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Tue 12 Jan 2016 10:51 AM

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2016 Investor predictions: Dany Farha, BECO Capital

With the region’s start-up scene going from strength to strength, investors have never been more prominent nor more vital. With more and more new businesses looking for funding, and investors looking to put more money into the GCC.

2016 Investor predictions: Dany Farha, BECO Capital

With $50 million in assets under management, and nine portfolio companies including stakes in Propertyfinder and Careem, BECO Capital focuses exclusively on supporting technology start-ups in promising sectors.

Looking back at 2015, the firm’s co-founder and CEO, Dany Farha says: “2015 saw an almost doubling of the number of opportunities that we looked at and we accelerated our investment schedule by almost doubling the amount we invested as per original plan.

“We have seen Lebanon increase its tech activity significantly with the creation by the Central Bank of Lebanon of Circular 331 that provides incentives to commercial banks to unlock and invest capital into the tech sector.

“We have also seen a resurgence in the Egypt ecosystem and the start of the awakening of the Saudi giant with the initial rumblings of entrepreneurial activity, matching by the funneling of funding from the government sector to the high value tech sector. All of this has happened in an exponential fashion, much faster than we anticipated.”

When asked about the possibility of new investors entering the region, Farha says: “We hope and expect funds to flow to the entire funding chain, from friends and family, angel networks, accelerators and incubators, micro-VCs, growth VCs, regional PE firms all the way to international VC and PE firms and funds.

“We also expect that over the coming five to 10 years we will see a wave of consolidation as the amount of funding that goes towards the technology asset class (VC) grows and skews towards the investors that create the most value, in each part of the value chain.”

Similarly, he is confident that entrepreneurs who build ‘great companies’ will not face any major funding-related obstacles this year or any other. “We believe that great people build great companies and, as such, money will chase these opportunities.  We don’t foresee any major obstacles,” Farha says.

“Catalytic events such as landmark exits, further funding rounds and IPOs of our largest companies, will create role models, recycle capital and spur merger and acquisition (M&A) activity, all of which will further fuel the investment cycle in the technology sector.”

Recently, BECO Capital acquired a significant minority stake in JadoPado, a global marketplace platform, which was BECO Capital’s first investment in a marketplace platform. About their future plans, Farha says his team will focus on consumer marketplaces, enterprise SaaS (Software as a Service) offerings, and digital content that is hyper local, and infrastructure providers (e.g. payments, security etc.).

To entrepreneurs seeking funding in 2016, Farha advises: “Solve massive problems. Don’t look for ideas, look for huge problems, and solve them by building long term, defensible and sustainable businesses.

“Don’t give up, keep learning and executing.”