By Shruthi Nair
The objective of the programme is to 'bridge the gap' in the current financing model of regional start-ups
Wamda has launched a new grant-based fellowship programme for the region’s aspiring entrepreneurs, offering grants of $16,000 along with a workplace in Dubai and other cities including Riyadh, Amman and Cairo.
The Wamda X programme will be curriculum light, and will instead emphasise relationships with mentors and the wider Wamda network as a important offering. It will run for four months and take place at a Wamda-dedicated new facility at Dubai Design District.
The programme will be primarily based in Dubai but allows Fellows from various parts of the region the ability to work from their home markets during the second half of the programme. The inaugural batch will begin towards the middle of Q1 2019 for which applications will close on January 20th.
The main objective of the programme, according to Wamda, is to bridge the gap present in the current financing model of regional start-ups and ecosystem support networks.
In an interview with Arabian Business, Khaled Talhouni, Wamda managing partner, noted that at present venture capital’s contribution to the region’s GDP is among the lowest around the globe.
“As a percentage of regional GDP, venture capital here is one of the lowest in the world,” he said. “The more you accelerate that, there is a wider multiplier effect on the economy. So the more capital that flows into the entrepreneurial and innovation-driven businesses, the more you will have the multiplier effect that drives GDP growth in our economies.”
Talhouni pointed to an MIT study which found that “there is a 5 to 10 times economic multiplier effect on start-ups, so for $1 spent, it drives $5 of growth in the underlying economy.”
Another important issue, according to Wamda Capital partner Fares Ghandour, is cross-border mobility and operations.
“This is a 350 million person market but they are scattered over 22 markets,” he said. “You often times have to do repeated leg work in each of those market, which is a significant barrier.”
Ghandour added that he believes that FinTech companies, in particular, require a significant evolutionary leap in the MENA region if regional start-ups are to succeed.
“FinTech is the core industry that needs evolution in the MENA region that would allow the next wave of scale-ups to emerge,” he said. “We have the largest percentage of underbanked in the world. We have the highest credit gap, predicted to be between $300 billion and $700 billion.”
“That is financing that SME’s should receive to build business and depend on the private sector, rather than depending on welfare or the public sector,” he added.