First Published: 2017-02-19

Tech-savvy Beirut to become regional gateway
In past three years, Beirut has developed many of elements necessary to become regional tech powerhouse.
Middle East Online

By Hashem Osseiran - BEIRUT

A city with staggeringly slow internet service, a severe economic slow­down and perpetual po­litical stalemates does not seem to be a likely place for a burgeoning tech sector. Beirut, however, is defying expectations by emerging as a tech gateway for the Middle East.

In the past three years, Beirut has developed many of the elements necessary to become a regional tech powerhouse: Greater access to funding, government support and a growing number of accelerators and incubators.

A database compiled by Arab­net, a start-up incubator and media company, indicates that Lebanon boasts nearly 200 start-ups. A re­port by the group put Lebanon in second place regionally, after the United Arab Emirates, for the num­ber and value of investments in its tech sector.

Beirut has also become a regional hub for tech conferences and semi­nars. It is one of four cities to host the annual Arabnet conference, the region’s leading forum on digital business. Lebanon’s BDL (Banque du Liban) Accelerate conference last year was one of the ten biggest tech conferences in the world.

Only six years ago, limited fund­ing opportunities and little govern­ment support made development of Lebanon’s tech industry difficult for emerging start-ups, said Omar Omran, a Paris-based tech entre­preneur who in 2011 founded Leba­non’s first mobile app development company.

“Back then, it was not easy to find investors or receive support from Lebanese banks. We were funding everything,” Omran said during a Skype interview.

Omran, who has developed soft­ware to detect malaria through im­age analysis and who co-founded at least three tech start-ups in the last six years, said the best hope for an entrepreneur at that time was to seek funding outside the country.

In August 2014, that changed when BDL announced the Circular 331 programme, which would in­ject as much as $400 million into the Lebanese enterprise market. Under this plan, local banks would receive a 7-year interest-free credit from BDL, which could be invested in treasury bonds with an interest rate of 7%. In return, the bank com­mitted to invest in the knowledge economy.

Local banks could invest up to 3% of their capital in start-up sup­port entities, funds or directly into start-ups. BDL guaranteed 75% of the investment, limiting risks by mitigating potential losses.

“Circular 331 was definitely a game changer… It removed the big­gest obstacle, which was funding,” said Nadim Zaazaa, director of the UK-Lebanon Tech Hub (UKLTH), an incubator, co-working space and training academy established by the British government and BDL.

The 331 initiative, Zaazaa said, increased venture capital funds in the last three years and encouraged banks and companies to invest in start-ups and innovation sectors.

“By the virtue of this 3-year track record with 331, we are developing expertise that could position Leba­non to become a market leader for the region,” he said.

The increase in funding was sup­ported by Arabnet data that show how investment in Lebanon’s tech sector rose from ten deals in 2013 to 34 two years later. The rise in in­vestments is “partly driven by the Central Bank’s Circular 331 guar­anteeing $400 million of start-up investments,” the Arabnet report said.

Beyond providing funding for start-ups, Circular 331 also fostered a budding tech ecosystem through sponsored initiatives such as UK­LTH, which has helped local entre­preneurs achieve a global footprint.

Salma Jawhar, co-founder of Play My Way application, an educa­tional learning app that tries to give smartphone addictions an educa­tional twist, is an example of how the new tech environment in Leba­non is yielding results.

“I must give credit where it is due,” said Jawhar, whose app was the second most downloadedin Britain in the last three months of 2016. “If I didn’t join the UK Leba­non tech hub I wouldn’t have made it to this point. I would have never reached the second most down­loaded app in the UK.”

A report from UKLTH said Leba­non was poised to become a tech powerhouse.

The report identified three sec­tors for growth: Financial technol­ogy; the well-being sector, which includes technological innovations and ideas contributing to greater health and well-being; and the retail visualisation sector, which reimagines consumers’ shopping experiences via new channels of purchasing, such as e-commerce.

If Lebanon focuses its efforts around these sectors, the report said, the country would become one of the top ten entrepreneurial countries and would have created an additional 25,000 jobs by 2025.

- Hashem Osseiran is a reporter based in Beirut.

- Copyright ©2017 The Arab Weekly

 

Turkey, US agree to ‘work together’ in Syria

Fears of expanding Syrian war could trigger peace deal

Netanyahu warns Iran, brandishes piece of metal

66 feared dead as plane crashes in Iranian mountains

Students in Damascus brave shelling to attend school

Israeli, US officials meet over gas row with Lebanon

Iran's supreme leader says progress needed on justice

Syria Kurds claim striking positions in Turkey

Saudi women to open businesses without male permission

Netanyahu slams 'outrageous' Holocaust remark by Polish PM

Israeli air strikes kill 2 in Gaza

Six suffer breathing difficulties after Turkish shelling in Afrin

Russian mercenaries - a discrete weapon in Syria

Iran protests ban on wrestler who threw bout to avoid Israel

Battle to free Mosul of IS 'intellectual terrorism'

Turkey frees Garman-Turk journalist after one year without charge

Turkey hands life sentences to 3 journalists for Gulen links

Thousands protest corruption in Tel Aviv amid PM indictment call

Prominent jihadist commander killed by rival Syria rebels

300 Russians killed in Syria battle last week

Tillerson, Erdogan have ‘productive, open’ talk

Iran raises rates, freezes accounts in bid to shore up rial

Kremlin says five Russians killed in US Syria strikes

Oman FM in rare visit by Arab official to Jerusalem

Senior IS leader extradited to Iraq from Turkey

Strikes hit another hospital in Syria's Idlib

Churches snub Jerusalem reception over tax dispute with Israeli authorities

Tillerson says US never gave 'heavy arms' to Kurdish YPG

Captured foreign IS suspects claim innocence

Yemeni mother awaits death penalty for spying for UAE

Fuel shortage shuts down Gaza's only power plant

Morocco arrests three suspected IS terrorists

Family of dead environmentalist in Iran threatened

Israel hands life sentence to Palestinian for triple murder

US appeals to Turkey to concentrate on fighting IS

Turkey sets up new 'observation point' in Syria's Idlib

Malaysia rejects criticism over Israeli visit

Tillerson in Ankara to ease Turkey tensions

Egypt arrests ex-presidential candidate

Tillerson: Hezbollah is part of Lebanon's 'political process'

Netanyahu says government ‘stable’ despite police recommending indictment

Corruption accusations facing Netanyahu

Syria denies ‘unacceptable’ chemical weapons use

Nations pledge nearly $25 billion toward Iraq's reconstruction

Egypt remands in custody former anti-corruption chief