US-hedquartered Village Capital (VC), with the support of International Finance Corporation (IFC), has recently held an investment readiness programme for 21 Middle East and North Africa (Mena) and Turkey-based startups — including two startups from the UAE — that are tackling the region’s most pressing sustainability challenges.
“We’re really excited about the startup ecosystem in the UAE and impressed by the amount of innovation in the country. As investor interest continues to grow, we encourage founders to lean into their lived experiences and create companies that are solving real problems for people in the region,” Alicia Sornson, Village Capital’s programme and partnerships manager, Mena told Khaleej Times in an exclusive interview.
The two startups from the UAE which were selected by the Village Capital are International Protein and Safe Space. International Protein processes any sort of animal waste into marketable byproducts through a waterless and odourless technology. The Safe Space startup offers live webinars, content, and tools to help maintain and improve the mental health of employees.
Village Capital helps bring big ideas from vision to scale helping entrepreneurs of the future.
Since 2009, the global organisation has supported more than 1,000 early-stage entrepreneurs through their investment readiness programmes and its affiliated fund, VilCap Investments, has invested in more than 110 programme graduates.
The 21 participating entrepreneurs were selected from over 100 applicants and come from ecosystems as diverse as Lebanon, Palestine and Jordan as well as the more well-established ecosystems in UAE, Turkey and Egypt.
“Participating companies have been taken through our curriculum, which prepares them to raise funding from investors. The programme included investment readiness training, intensive feedback from other participants, and one-on-one mentorship with potential customers, investors and industry experts,” said Sornson.
“The top four startups that have been selected by their peers in the programme will receive a $20,000 investment. We have long used the ‘peer selection’ method as a more equitable way to select startups with the most promise and have found that it also improves the diversity of winners. It is the fifth investment readiness programme we have run in the region, but the first focused on sustainability.”
The Mena region is experiencing worsening extreme heat, drought and aridity conditions exacerbated by climate change. The VC programme has supported innovative businesses that are improving the resilience of the planet, with a focus on sustainable sourcing, sustainable food systems, and regenerative farming practices.
“We are constantly impressed by the vitality and ingenuity of the startups we encounter, especially the solutions which evolve from the lived experience of founders. This is especially important in the area of sustainability, where high-growth, scalable solutions focused on people and planet-related challenges in the region are desperately needed,” added Sornson.
In terms of challenges facing people, Covid-19 has intensified regional food and housing insecurity, especially for underserved and rural populations. “We have also been supporting innovators that are improving the health and wellness of underserved communities with a focus on the core tenets of life such as access to food, housing, social wellbeing and health and wellness, including mental healthcare,” She added.
All of the companies in the VC programme are for-profit, scalable solutions to serious issues in the Mena region and Turkey. Each of these companies aims to raise capital from investors and scale its operations. “We know that the best-prepared entrepreneurs are the most successful in raising money, which is why they value the advice they receive from well-placed regional experts and peers during our programme as much as the injection of funding,” said Sornson. “There are barriers between countries and regulatory impediments that impact early-stage businesses’ ability to scale. But importantly, we believe that the local expertise present in many ecosystems across the region can still help equip entrepreneurs to succeed, which is why our advisory board features so many knowledgeable industry professionals.”
Women leading tech-business
Research developed by IFC and the World Bank Group Gender Innovation Lab, in partnership with Village Capital and We-Fi, shows that despite women leading nearly half the start-ups that participate in accelerators there is a disparity in capital raised, suggesting a potential bias in investor decision making or a higher perceived risk for female-led startups.
“We hypothesise that effective interventions to address the gender imbalance will need to be more holistic. We have also been testing other approaches to reduce the gender financing gap over the past decade, including peer selection (which takes decisions about funding out of the hands of professional investors) and a digital tool Abaca (which helps investors discover relevant prospects without initially revealing the gender of the founding team),” said Sornson.
Being cognizant of the issues and the imperative to change the status quo, 44 per cent of companies in VilCap Investments portfolio are female-led.
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