MENA’s Digital News, Week #16

A weekly round up of the top headlines from the digital sector in MENA, covering startups, corporate and the public sector.

Investments & Acquisitions

Image Source: Jon Richard’s Twitter

Yallacompare, Dubai based financial comparison website, raises $8M lead by Wamda Capital and STC Ventures 

EdCast, US based AI startup, raises $33.6M from global investors: Crescent Enterprises Ventures (UAE). Softbank (Japan), and London Fund, and announcing plans to enter MENA

ClassPass, NY based gym pass startup, acquires Middle East and Asia competitor GuavaPass (Singapore) to expand their geographic reach. Both startups operate in Abu Dhabi and Dubai

Sector News

MBC launches “MBC Studios” to create original content, and hires ex-Hulu executive Johannes Larcher to expand streaming services via Shahid (FT pay-wall) (Variety)

Publiseer, Nigeria’s digital publishing company, partner’s with Google Play Books to expand to Egypt

Democrance, Dubai based insurtech startup, partners with American International Group (AIG) MEA to aid the regional leader in digitization and expand the startups reach regionally through their network 

Ripple’s payment network, RippleNet, now has over 200 financial institutions signed up including: Ahli Bank of Kuwait and Bahrain Finance Company, UAE Exchange, RAKBank, and Moneygram 

MenaPay, Turkish blockchain-based payment platform, will be launched in “whole region” on January 15th 

Image Source: ArabNews

Huawei inaugurates their first flagship store in Saudi Arabia this past Saturday.

Fortnite to launch servers in the Middle East after recurring complains on game performance. This is a clear financial indicator of the scale of the game and revenues coming out of MENA 

Masdar, Abu Dhabi based renewable energy company, announce collaboration with the Department of Transport in Abu Dhabi bus manufacturer Hafilat Industry and Siemens to launch fully electric passenger bus

Microsoft Azure Data Center approved for Qatar (3 have already been commenced in Bahrain) 

Long Reads

MAGNiTT reveals their annual MENA Venture Investment Report 

The Stagnation of Innovation

Reporters that have been covering the technology space for the past 2-3 decades seem to share a recent” “nothing feels new and exciting in tech anymore” sentiment. And I agree, rarely anything does. 

All this “innovation” feels de-facto, obvious and iterative; and that’s cause it is! 

  • QR Codes are now being used for tagging accounts, verifications, and payments, and supported by most mobile “camera” techs
  • Automation is everything that IFTTT set out to do back in the day, but now iteratively diversified and slapped with a Machine-learning layer when possible, if not straight out declared as “AI”
  • Scooter are so 1995, and electric bikes are so Y2K, they just merged into electric scooters (and we still have to “share” them!)
  • VR/AR is kind of an old fad now
  • Bitcoin, Ripple, Ethereum and even the promise of blockchain is a topic we organized events around (even in MENA) in 2012
  • On-demand services have been around for over 8 years now, and just like eCommerce the only real change is breadth and speed (and the occasional invasion of privacy)
  • Advertisers have been buying client data for decades, and hiring brand ambassadors (on commission or retainer) forever, we just have a name for it now “influencers”
  • Even regulators remains 10 steps behind. As always.

Things are so repetitive that technology now has fashion cycles: How can we bring back the 80s with a twist, Wide legged high waisted jeans with a flip phone and a tamagotchi on your phone or wagging it’s metallic tail next to you. 

Some of the real, but not exciting to buzz about, innovation is in algorithms: big data and data analysis that allows these technologies to be optimized and improved, even personalized 

The only sector i’m seeing real innovation in is medical research, the slow and steady type (not theranos), with its long research cycle, embedded AB testing and strong regulations. It builds on years of research, optimizes with data powered tech and tada: maybe this could work. 

Space, Quantum Computing, Health tech; the technology that is exciting to watch is that that has the highest risk and cost of failure because it truly breaks the new frontiers. At least that’s what is fascinating the most now. 

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I won’t buy Cryptocoins to use your service (1/2)

3 minutes

cryptocoins bitcoin eth litecoin

A few weeks ago I was at a startup conference and the inevitable happened: I met a talent-marketplace (hire-a-freelancer) startup that planned to sell their own crypto-coins to be used as tokens on their platforms before launching their product…

Me: Why would I buy your coin / token?
Founder: To use the service and pay for the freelancers
Me: But, why can’t I pay in dollars?
Founder: But that’s the whole point…
Me: I don’t get it. Why would I use your service if I need to buy a specific coin and carry the burden of all the exchanges…

and it’s true, I won’t. Nor will anyone else.

The craze of crypto-currencies is in it’s peak; there are over 1,500 coins listed on CoinMarketCap. It doesn’t make sense for an individual to have a wallet full of coins and tokens lying around in case they need to use one or the other, add to that the accumulated cost of moving the coins and exchanging them.

In the example above the founder was hoping to use his token as a currency, but had forgotten one small glitch: the user. A talent marketplace requires a high adoption rate to survive as it makes money from taking a small percentage of payments and occasionally advertising (other revenue streams apply, but these are the most straightforward). For that, the founders need to aim for high adoption and retention rates, and decrease barriers of entry.

As a first time user, the need to buy a token to access the service is an immediate obstacle.

  • How many companies/individuals that hire freelancers have access to crypto-wallets, coins, etc?
  • How many are willing to buy coins that they may or may-not choose to convert back to ETH or BTC later.
  • You have already lost the client to thinking of how they’d get into your service, instead of placing the solution to their outsourcing problem at the core of your offering.

adoption rates for common technologies today, the cyrpto one is yet to show up

Major tech companies and upcoming ones are, will, and have considered ICO (Initial Coin Offering) as an alternative funding method to traditional investors or IPOs (with their lengthy processes). However, we are in the peak of hype over crypto-currency, and it’s still a super high risk enviroment. As an idea stage startups, the odds are already against you, so unless your startup’s core function is crypto-related, maybe it’s best you focus on your business.

There are many technologies that will disrupt the market and the rate of change will only increase in the next few years. Founders have to embrace changes and adopt new technologies on the go, but they also need to take calculated steps that they won’t regret.

Are you considering launching an ICO, considering the following:

  • How will this affect my core business?
  • How will this make the consumer experience on my platform better?
  • Am I forgoing potential venture capital support (financial and non-financial) that could help grow my business?
  • Can I withstand an un-forseen drop in overall crypto-valuation?
  • Do I understand how this technology works well enough or will I be at the mercy of my developers. Can I hire, retain and grow the right team to help me on this path?
  • If I’m paid in crypto-coins by my network, how do I plan to pay my existing non-crypto liabilities? Can you liquidate?

My two cents: Most people will pay for your service or product in their respective currency, your system will token-ize that value and run the service as needed. The average consumer will not need to know how, where and why. Your system will need to be optimized for the customer’s most seamless experience and your products best productivity. 

P.S. I do own some cryptocurrency (BTC and ETH). I’m not against crypto-currencies, I just see that the hype is deluding startup founders’ attention a tad too much.