-health FemTech accelerator, marking the culmination of the program that was launched by Organon and Flat6Labs at Expo 2020 to advance women’s health
The winners were announced at the ‘Demo Day’ event in Cairo Egypt, which saw the participants pitch their ideas to a panel of eminent judges from across the women’s health world

Cairo, Egypt, 13 September 2022 – Omgyno founded by Doreen Toutikian and Elisabeth Milini in Greece and Lebanon, Siira founded by Sandra Salame in Lebanon, and Maternally founded by Yasmin El Mouallem in the UAE were crowned the winners of the MENA region’s first digital-health FemTech Accelerator Program. Launched in October 2021 during Expo 2020 by partners Organon and Flat6Labs to address unmet women’s healthcare needs, the winners were announced after the program’s ten finalists from across Egypt, Lebanon, UAE, Bahrain, Morocco, and Jordan pitched their ideas to a panel of judges and an audience of prospective investors.

The pitches took place at the ‘Demo Day’ event, hosted at the GrEEK Campus. The panel of judges selecting the final winners consisted of Dina El Shenoufy, Chief Investment Officer at Flat6Labs; Ramy Koussa, Associate Vice President of MENAT at Organon; Dr. Amr Alashkar, Chief Information Officer at Cleopatra Hospital Group; Jailan El Messeiry, Group Digital Marketing & Communications Manager at UN Women; and Frederika Meijer, Country Representative at UNFPA.

 

Omgyno, the start-up that won first place, is a FemTech platform redesigning the gynecological experience. After identifying the causes behind gaps in testing for the potentially cancer-causing HPV virus, including fear of judgment and accessibility, the two entrepreneurs worked on a user-centered platform offering home testing and telehealth, tailored to promote self-care and privacy.
Siira, the start-up that sat in second place, developed a mental health platform designed to accompany women in their daily struggles related to parenting, relationships and work. Conscious that only 30%-35% of people with mental health problems seek professional support, Sandra Salame’s start-up is focused on addressing this gap.
Globally, one in five women experience mental health issues during pregnancy, and/or following birth. Seeking to plug this gap, Maternally, which was adjudged third runner-up, is an online platform being developed to cater to women’s specific mental health needs during their motherhood journey.

“At Organon, we understand that prioritizing women’s health is tied to long-term productivity and resilient societies. That’s why, as part of our ESG Economic, Social and Governance-driven purpose to achieve her promise, we are committed to investing in programs, partnerships, initiatives, and ideas that work to fill that gap. The best ideas for addressing these gaps truly come from the women who experience these challenges first-hand,” said Ramy Koussa, AVP MENAT, Organon.

“With vast unmet medical needs, today, women across the MENA region cannot fully participate in the economy on account of a lack of adequate healthcare. Shockingly, the region loses $575 billion yearly due to the lack of female economic participation,” he added.

Dina El Shenoufy, Chief Investment Officer at Flat6Labs, commented, “At Flat6Labs, we have been delighted to participate in and support this female empowerment initiative. Participating start-ups have received over 65 hours of training sessions led by top local and international advisors, and 27 hours of one-on-one coaching sessions, helping them gain a solid understanding of the FemTech market, connect with key leaders and grow their networks.”
“Our partnership with Organon not only works to redress many of the gender inequities we see in the start-up world, particularly around access to funding, but also to support better women’s health. We know that female health and economic empowerment go hand in hand. By investing in the women in our communities and supporting greater gender equality, everyone across our societies benefits,” she added.

The FemTech accelerator program, announced shortly after Organon’s launch in the MENAT region, is the first regional Environmental, Social, Governance (ESG) initiative by Organon that is committed to addressing unmet women’s needs. Inspired by Organon’s purpose to help women and girls achieve their promise through better health, the program was designed to support female entrepreneurship and digital health start-ups that advance women’s health by providing support to build products, test market fit and improve business models, as well as access to investors.

Is the Global Femtech Industry Empowered Enough?

Women’s healthcare looks uncertain in the future. But, the femtech industry is still developing and you’ll find out why.

The lack of research into the health of women led to the need for femtech. Despite the fact that women spend $500 billion on medical costs each year, just 4% of research and development funding was allocated to problems that directly affect women. Cultural taboos that create barriers for women to get treatable illnesses may be directly responsible for this lack of investment in women’s health.

By the end of 2022, the Global Femtech Market is anticipated to be worth USD 28.77 billion. “You know a topic is hot when VC’s money goes into it once they see opportunities in a field,” mentioned Hana Besbes, the Investment Manager at Heal Capital in Germany.

The largest funders of health tech businesses that concentrate on issues affecting women’s health have been early-stage investors. Since 2015, VC funding for the Femtech industry has increased threefold, rising from just over $600 million to about $1.9 billion in 2017, according to CNBC.

In this post, we will be tackling the opportunities, challenges, and recommendations that were mentioned in our panel talk “The Current State of FemTech Worldwide” in partnership with Organon, which took place on August 10, 2022.

 

Opportunities that could lead to growth in the Femtech industry:

Turning startups from offline to online has its upside due to better visibility, constant accessibility, and brand development. “The next wave of femtech is what Sophie is trying to do here with Nabta Health, in how we can radically change the standard of care of those women,” emphasized Hana.

Companies specializing in gynecology, fertility, and pregnancy have received the most funding. Infertility was identified by the WHO as a disease and a public health issue, and its rate is steadily rising according to CNBC. With the amount of data and studies done on that, it’s been spoken about and therefore investors have an interest in helping startups tackle this issue through funding.

Challenges that professionals face in the Femtech industry:

Speaking of data and studies, there isn’t enough R&D that could help with clinical support. Women are underrepresented in clinical trials, and their concerns have been disregarded in medical device development according to MedCity News. “Deep tech innovation”, as Hanna calls it, is needed. She is looking for a startup that aims to create the biggest bio-market platform for women’s reproductive health. There are many things that could be done once this is achieved.

“We need more data… from their genetic data to their medication, reactions, compliances, and clinical pathways in order to comprehensively improve women’s health outcomes” shared Sophie Smith, CEO and Founder of Nabta Health.

Another challenge is that male investors lack adequate knowledge related to the femtech industry and its impact. With more awareness of the impact of Femtech products, investors, researchers, and business owners have a real opportunity to support this rising innovation trend and usher in a new era in women’s health.

“We need a lot more support from people who understand the need and value proposition of femtech companies at the early stages” shared Sophie.

If you want to close the gap in the Femtech industry, awareness is a crucial first step, but the problem goes far more profound. The industry needs further development in terms of investment in the R&D sector to access more resourceful data which is critical for any startup’s innovative tech product and service. Farah Kabir, Co-Founder of HANX, expressed that founders should discuss their ideas with as many people as possible as early on as they can so they can tweak and produce more wonderful products

If you’re a startup founder, find out what insights our panelists had to share based on their own entrepreneurial journeys:

Nour Emam, the founder and CEO of Mother Being shares this advice since she went through this hiccup of perfecting her service to avoid failing again. So, she decided to lift her business up by expanding and spreading more awareness about what her business is about with partnerships and workshops.

“Move fast even if you fail quickly so you can try again.” shared Nour.

Echoing what Nour said, Eric Dy, the Co-Founder and CEO of BloomLife, adds that a lot of founders choose to start by focusing on the product, which is obviously crucial, but don’t lose sight of your commercial plan. He emphasized this point so founders can remember to understand their market and any potential stakeholders who may need to support their efforts throughout their growth journey.

“You may have an amazing product that a patient might love and support, but without doctors on board or a way for people to pay for it as they normally would, then you’re going to have a hard time. Understand the full pictures and not get super obsessed with just the product ” mentions Eric.

Don’t miss our upcoming Femtech Accelerator Demo Day, a part of our Femtech Accelerator Program in partnership with Organon. It’s the first of its kind in the MENA region where you can have the opportunity to learn more about the industry and the 9 global startups that will pitch their innovative products in various sectors.

You can tune in to the Demo Day which will be live streamed on September 12, 2022 here.

Connect with us on Instagram, Facebook, Twitter, and LinkedIn for more information.

Written by: Dana El Melki

Flat6Labs Celebrates Second Demo Day in Amman

Amman, Jordan – September 6, 2022 Flat6Labs, a leading seed and early-stage venture capital firm in the MENA region, celebrated its second Demo Day in Jordan, showcasing the seven graduated startups of the Amman Seed Program’s second cohort. The event took place on September 5, at the Four Seasons Hotel Amman.

During the event, the seven participating startups—which included Arab Therapy, Bloom Cart, Ipass, Khareta, QuiqClaim, Shop4me, and Sukoon—presented their innovative products and solutions in front of a large audience. The graduated startups cover a wide variety of industries and sectors, including Health and Wellness Tech, E-commerce, RealTech, FinTech, and Cyber Security.

Commenting on the occasion, Flat6Labs’ General Manager, Rasha Manna, said, “Once again, we are extremely proud to see our participants showcase the culmination of their tremendous effort, commitment, and resilience—not only during the last four months of the program but through all the hard work that led them to this point.  It’s incredible to see how our seed program has developed and expanded in our second cycle. This kind of growth—and the individual achievements of our participants—encourages us to continue seeking out new, promising entrepreneurs from the local community, so that we can equip them with knowledge, skills, and tools that will support their long-term success.”

The second cycle of Flat6Labs’ Seed Program kicked off on May 8th, 2022, bringing top-notch international consultants, coaches, and mentors to work closely with each of the startup teams, empowering them to achieve their business goals. The program facilitated networking opportunities to help the startups build and grow their networks and connect to global leaders. Over the past four months, the seven startup teams have been working on growing their customer base, refining their offerings, expanding to new markets, and building strategic partnerships.

About the Seed Program Startups

Arab Therapy: A web platform and mobile app offering digital mental health services and consultations in the Arabic language by highly qualified Arab therapists.
Bloom Cart: A try-before-you-buy software that automates returns for e-commerce websites in the MENA region, while integrating with local logistics companies, couriers, and payment gateways
Ipass: An onboarding solution provider that aggregates world-class anti-fraud tools on one platform, allowing businesses to eliminate the risk of fraud while guaranteeing a high-quality client experience
Khareta: A data-driven real estate marketplace that helps both buyers and sellers complete transactions faster and with greater confidence
QuiqClaim: A fintech startup offering peer-to-peer financing for the medical insurance industry, bridging the liquidity gap for healthcare providers
Shop4me: An online B2B marketplace that simplifies the complex procurement process by helping businesses find, order, and receive supplies from prequalified suppliers
Sukoon: A mobile mindfulness app that offers users tools and techniques for mental, emotional, and spiritual wellbeing, in the form of Arabic audio recordings designed to enable personal transformation and growth

Flat6Labs and SANAD Entrepreneurship Academy Launch Agritech Accelerator Program to Support Agri-digital Start-ups Across Egypt

Flat6labs, the region’s leading seed and early-stage venture capital firm, in collaboration with SANAD Entrepreneurship Academy launched an agritech accelerator program to assist 10 to 12 startups in each cycle to improve their business models, product development, customer relationships, marketing plans, and financial management. The collaboration marks the beginning of Flat6Labs’ mission to support emerging businesses in the agri-food, food security, and rural development sectors while highlighting the value of the agritech industry in Egypt.

The agri-tech program will give startups access to capital, to grow faster and efficiently, encouraging the development of technologies that make the agriculture industry sustainable, safe, and environmentally friendly. These technologies optimize service quality in the agriculture industry, by facilitating data collection and analysis to quantify performances, while limiting overprice of products/services.

‘’With digital transformation progressing rapidly across industries, and the agriculture industry being a core pillar of the Egyptian economy, the need to digitize the agriculture industry has increased dramatically. We are glad to launch this agritech accelerator program in collaboration with the SANAD Entrepreneurship Academy, as it will serve this need by supporting the startups that provide innovative technologies in the agriculture sector and will contribute to the sustainable growth of the Egyptian economy.” stated Hassan Mansi, Flat6Labs Head of Ecosystem Development Programs.

Empowering and promoting Egypt’s Agri-digital sector would result in advancements in automated machinery and robotics, increasing the efficiency of agricultural productions by precisely locating nutrient availability, checking for diseases, predicting them, and many other useful facilities.

Kim Reichel, Chairperson of the SANAD Technical Assistance Facility Committee said, ”We are very much looking forward to our cooperation with Flat6Labs as they have shown strong commitment to supporting innovative and technology-driven entrepreneurs across MENA. Together, we will create a positive impact by providing targeted support and enabling business owners to thrive. We believe that focusing on the agricultural sector, and specifically agri-tech, is vital in these challenging times and will contribute to increased food security across the region.”

 

Flat6Labs Egypt and SANAD Entrepreneurship Academy will continue to support bright, passionate, and tech-driven entrepreneurs in Egypt, by providing funding, technical assistance, and networking opportunities across the country and beyond. The venture capital firm will continue to be a cornerstone of the digital transformation of the Egyptian economy building successful job-creating startups that contribute to the economic development in Egypt.

Flat6Labs invests a total of $805,000 in seven Jordanian startups

Amman, Jordan – June 26, 2022 Flat6Labs—the MENA region’s leading seed- and early-stage venture capital firm, currently running the most renowned startup programs in the region—has recently announced that it is investing in seven new Jordanian startups, as part of the second cycle of its funding program, which was launched last June.

By funding startups across the MENA region—including in Jordan—Flat6Labs aims to support entrepreneurs and new businesses as they work to compete on both a local and global scale. The venture capital firm specifically targets startups in innovation-based and knowledge-driven sectors, such as information and communication technologies, software solutions, education, healthcare, digital content and games, hardware, electronics, manufacturing solutions, renewable energy, agricultural solutions, big data and analytics, fintech and payment solutions, media, and entertainment. 

Flat6Labs will be providing each selected startup in the current cycle with an investment of $115,000, including an initial capital injection of $65,000. In cooperation with an array of elite coaches and mentors, the venture capital firm will also provide these startups with a four-month training curriculum that includes a variety of workshops and mentoring sessions designed to cover all aspects of business development. Flat6Labs will additionally provide the participating startups with workspaces, marketing and legal support, and the opportunity to benefit from the firm’s regional network of partners and investors—along with the possibility to potentially receive subsequent financing of up to $170,000.

Commenting on the firm’s latest program cycle, Rasha Manna, General Manager of Flat6Labs Jordan, said, “At Flat6Labs, we are immensely proud of what we have achieved since the commencement of our operations in Jordan. In the first cycle of the program, we invested in five Jordanian startups, and the success of that inaugural cycle has resulted in an increase in demand and visibility for our program, allowing us to expand our investments in the second cycle. Ultimately, by connecting with and supporting local entrepreneurs, it is our objective to have a positive impact on Jordan’s economy and society as a whole—in particular, by diversifying the local economic landscape, creating new job opportunities, and helping develop a sea of success stories that will further encourage local entrepreneurs to pursue their ideas and visions. At the same time, we hope that our own achievements and those of our startups will set an example for other investors and venture capital firms, further highlighting the Kingdom’s potential for investments.”

 

The list of companies in the second cycle includes:

Arab Therapy
A platform that specializes in providing high-quality mental health services and counseling through psychotherapy sessions carried out by a group of highly qualified specialists.

Bloom
A company that bridges the gap between physical and online shopping through the “try-before-you-buy” software model, with the aim of automating the returns process for merchants and giving them complete control over their management.

Kharta
A data driven real-estate marketplace that helps both buyers and sellers complete the transaction faster and with more confidence.

Quiq Claim
A FinTech peer-to-peer settlement and investments platform, catering to the Medical Insurance industry.

iPass
A one-stop shop for worldwide identity verification solutions utilizing a deep pixel biometric fraud detection tools and a user friendly experience supported in 50+ languages.

Shop4me
A platform that provides logistics services by linking companies with suppliers, obtaining various supplies, shopping and buying online at competitive prices; and finally.

Sukoon
The first holistic mindfulness mobile app in Arabic that provides high-quality recorded audio sessions offering different transformational tools for mental, emotional, and spiritual health and wellness prepared and narrated by expert teachers from the Arab world.

 

Flat6Labs provides startups with funding through the Jordan Seed Fund (JSF), launched in 2021 with a total investment of $20 million, aimed at nurturing the growth and development of 90 early-stage startups during a 5-year investment period. The program is funded by the International Finance Corporation (IFC), the Innovative Startups and SMEs Fund (ISSF), Beyond Capital, Bank Al Etihad, and GMS Ventures & Investments.

Flat6Labs and DisruptAD Launch Largest Cycle Yet with 10 New Startups in Abu Dhabi

The cohort includes 7 UAE-born start-ups and 3 international companies that will now establish significant business operations in Abu Dhabi as they receive world-class mentorship and a total investment of AED8.8 million under the program

Abu Dhabi, United Arab Emirates – 28 June 2022

Flat6Labs, in partnership with DisruptAD, the venture platform of ADQ, today announced the 10 innovative start-ups that have been selected to receive seed funding and world-class mentorship under its flagship Flat6Labs Ignite program. Representing the third cycle of the program, this cohort was meticulously vetted and selected from over 700 applicant organizations from across the globe. 

Launched in March 2021 as a partnership between DisruptAD and Flat6Labs, Flat6Labs Ignite is a specialized seed program committed to supporting up to 60 start-ups in Abu Dhabi over three years. To date, through cycles 1 and 2 of the Ignite Program, Flat6Labs and DisruptAD have graduated 17 start-ups that have cumulatively raised AED14.7 million in funding.

 

“This currently stands as our Ignite program’s largest cycle yet, with 10 start-ups having been selected — a testament to the popularity and value that it delivers. Based on the outcomes of previous cycles, we are confident that by grooming these new start-ups, we will springboard their success, and enable them to become valuable contributors to the entrepreneurship ecosystem and economy in the UAE,” said Ryaan Sharif, General Manager at Flat6Labs UAE.

 

Of the 10 start-ups receiving investments in this new cycle of the program, seven are home-grown UAE companies and the three others have been founded in Poland, Bahrain, and Turkey. The founders and leadership teams of these international start-ups will establish operations in Abu Dhabi, which will now serve as their global headquarters. This is in-line with the Flat6Labs Ignite program’s objective of establishing the nation’s capital as a global entrepreneurial hub and centre for innovation.

Of the 10 start-ups receiving investments in this new cycle of the program, seven are home-grown UAE companies and the three others have been founded in Poland, Bahrain, and Turkey. The founders and leadership teams of these international start-ups will establish operations in Abu Dhabi, which will now serve as their global headquarters. This is in-line with the Flat6Labs Ignite program’s objective of establishing the nation’s capital as a global entrepreneurial hub and centre for innovation.

 

Each of these organisations was selected for investment and inclusion in the program based on their ability to deliver disruptive innovation in their individual market segments, with the aim of pioneering markets in the UAE and subsequently, broader international regions. The 10 organisations selected are: 

 

  • DarDoc: Empowers patients to receive simple to complex care without visiting a hospital, by enabling them to hire a nurse, phlebotomist, or a physiotherapist on demand.
  • Digital First AI: A B2B Martech SaaS provider that leverages AI to enable brands and marketers to easily create and execute effective marketing strategies.
  • Fitlov: A managed marketplace providing fitness and wellness trainers on-demand in UAE, including personal training of any type, massages, life coaching, and nutritionists.
  • FundoMundo: An online, live-education marketplace connecting teachers with learners aged 3 to 18.
  • Hulexo: Helps retailers eliminate stockouts and automatically deploy highly personalised marketing campaigns using AI.
  • Lune: Enables banks, FinTechs and retailers to better serve customers by unlocking insights into customer spending, based on automated analysis of raw transaction data.
  • Makan: A company pioneering the concept of ‘furniture-as-a-subscription’ by enabling consumers to rent furniture monthly with the option of effortlessly keeping, returning or swapping out items as desired.
  • Reach ChannelPro: A SaaS platform that makes it easy for brand owners and their distributors to increase their indirect sales, by digitising channel partner engagement.
  • Savii: Promotes financial responsibility and independence among teens by offering a debit card and banking app that is tailored to their needs and lifestyle.
  • The Scalable CFO: Simplifies finance operations for small businesses by matching them to part-time CFOs from a growing pool of over 6,000 qualified professionals, and also enables the automation of finance and back-office functions.

 

“We are excited to commence this third cycle of our program which sees us supporting start-ups in a variety of new industries — from well-being to martech. The solutions and services of these 10 organisations hold immense value for their target segments and the UAE economy at large. With the expert mentorship and guidance they will now receive, these start-ups have the ability to unlock their full potential, fine-tune their value proposition and rapidly scale their operations in order to accelerate time-to-market,” added Sharif.

Flat6Labs In Abu Dhabi Kick-Off Bootcamp with 20 Innovative Startups

Abu Dhabi, United Arab Emirates – 17 May 2022 –

After receiving and vetting over 650 applications from promising start-ups from over 65 countries — including 158 startups that were founded in the UAE — Flat6Labs, the MENA region’s leading seed and early-stage venture capital firm, this week commenced its 4-day Bootcamp for 20 of the most innovative entrants. Over the course of the week, these start-ups will receive extensive training by seasoned instructors and the Flat6Labs team, based on the ‘Lean Start-up’ approach, following which they will vie for just 10 spots in the third cycle of the Flat6Labs flagship seed program in Abu Dhabi.

With Flat6Labs having already successfully nurtured 18 start-ups, that have cumulatively received over AED18 million in funding, in the previous two cycles of Flat6Labs Ignite — a specialised AED120 million seed program run in partnership with DisruptAD, ADQ’s venture capital platform, to support up to 60 start-ups in Abu Dhabi over three years — this announcement marks a crucial stage in the third intake cycle.

With operations across the MENA region, Flat6Labs has found the start-up ecosystem in Abu Dhabi to be especially active. “25% of applicants to Cycle 3 of our Ignite program were UAE-founded organisations which is not surprising given how the UAE government actively creates policy and reforms to actively promote entrepreneurship. Flat6Labs in partnership with ADQ is here to support this thriving start-up ecosystem and the resounding success we have had over the first two cycles – which have seen companies like RemotePass and Dharma rapidly grow to become dominant players in their respective industries – is testament to the effectiveness of our program,” said Ryaan Sharif, General Manager at Flat6Labs UAE.

The mentorship offered to the start-ups over the course of the Bootcamp includes unparalleled insight on creation of the minimum viable product/service, customer discovery, marketing, go-to-market strategy development, and financial modelling. In conclusion of this training, each start-up will have the opportunity to present its pitch to a Selection Committee comprised of Flat6Labs Management, ADQ’s representatives, veteran venture capitalists and top executives from the region’s leading enterprises for a coveted spot in the third cohort of the Flat6Labs Ignite program.

The companies that are chosen by the Selection Committee will be eligible for seed funding of up to AED1.15 million, and follow-on funding of up to AED2 million. Furthermore, inclusion in the Flat6Labs Ignite program gives selected start-ups tailored support, world-class mentorship, and access to ADQ’s considerable network and resources.

“It’s an exciting week ahead as the 20 start-ups we have shortlisted to participate in the Bootcamp each have the potential to revolutionise critical industry sectors ranging from Health Tech and Agri Tech, to Energy and Logistics. We are confident that the organisations that successfully make the cut will help advance the UAE’s digital economy by becoming drivers of innovation and positive change,” said Jeremy Shorter, Program Director – Abu Dhabi at Flat6Labs.

Survey Results: Key Insights About the Startup Ecosystem in KSA

Over the past few months, we conducted a survey to gain more insight about Saudi startups, including early-stage funding, specifically pre-seed funding, as well as the overall challenges facing the entrepreneurship ecosystem in KSA.

We gathered the responses of 100+ full-time startup founders in KSA, who shared their diverse experiences and perceptions throughout their entrepreneurial journey, and reached the following summary:

Challenges facing entrepreneurs:

Among the many challenges that founders face, is the difficulty of securing the capital required to establish a startup in KSA. About 50% of the respondents were unable to raise funds or finance their startups through independent parties. Instead, they relied on their own funds and support from family members.

In addition to the high operating expenses, 50%+ of the startups, in the case that they actually succeed in securing funding, manage to secure no more than SAR 375,000. This amount isn’t sufficient in financing the operations of any business for more than five months. Based on our estimations, such an amount would often be sufficient to cover business operations for only 3-5 months.
It is worth noting that 17.2% of the participants managed to secure more than SAR 3 million in funding, notwithstanding the limited resources and funding amounts available to most participants. This may indicate that funding opportunities are only focused on some specific sectors.

The scarcity of qualified talent for reasonable wages can also be placed at the forefront of the challenges facing startup founders in KSA, where 23.8% of respondents expressed that they are experiencing difficulty in recruiting talent with the funding cap available.

Furthermore, approximately 17% of the entrepreneurs participating in the survey have highlighted another challenge, mainly the statutory fees and requirements imposed by legislative bodies and authorities in order for them to be able to launch their businesses within a legal framework, which limits the opportunities for some startups. It is also worth noting that 40%+ of respondents cited legal, regulatory and PR services as an alternative to cash funding, in return for 3% of equity.

Funding Sources Available:

Due to the scarcity of funding sources for startups, self-funding is the most common source of pre-seed funding, which 30% of startup founders relied on. Angel investors rank first among independent sources of seed funding, at 15%, among other various independent sources that the founders often resort to at the beginning of their journey, such as business accelerators, venture capital funds, etc.

Startup Age:

According to the founders participating in the survey, one third of startups were founded within the past year, representing a positive reflection of the economic landscape in KSA, following the repercussions of COVID-19.

 

Product Readiness:

50%+ of the participating founders have developed and launched products that are customer ready with more than one third of the startups having generated sales upon introducing their products to the market. Moreover, 17% of the businesses managed to generate sales exceeding 1 million Saudi riyals within the past year.

Preliminary Assessment:

 

More than half of the respondents believe that their startups are worth SAR 10 million or more, and noted that they may be willing to give up only 5% of equity against SAR 500,000.

 

Looking to apply to our Riyadh Seed Program? Applications are open here.

The Saudi Venture Capital Company (SVC) and Flat6Labs launch the “Startups Seed Fund” and Flat6Labs Riyadh Seed Program

Saudi Venture Capital (SVC), one of the most prominent venture investment ecosystem development companies in KSA, has signed a new investment agreement with Flat6Labs, the leading seed and early-stage venture capital firm in the MENA region, to introduce the “Startup Seed Fund”. The fund aims to support startups with growth potential and provide more than 20 Saudi startups annually with seed capital over the next three years, in addition to a number of other benefits.

BLOMINVEST, one of the leading investment management companies in the region, will manage the distribution and marketing of the “Startup Seed Fund” as it will be the exclusive partner for marketing the fund’s units in Saudi Arabia and raise up to SAR 150 million, within 12 months starting from the fund’s launch. The fund will adopt a highly diversified systematic investment plan that aims to reduce the risks faced by VCs along with the administrative and legal costs faced by startups at early stages. The fund is also designed to provide support and investment in Saudi startups, provide various ways to support innovation, and create space for pioneering Saudi youth to develop their technology startups and expand their scope in the region.

The fund’s size is SAR 150 million and is allocated for the investment of early-stage startups operating in the technology and innovation sectors within KSA. The investment provided to companies will range between SAR 937,500 to 1,500,000 per company, as well as follow-on funding that will enable companies to complete their expansion inside and outside KSA.

In addition to the cash investment, the fund offers the Flat6Labs Riyadh Seed Program, which is a 4-month seed program held twice a year for over a span of 3 year. The program will support entrepreneurs to develop their business skills and provide them with a supportive environment to build their products, test market fit, improve their business models, and pitch to external investors; the program’s first cycle is expected to be held in the beginning of the third quarter.

Dr. Nabeel Koshak, CEO of SVC, stated: Our investment in the ‘Startup Seed Fund’ with Flat6Labs is a part of SVC’s implementation strategy to launch the “Investment in Accelerator and Startup Studio Funds” product, this partnership is built to enhance the creation of high-growth startups and to support the investment in their seed and pre-seed stages. This product was developed to foster the growth of the venture capital ecosystem in Saudi Arabia at all stages, in an effort to fill a funding gap that resulted from the focus of venture capital funds and angel investors on investments beyond the seed stage.

The fund aims to support more than 180 entrepreneurs, create more than 6,000 jobs in the private sector of KSA, and enable Saudi companies to expand in the region through the Flat6Labs regional offices. It will contribute to completing the structural transformation process that KSA aspires to by increasing the digital economy’s share of GDP and enhancing the contribution of the non-oil private sector.

Ramez El Serafy, CEO of Flat6Labs, added: “We are pleased to provide investment opportunities to early stage startups based in KSA, which constitute the cornerstone of the private sector in KSA. We look forward to launching the Flat6Labs Riyadh Seed Program, a program dedicated exclusively to accelerating the economic transformation in KSA, being the location of our first regional expansion out of Egypt. We are proud to transfer Flat6Labs knowledge of initial investments and seed programs to our team in KSA led by Eyad Albayouk, our General Manager in KSA, and Lujain Nassif, our Program Director in KSA. We also look forward to strengthening the team in KSA with more young Saudi talents.”

Apply to Riyadh Seed Program by clicking here.