Lebanon is home to several investors, accelerators and startup hubs pivoting the way for growth and excellence. One of the supporters of this system, IM Capital, provides support to a broad range of early stage businesses in the market.
Acknowledging the challenges that startups face in the region, Nicolas Rouhana, General Manager at IM Capital explained that while the region has the talent, it lacks in several key drivers. “There is lack of seed funding and R&D, poor infrastructure – be it in terms of legal work or basic amenities. We have scarcity of angel investing activities and the region has witnessed political and economic instability,” he said.
Despite these, Mr Rouhana stated that the country has huge scope. “Today’s entrepreneurs are educated and knowledgeable. There is availability of post-seed and growth capital and there are many support programs for ventures including accelerators and incubators in the region,” he explained.
IM Capital partnered with Angels Lebanon Network to boost the support given to its startups. “Angel investing is a very crucial part in funding a startup, and more than 75 percent of startups get funding by angels; it comes very early in the lifecycle of a startup hence at very high risk. Our mandate is to encourage early stage investments by de-risking investments through matching capital and insurance capital,” said Mr Rouhana.
Leveraging on above programs, IM Capital de-risks the investment of members of Angels Lebanon Network that are looking to fund ventures. Through this partnership, IM Capital will also help in screening startups to be funded, assist the angels in the due diligence process, follow ups and managing their portfolio.
“Reaching a sustainable and structured angel network in Lebanon is one of our aims, and this is why we launched the Seeders program. This builds capacity for business angels through a ‘learn & earn’ methodology, and open to individuals interested in angel investing but do not have the know-how or enough liquidity to carry a portfolio,” added Mr Rouhana.
Elaborating on the key driving factors of investments in the MENA region, Corine Kiame, Investment Manager at IM Capital cited the existing base of growth-stage companies and corporate investors in the region. She commented, “It’s important to note that almost 90 percent of investments were targeted toward UAE because of the large investment rounds raised by Careem and Souq. Digital startups in MENA are attracting regional and global attention with more governments pushing for innovation too.”
Reflecting on the year gone, Ms Kiame observed that it has been a good year for MENA as a whole. “The year highlights a growing and healthy ecosystem with continued room for improvement. Investors are showing healthy appetite for investment. In 2017, the MENA region had a GEI (Global Entrepreneurship Index) score of 38 following Europe with a GEI of 46 and North America with a GEI of 62,” she said.
In 2018, Lebanon is expected to benefit from the efforts of the last two years. “There will be follow-on rounds and more job creation in light of the total capital disbursed. We expect to see newer local players in co-working spaces, accelerators and VCs this year along with increased attention towards impact investing,” concluded Mr Rouhana.