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

 

Turkish warplanes pound Kurdish forces in Iraq, Syria

US criticizes 1915 massacres in Armenia

Iran, major powers to review adherence to nuclear deal

Netanyahu cancels talks with German FM over NGO meetings

Young Iraqi innovator building home-made drones

Baghdad condemns Turkish airstrikes on Kurdish forces

IS executes Iraqi civilians in Mosul

Qatar World Cup workers receive random health checks

Libyan government calls for foreign intervention as fighting spreads

Tunisia parliament votes to ease harsh drug law

Nostalgia dominates Iraqi Ba’ath conference in Spain

Moroccans call on Le Pen voters to quit country

Turkey court rejects opposition challenge to referendum result

Spain arrests 4 for links to Belgium IS attacks

Iraq forces push towards UNESCO site in Hatra

Israel appoints country's first female sharia judge

Frontline clinic is window to hell of IS-held Mosul

Iraq forces retake west Mosul neighbourhood from IS

Iraqi Kurds lament ‘unacceptable’ Turkish air strikes

Khamenei urges Iran candidates to focus on home

UN chief urges donors to prevent Yemen famine

Yemen’s ‘march for bread’ protestors end week-long march

Jailed British-Iranian sees final appeal rejected in Tehran

Iran election may be pointer to race for supreme leader

US-backed forces enter key IS-held Syria town Tabqa

Israel probe clears officer who shot teen attackers

Syria ‘ready’ to halt fire for chemical attack probe

Israel charges teenager for bomb threats against Jewish institutions

Egypt sentences 20 to death over 2013 police killings

Erdogan accuses researcher of 'inciting assassination'

Qatar Airways CEO accuses US carriers of ‘bullying’

At least 15 migrants drown near Lesbos

Former employees work to salvage Mosul University

Jordan wary about jihadists wishing to return home

US fires opening shots in confrontation with Iran

Mattis sees Saudi Arabia ‘helping across the region’

Sirens, silence as Israel remembers Holocaust

Houthis intensify crackdown on dissent in Yemen

Italian reporter released in Turkey

Algiers summons Morocco envoy over Syrian migrant row

Macron, Le Pen gird for final French election duel

Iran reverses decision to ban live presidential debates

Six Israelis including two soldiers held for anti-Arab attacks

Economists, rights advocates concerned over Egypt’s state of emergency

US Defense Secretary Mattis visits strategic Djibouti