What does the future generation of Palestinian startups look like?


What does the future generation of Palestinian startups look like?
Image courtesy of WeDeliver

Majd Zghyer is the strategy officer at uMake, an entrepreneurship support organisation (ESO) based in Ramallah, Palestine.

Last month, the Palestinian entrepreneurial ecosystem celebrated the success of an inspiring Palestinian entrepreneur - Ahmad Ramahi, the co-founder and CEO of WeDeliver; the B2B logistics and last-mile delivery services provider that managed to successfully raise a $2.4 million pre-seed investment round led by major Saudi investors. Ahmad Ramahi’s success is a clear testament to the power of resilience in turning challenges and adversity into promising opportunities. Faced with a small and fragmented local ecosystem, WeDeliver managed to expand its operations beyond the Palestinian market and establish a strong presence in the more advanced and rapidly changing Saudi market. Not surprisingly, expanding from Riyadh has enabled WeDeliver to confidently upgrade its offerings and access new segments of customers, partners and sources of capital.

In a previous article, I tried to answer the question Does Palestine have investment-ready startups?”. Gladly, the recent success of WeDeliver in raising investment from regional and international investors definitely helps in addressing this question and provides a roadmap for other Palestinian founders going forward. Indeed, every startup should be able to create its own growth path and there’s no such thing as a ‘one size fits all’ strategy for success in entrepreneurship. However, the experience of WeDeliver can inspire us to learn from its journey which proves that if Palestinian entrepreneurs seek to build scalable and enduring startups, then they have to focus on three key factors – integration into the Middle East and North Africa (Mena) region, building resilient business models and delivering socio-economic impact.

Integration into the Mena startup scene 

The startup landscape across the Mena has seen remarkable improvements over the past few years. Success stories such as the acquisition of Careem by Uber for $3.1 billion in 2019 and the public listing of Anghami on NASDAQ earlier this year - have attracted greater attention to the region, inspired risk-taking innovation and incentivised positive regulatory transformation. July 2021 was a record-breaking month for the regional ecosystem where Mena-based startups raised almost $632 million across 77 deals. It’s expected that the momentum will continue, and we can hopefully see more inspiring and innovative companies emerging from the region.

For a small and fragmented entrepreneurial ecosystem such as Palestine, it’s very critical to tap into regional opportunities in order to overcome scalability challenges. In fact, integrating with and into regional ecosystems can help Palestinian startups access more advanced technological infrastructure and new networks of customers, investors and support systems. Undoubtedly, the success of WeDeliver in closing its pre-Seed round within its first year of operation in the Saudi market proves that stronger integration into the Mena region can provide a clear and efficient route to scalability. More importantly, it’s very critical for Palestinian founders to keep an eye on the major startup hubs in the region (with greater emphasis on the UAE, Saudi Arabia and Egypt) and incorporate regional expansion early in their business plans and growth strategies. I strongly believe this can be a game-changing strategy that can open new doors for startups originating from Palestine to successfully go from zero to hero within a more reasonable timeframe.

Resilience as a comparative advantage

For the vast majority of Palestinians, the word ‘resilience’ has a very deep and sacred meaning. It identifies the ability to operate under pressure, achieve more with less and emerge stronger from failure. The qualities that Palestinians have to naturally develop as a result of their life under Israeli occupation are considered among the most important characteristics that any entrepreneur should have in order to succeed in their startup journey. The life of an entrepreneur is like a ‘roller coaster’ with many ups and downs and many hurdles to overcome succeeding.

In recent years, there’s been increased focus on how resilient entrepreneurs are the most capable when it comes to turning challenges into promising opportunities and building agile businesses that can stand the test of time. There’s no doubt that in addition to their high skills, Palestinian entrepreneurs have the DNA of resilience which enables them to successfully overcome challenges and ultimately translate hardships into rewarding opportunities. In fact, being resilient in their daily life, Palestinian entrepreneurs can apply the same principles when launching new businesses. In other words, they aren’t only willing to take risks, they are also capable of building agile business models that can survive under very tough conditions and grow against all odds. Ahmad Ramahi and his co-founders have applied these principles perfectly when launching WeDeliver’s operations in Palestine. Specifically, they built an asset-light tech-enabled operational model that addresses reliability and cost-efficiency challenges in last-mile delivery by utilising a ‘crowdsourced’ fleet of captains that enables small businesses and enterprises to launch and scale same-day delivery services.

Impact is the new normal

According to the Global Impact Investing Network (GIIN), the total market size for impact investments was estimated at $715 billion - in assets under management (AUM) - managed by more than 1,750 organisations. Impact investing refers to the investments that aim to generate positive measurable social, environmental and economic impact alongside a robust financial return. Importantly, the industry has been growing steadily over the past decade and we are constantly hearing about huge investment rounds led by influential global impact investment funds such as Leapfrog Investments and Omidyar Network. In fact, the impact revolution has been largely driven by the rise of millennials who are putting pressure not only on policymakers but also on private asset owners and fund managers to help address societal and environmental challenges and contribute to maintaining the well-being of future generations. Besides, the industry has proven that it can generate positive market-rate returns and as a result it has attracted the attention and support of a diversified spectrum of asset managers including pension funds, endowments and last but not least, private equity and VC funds.

The Mena region is home to a long list of complex challenges such as political unrest and instability, inefficient management of resources, high youth unemployment rates and lack of a robust foundation for research and development (R&D). Yet, startups with their entrepreneurial ideas and disruptive business models can provide solutions to many of the challenges facing the region. Moreover, the growth of the impact investing industry provides entrepreneurs from the region with an unprecedented opportunity to incorporate impact into the heart of their business models. It’s not surprising to see that the highest share of recent investments into Mena-based startups went to impact-driven startups that operate in emerging industries such as fintech, foodtech, mobility, edtech and healthtech. I genuinely believe that these are among the industries which will shape the future and help create greater prosperity, sustainability and opportunities for millions of people across the region.  

Accordingly, it could be said that WeDeliver has impact implicitly embedded in its business model. The startup not only aims to improve the last-mile delivery experience for small businesses and enterprises, it also helps in providing job opportunities for the hundreds of people who join its growing fleet of captains. Ultimately, focusing on delivering positive impact can enable startups to build scalable solutions that can be harnessed to address development challenges across the region while also delivering meaningful financial return to both founders and investors alike.

Resilient, impact-driven and regionally-integrated startups

The first book on my 2021 reading list was a very inspiring one titled “Out-Innovate: How Global Entrepreneurs from Delhi to Detroit Are Rewriting the Rules of Silicon Valley”. The author, Alexandre Lazarow, wrote this book based on his experience as a venture capitalist and startup investor both in Silicon Valley and in emerging ‘frontier’ ecosystems. Precisely, the book sheds light on the ‘out-innovators’ who operate in less developed startup ecosystems beyond the Valley where founders must deal with a plethora of political, economic, cultural and infrastructural challenges. Unlike the situation in Silicon Valley, where startup founders have easier access to angel investors, VCs, supportive legal environment and experienced talent pools; founders in frontier ecosystems tend to be ‘creators’ who build non-existent industries rather than being ‘disruptors’ who change them because there are very few businesses to disrupt in the first place. As a result, entrepreneurs at the frontier must focus on resiliency, sustainability and impact rather than unicorn-style growth strategies.

I believe that Palestine is perfectly positioned to produce the next generation of ‘creators’ that Lazarow describes in his book – resilient entrepreneurs who build regionally-integrated startups from birth and focus on addressing socio-economic challenges and delivering sustainable impact to the lives of communities across the region.


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