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ACCELERATING THE FUTURE

Are These The Types of Startups MENA Needs Right Now?

The realisation that startups have become a pillar to sustainable economic development has dawned upon many in the past few years in the MENA. Driving an eclectic mix of forces to venture, fund, accelerate, and incubate startups, and to support this ecosystem that breeds innovation. With each passing year, there seems to be a change in the sector trends, and where the fund providers seem to be more attracted towards. Should the focus remain on the most promising sectors or towards those with untapped potential? While both options are being explored by Flat6Labs & StartEgypt and other concerned bodies, the 2019 MENA Venture Investment Summary by Magnitt, highlighted that in 2019, Transport received the most funding; FinTech had the highest number of deals, and IT Solutions had the fastest growing number of deals.

If anything, this Magnitt report highlights a market that is becoming highly saturated with companies who are creating solutions in the aforementioned industries; generating revenue, closing investment rounds, and even closing exit deals in those very industries. It has become a highly competitive market for these companies, and if you don’t have something unique that differentiates your product/service, backed up with a strong knowledge of the market, you are most likely to be stomped by competition. What about other industries with untapped potential? How do they fair in comparison to the most trending sectors?

Gaming & E-Sports Market Share Will Reach $300bn by 2025

Gaming for one is an industry that has a stronger standing than the film and music industries, combined. It is expected that by the year 2025, the gaming and e-sports global market share will reach $300bn annually, according to Market Watch. Also, the MENA mobile gaming market share is growing at a steady rate in comparison to other regions, recording $680m in 2015. Most game developers and game studios are using microtransactions as a business model, and are generating high revenue. However, this strategy comes at a cost. Some game developers tend to abuse this business model to generate more revenue by hindering gamers’ progress unless they buy some of the in-game features they have on offer. It sets off the user, and causes rebellion (a great example of that is BattleFront II). The caveat here is to be capable of adopting such a profitable business model, while keeping the users engaged and without messing with the gameplay.

Other Gaming & E-Sports Flat6Labs startups: Seemba, VRapeutic, The Stories Studio, YAYY Studio, & SpicaTech Academy.

Healthcare Spending Will Reach $144 Billion in MENA by 2022

“According to a report from the Middle East Medical Devices and Diagnostics Trade Association, the annual value of the medical technology market in the region is set to grow to $11 billion by 2021 while overall healthcare spending will reach $144 billion in MENA by 2022 according to Al Masah Capital.” — Wamda.com

Chefaa (an online platform to order prescribed medicine from and a Flat6Labs Cairo Startup) has grown tremendously since they have launched their services to receive a six figure seed round. The startup ecosystem support, along with the high demand for services like Chefaa’s showcases a desire for people to actually use advanced technologies to make life easier. According to another article by Wamda.com, “people are willing to use advanced computer technology or robots with AI that can answer health questions, perform tests, make a diagnosis and recommend treatment.” Also, VRapeutic is combining the knowledge of gaming, VR, and health tech into realising a service that will help autistic children develop a more stable learning path through its VR-enabled learning solution.

Other HealthTech Flat6Labs Startups: Curotrip, AXON Medical, Pharmaklik

E-Commerce & Shopping: Are They Saturated Sectors With No Room For Innovation?

Another promising and highly diverse sector, is the e-commerce and shopping sector, with many problems existing in current platforms and abandoned markets, there are always new solutions to create. Exactly like what three of our startups are doing, while Souq.com is focused on selling any and almost everything, Brimore, Dabchy, & Shiphaly are doing things their own way to help people have a better shopping/selling experience. For one, Brimore (a Flat6Labs Cairo startup) offers end-to-end distribution channels where manufacturers can list their products, then it uses its network of women, housewives, and employees to sell and distribute their products in local circles. Brimore has raised $800k last year alone. Dabchy (a Flat6Labs Tunis startup) is an E-commerce platform with a focus on selling/buying women’s clothing whether new, used, or self-made with an active 400k users and a recent $300k fund. Shiphaly (a Flat6Labs Cairo Startup), on the other hand, is an online platform that helps people buy items from around the world, and helps travelers make money by delivering these items.

While in any of these industries you have a great chance at success, you do not need to be in a specific sector and following a specific trend to succeed. We welcome all kinds of innovative startups, and we invest in teams, passion, and true drive in every industry as long as they are tech-based. You will constantly be challenged, sometimes you will fail, and sometimes you will need to pivot because you’ve just realised a true gap in the market that you can fill. Do your best and luck will be in your favour. If you believe your startup could be MENA’s next unicorn, apply now for one of our programs: Flat6Labs or StartEgypt.

We want to see you make a dent in the industry you are in.

Here Are 5 Reasons Why Governments Should Implement Startup Acts Like Tunisia’s

In order to create a more dynamic startup ecosystem that fosters innovation and encourages entrepreneurs to venture into unknown lands, governments, corporations, and policymakers must understand the benefits of employing new policies and passing new laws that supports the geeks behind each innovation.

While governments across the MENA region have been allocating funds and initiating programs to support early-stage startups, there is little to be seen when it comes to enacting standardised laws that maximize the entrepreneurs’ chances to success.

Yehia Houry, Flat6Labs Tunis Managing Director, on the left, lobbying for the Startup Act at the Tunisian Parliament

“New policies and regulations should take into account the challenges faced by entrepreneurs and the needs of the ecosystem. The timing of the Startup Act couldn’t be better as it stimulates and encourages entrepreneurship across the country. Ultimately, it will result in thousands of new jobs created, important advances in technology and national economic growth.” — Yehia Houry, Flat6Labs Tunis’ Managing Director

Tunisia is one of those countries with its eyes set on empowering its startup ecosystem, and allocating the necessary resources for its hungry and passion-driven entrepreneurs.

“The Startup Tunisia initiative is meant to put the country on the map of startup-friendly ecosystems, sustained by three main pillars: the Tunisian Startup Act; the 200m Euro Fund of Funds; and the ecosystem support. With these things in motion, a synergy effect is expected to be produced between three key players: Investors, as the growth engine; incubators/accelerators as the performance lifter; and Startups as the economic and innovative locomotive.” — Haythem Mehouachi, General Manager of Smart Capital, Startup Tunisia operator.

Through Tunisia’s latest Startup Act, it hopes to create a fertile ground for innovation that both encourages competition and propels individuals who seek to utilise their solutions to the benefit of the community in many industries through its pre-set criteria (as quoted from the Tunisian Startup Act).

– Its legal existence does not exceed eight (08) years from the date of its constitution

– Its human resources, its total balance sheet and its annual turnover do not exceed the ceilings set by government decree

– More than two-thirds (2/3) of its capital is held by natural persons, venture capital investment companies, and collective investment funds. investment, seed money and any other investment body according to the legislation in force or by foreign Startups

– Its business model is highly innovative, utilizing cutting-edge technology

– Its activity has strong potential for economic growth.

This criteria set ensures that only the innovative, competitive, and ambitious startups get the Tunisian “Startup” label, and according to Salma Baghdadi, Smart Capital’s Startup Ecosystem Manager, 210 startups have earned it; out of which were 20+  startups like, Dabchy, Tap4Glam, Sqoin, Junior Robotics Lab, Grabingo, Chantier, Logis, Trust It & many more.

Some of our startups getting the “Startup Label” from the Tunisian Ministry of ICT

Ali Mnif, the Country Manager of Silatech in Tunisia and a member of the ‘Collège des Startups’ and one of the pioneers that worked on the project since the beginning said:

“Clearly, the best thing that could happen is a Startup Act 2.0. All the learnings, the mistakes, the feedback will better shape the second iteration of the key measures to be included.

Startup act 1.0 is a breath of fresh air for many entrepreneurs, startups and investors. It is also a powerful wave that reached many other countries. We keep hearing good news mainly in Africa.

In any iteration, the startup act is capable of breeding more mature startups with solid teams, who are backed up by experienced investors. The challenge would be to quickly incubate, accelerate and support the next regional champions.”

This act should be employed or adapted by other governments because:

1) Promotes Unmatched Innovation of Young & Hungry Entrepreneurs

One of the main criteria of getting the startup label is to be utilising a highly innovative business model, and to use cutting edge technology as part of the solution you are offering, be it a service or a product.

2) Releases Entrepreneurs From The Shackles of Failure

Aspiring entrepreneurs are often burdened with the fear of failure, and it seems to shackle most startup ecosystems around the world, with the first thought being losing the main job that earns them a living, the sustained expenses that come with establishing a startup, and more. Tunisia’s Startup Act allows them to maintain the contract they have with their previous employer without the benefits and grants them a “Startup Leave.” This allows them to focus solely on their startup, and gives them a safety net to fall on if it so happens that the startup fails. It also allows for free local and sometimes international intellectual property registration for startups, and exempts them from corporate taxes.

3) More Innovation Means More Competition

Flat6Labs Tunis Fourth Demo Day Startups

While the day to day consumer or business is often limited by the choices of big corporates, and public services that might be either too outdated or lacks quality, startups pave the road for unmatched innovation at often reasonable prices. More startups usually means more competition, and more competition means better products and services for the community at lower prices.

4) Proves that Innovation Is Often Synonymous With Solving Current Problems

Younger generations think daily of their problems, and many have innovative solutions to the problems at the back of their heads. Utilising this power is instrumental to helping governments resolve the country’s problems. When these entrepreneurs innovate, they solve a problem.

5) More startups means more job opportunities.

Instead of depending on large and medium-sized corporations and governments to do the hiring, startups can offer fresh graduates a new path of learning that is both beneficial and more challenging with often better pay if the startup happens to succeed.

These factors help sustain economic growth and prosperity for the country and the startup ecosystem. They breed a nation driven by sustained innovation in every corner and every industry.

Here Is Why Flat6Labs Believes MENA Needs More Women Entrepreneurs

More women entrepreneurs means more innovation

 

There are often two reasons why someone would start a startup, and it can be either the potential of an untapped opportunity or the potential of surviving poverty and unemployment. In a recent study on women entrepreneurship in the MENA region, Hala Hattab found that the general consensus is that women are driven to take part in entrepreneurial activities because of the existence of opportunities, especially in Egypt. Since we’ve already mentioned that women compromise 48% of MENA’s population, this means that with more women entrepreneurs there is a much higher chance for innovative products and services, and room for improvement in every industry. This will benefit consumers, businesses, governments, and economies of countries at large.

Women-led small businesses tend to create an overflow of job opportunities

 

If more women entrepreneurs were to start venturing with scalable businesses, more job opportunities will be created, and the GDP of countries affected by such growth will increase. In one research, it has been forecasted that if women were capable of starting such businesses, millions of jobs will be created; Dell’s research further elaborated that in the U.S. alone 15 millions jobs will be available for the unemployed. Hattab’s research on the employment rate in women-led small businesses in MENA, indicated that the highest average of employment rates exists in Jordan, Lebanon, and Yemen with around 20 employees per startup; a big number considering that the businesses are still at their infancy.

Women inspire other women

 

Women inspire women. Independent, powerful, and socially impactful women can inspire women to start their own businesses, and be a strong force in any economy. StartEgypt initiative has roamed 17 cities over the past years, and has trained and counseled 1,000 women entrepreneurs around Egypt through 14 Female Founder sessions. During such sessions, StartEgypt brings successful entrepreneurial models to inspire Egyptian females all across Egypt, and they also offer workshops for female entrepreneurs, and provide them with access to their incubation program. Also, StartEgypt’s ‘Inspire’ which was held 42 times, saw about 6,000 females attending it. Last but not least, StartEgypt has welcomed 20 female founders to their incubation program the past cycles! When women are inspired they can lift themselves up from poverty, they can fight unemployment, and their independence will evidently inspire other women.

Women are more likely to invest their revenues to further extend the growth and impact

 

A research conducted by the World Bank, found out a pattern where women are more likely to invest 90% of their income in supporting their families and communities. To further elaborate, a Goldman Sachs report states “enabling women, particularly as entrepreneurs, benefits future generations because women tend to spend more on their children’s education and health, which should boost productivity as well.”

Meet Six Flat6Labs Startups Who Are Helping Drive MENA Towards Environmental Sustainability

In the past few years, several nations and even regional forces have been working towards achieving environmental sustainability, with the EU standing at the helm of recognising the achievement of environmental sustainability as one of its main objectives by 2030 — joined by the UN and several other factions. While progress has been made, the planet still suffers, and most of the MENA countries stand accountable for some of the biggest ecological footprints in relation to their biocapacity as reported in EcoMENA.

In layman terms, the environmental harm instigated by MENA countries towards nature and wildlife exceeds the earth’s capacity to recover. Policy makers, movements, institutions, and other bodies of different countries in MENA are trying to address the issue as the impact on the environment can extend to affect the economic strength of countries. With such a challenge facing MENA countries, innovative entrepreneurs are weaving environmentally-friendly startups to play an integral role in the fight towards sustainability, and many of them are from the Flat6Labs regional programs.

With a history of pushing startups to regional and international exposure after their graduation from the programs, Flat6Labs stands as a leading force in the startup ecosystem; contributing massively to the growth of the startup ecosystem in the MENA region. Flat6Labs plays a seemingly strong role in the development of startups and their social impact, which can be clearly seen through their selection of startups and how their startups affect their communities.

Thus, Flat6Labs have proven to be essential catalysts in the fight towards environmental sustainability. However, those who are standing on the front lines are the startups with their innovative ideas of a better earth. And, in order to understand what our startups are fighting, we should lay ground for the challenges that stand in the way towards environmental sustainability. A research by Mathis Wackernagel, Susan Sakmar, Alessandro Galli, and David Moore, identified six major challenges that stand in the way, with water scarcity and quality topping the list. Following suit were land degradation and desertification; urban and industrial pollution; inadequate waste management; coastal and marine environment degradation; and air pollution and climate change.

Here is how the startups are facing the challenges head on.

Reform Studio (Flat6Labs Cairo — Spring 2014 Cycle)

Co-founded by Mariam Hazem and Hend Riad, and accelerated during Flat6Labs Cairo Spring 2014’s cycle, the Egyptian-born startup weaved a new fabric, Plastex, out of used plastic handbags. They are currently using what they call a “more durable and eco-friendly solution” to weave out beautiful products that could be integrated into different production processes, like chairs and bags. They have stated on their website that plastic handbags, on average, are thrown away after 12 mins of use, whereas plastic material takes years to degrade. Hence, was their creation. Their solution could play largely in waste management and protecting wildlife from plastic waste, and it also reduces urban and industrial pollution.

Lifelab BioDesigns (Flat6Labs Beirut — Spring 2019 Cycle)

Founded by Ali Makhzoum and accelerated during Flat6Labs Beirut Spring 2019 Cycle, the hydroponic-automated farming builds that Lifelab BioDesigns creates, uses water and minerals for nutrition instead of soil to grow plants. This process uses less resources and helps in the natural resources management. On one part, it reduces soil erosion because water is being used instead of soil; and since the process is automated, water is used in specific amounts over extended periods of time. It also limits or even stops the use of pesticides, which is one of the causes of soil erosion and water streams contamination.

Agrona (Flat6Labs Cairo – Spring 2019 Cycle)

While most wood scraps/un-utilised vegetable crop residues are thrown away after cutting down trees, the co-founders of Agrona thought different. Coming out of the Flat6Labs Cairo’s Spring 2019 cycle, Agrona founders saw the waste management problem and lack of efficient use of natural resources, and they had to address it through their bright solution: particleboards made out of recycled wood. They believe that if the plan goes through, their startup will indefinitely reduce the need to cut down forests, and it will help provide job opportunities for a large number of people, including farmers and people in rural communities.

Tagaddod (Flat6labs Cairo — Summer 2013 Cycle)

CNN with Tagaddod

After the technological advancements that has been made in different industries, energy in its different forms has become the source of life nowadays However, this advancement came with an unbearable cost to nature: the burning of fossil fuel, gases, more has punched a hole through the ozone and through our lungs as well. Air pollution, climate change, and industrial and urban pollution have been pushed to the bearable limit. With the Flat6labs Cairo graduate, Tagaddod, from Summer 2013 Cycle, their eco-friendly bio-diesel solution will pave the way towards lessening the harm on the ozone and the air we all breathe. Also, they have another initiative called Green Pan through which they collect used cooking oil to help in the disposal of used cooking oil and to recycle it.

Bekia

On the topic of waste management, Bekia, a graduate from Flat6Labs Cairo’s Fall 2018 cycle, is an online platform that exchanges recyclable material like cooking oil, plastic, and papers with goods and services. The role Bekia plays, takes part in resolving the waste management problem that the MENA region faces. Although their services are currently offered in Egypt, but, hopefully, we will see them expanding to the rest of the MENA region soon.

Wattnow (Flat6Labs Tunis — Winter 2018 Cycle)

Coming out of the Flat6Labs Tunis seed program’s Winter 2018 cycle, Wattnow was created to operate in the home of the average consumers to reduce energy consumption by monitoring electricity usage. This solution allows users to reduce their consumption by 30%, and this reduction also decreases the weight of the carbon footprint. Most countries, especially in the MENA, depend on fossil fuel to generate electricity, which leaves a strong carbon footprint; it, negatively, affects the air we breathe, it catalyses climate change, and contributes to the industrial and urban pollution. With this solution, the harm will be effectively lessened.

Spectre (Formerly known as IOTree, Flat6Labs Beirut — Summer 2019 Cycle)

Spectre Founders

Spectre is a solution able to capture, detect, and warn the farmers about the med fly that is the most dangerous pest targeting the agricultural market in the MENA nowadays. While the threat of the fly is real, the extensive use of pesticides against it poses a great harm to the environment. Such chemicals have greatly contributed to soil erosion and water pollution, rendering most lands unfarmable and water streams unusable. This is exactly where Spectre comes in, with their device monitoring farms, they can easily detect when exactly to spray the pesticide and how much of it would be needed. With the process becoming both effective and efficient, land and water are prone to a much lower degree of contamination. This solution is but one step towards greener farming and agritech. This startup is a Flat6Labs Beirut graduate of 2019’s Summer cycle.

Will MENA’s Next Big Startup be In Mobile Gaming?

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