By Tamara Pupic
At the recent Arabnet Dubai Digital Summit, Salim Akil, founder and CEO of Search in MENA, a B2B online marketplace, spoke about creating the Middle East’s Alibaba in the making.
Many of the start-up events on offer across the region market themselves as the right place for entrepreneurs wishing to get that one business-changing piece of advice, or to network with the right people.
Easy enough to dismiss, it’s a marketing slogan that can prove true.
Since Salim Akil, founder and CEO of Search in MENA, attended the Arabnet Beirut Conference in 2011, a new door has opened for him. Or a few of them.
A Syrian refugee at the time, the 25-year-old graduate of communication technology engineering had already honed his entrepreneurial skills by founding and developing Search In Syria, a business search engine for companies in the country.
While the business was blossoming, the situation in the country was deteriorating, and Akil fled to Beirut. However, he hoped that Dubai would be his final destination.
“When it [Arabnet Conference] started in Lebanon, I planned to go to Dubai. They helped me to move to Dubai,” he told StartUp on the sidelines of the ArabNet Dubai Digital Summit, recently held at Atlantis The Palm Hotel & Resort.
“And now we are planning to go to the US. She [Kamila Mavadin, co-founder and CBDO of Search in Mena] is building a bridge for us for the US from here.”
One of the signs of the rapid growth of Akil’s business is that, while talking about it, he has difficulty in deciding what is more important – the past, the present, or the future. A reversed and unusual approach, therefore, might be the most appropriate way to tell his story.
“We need two years to reach these milestones,” he starts, excited to share the news that the representatives of Alibaba, the famous Chinese e-commerce company, recently visited the company at its headquarters at Dubai Silicon Oasis (DSO).
The Chinese internet giant, which provides C2C, B2C, and B2B sales services via web portals, is interested in entering the region by buying or investing in a locally-grown successful business.
Its first choice would appear to be Search in Mena. Following the success achieved in his home country, Akil set up Search in MENA as an online business directory and search engine that supports the B2B needs of SMEs across the MENA region, and allows it to connect with suppliers, wholesalers and distributors.
It is a British Virgin Islands-registered company, but also the first start-up incubated at DSO in October 2013. “I was the first entrepreneur [there],” explains Akil. “I’m here [in Dubai] three years. In the first year I was looking for an investor. I met with 15 investors, I went with different deals, and exactly after a year I got accepted at DSO.”
Since then Akil has attended numerous start-up events and competitions, gone through a few funding rounds, grown his team from one person [himself] to 10 people, and managed to get 100,000 companies to register on his platform.
“That helped me to see that I’m on the right way,” he says, looking relieved and confident when answering how he felt after the meeting with Alibaba’s team.
The potential happy day for Akil, when a deal with Alilbaba might materialise, is due to be some time in 2017, and is contingent upon reaching 400,000 companies on their website.
“They gave us milestones to achieve,” says Akil. “They came officially and visited us at DSO because they want to come to the region and they want to come through somebody who already knows the region.
“It’s not only about the database, but they are looking to understand how traders here are thinking because it’s completely different than China or the US.”
Interestingly, to reach the target set in the East, Akil has decided to look at the West. At the beginning of this year, Kamila Mavadin, whom he describes as ‘the right co-founder’ due to her passion for the business they are in, has come on board as a co-founder and chief business development officer.
The Harvard-educated Azerbaijani spent her time at the ArabNet Dubai Digital Summit liaising with the attending representatives of 500 Startups and a few US-based investors to figure out how the company can expand into that market quickly and smoothly.
“It’s been six months that we’ve been doing research on the ways the trade happens in the region,” Mavadin explains. “And what we’ve realised, because we are always comparing ourselves with leaders like Alibaba, is that in comparison to China, where most of the manufacturing is happening, the manufacturing in this region is really low.
“Most of the things they [regional countries] are importing from outside of the region. What we investigated is that there are three major trade partners of the region, and one of them is the US.
“On annual level $234 billion worth of trade happens between the region and the US. So, we want to see what kind of opportunities can be utilised from those figures. Plus, another reason why we want to go there is networking and venture capital investments [that] we are planning to raise over there.”
Adding that there is no online trading between the two markets since the stated US-GCC trade figure covers only offline trading, Akil adds: “We want to take part of this offline and also create a new channel which is online, and add more trade value to it.“
Having a co-founder focused on their international expansion doesn’t mean that Akil is less busy since the potential for growth in this region is also huge.
They state that a staggering 85 percent of MENA companies are still offline. Even the 15 percent of companies which have online presence, mainly located in Saudi Arabia, Egypt, Morocco and the UAE, have failed to utilise their online presence and generate revenues from it.
Search in MENA’s unique selling proposition is in helping these merchants in solving four core, information-related issues – discovery, workflow, data management, and price transparency.
Discussing the company’s next steps, Akil says: “You need investment if you want to grow very fast.” He adds that they will open a round of founding on Eureeca, the region’s popular equity-based crowdfunding site, shortly after the conference.
It may make it the only company that has successfully closed a funding round of online contributions from angel investors twice.
This time its aims to raise $250,000, with a minimum investment of $30,000 per investor. Offering a total of 4.386 percent in equity, this investment round values the company at approximately $5.7 million.
“The wheel will start moving,” he says. The latest move is part of a larger plan to raise $3 million in the next six months, which should help it implement plans for 2016 and 2017.
“Then we need $50 million until we reach the point that it’s time to break even and make the profit,” Akil adds.
At this moment, our conversation goes back in time to learn how he grew the business from $30,000, the amount he started with in the beginning.
“The first year, it was so hard to get investors,” he says. “It’s not easy because we are B2B. Investors want B2C. The B2B sector in the region in general is very weak. When you approach companies, they support you up to a certain level in the beginning, and only if they see a real proof that you are doing well.
“The first year we focused on sales and did proof of concept which means that we got more than 100 clients to try our services, and they accepted and paid for it. This is a proof of concept.
“But later on we changed the plan. We said we didn’t want to focus on revenue, but on building the database of the region.”
In spite of the difficulties, Akil was restless. Attending various events and taking part in competitions, including The Entrepreneur, a TV reality show, in 2012, brought him to the attention of a strategic investor.
Silicon Oasis Founders, a wholly owned entity of DSOA, offered them office space and $140,000 for a 27 percent stake.
“Then the time to grow came again,” he continues. “So we went through Eureeca.com in the beginning, and we received $140,000. Then we got another fund [$250,000] from angel investors. So in total in the last two years we got $600,000.”
“After two years, it has become an interesting start-up and investors wanted to invest more and more.”
Not only did the solution it had come up with prove the value of Dubai-based start-ups, but it had become a unique proof of concept for the region’s first online crowdfunding equity site. Having approached their first crowd of Eureeca investors, 13 of them agreed to sell their shares and make room for new ones to take the company further.
“They got on average 150 percent return on their investment after one year. We’ve been lucky to have had this opportunity to sell their shares and get stronger shareholders.” Akil says.
Quite a journey within just a few years. When asked about his opinion on how start-up-friendly a city Dubai is, he says: “I came here when Dubai had just started to support entrepreneurs. I was one of them.
“It [the ecosystem] has improved so much, after three years it’s completely different now, a lot of support from investors and incubators.”
With the themes of innovation, investment and smart government driving the ArabNet Dubai Digital Summit’s two-day agenda, the proof of that was all around us. The event convened more than 1,000 attendees taking part in 35 panels and talks by more than 130 international and regional industry leaders.
During the conference, Aramex announced its plan to launch an app developed in cooperation with several regional start-ups. The new feature will improve their shipping services for both clients and merchants.
Often-referred as the region’s first unicorn, Souq.com also announced the launch of its affiliates programme to enable individuals and companies alike to make up to 10 percent commission each time a user buys online via a link that belongs to their social media account.
When asked what challenges all these entrepreneurs faced in the UAE, Akil says: “The challenge is that Dubai is expensive for entrepreneurs. It starts from setting up, visa, licensing, and … [living expenses].”
“And the challenge is that you have to spend the minimum on development, salaries, in the beginning.
“So you get cheap people and those cheap people don’t do a good job. I had so many problems with that. My experience was bad.
“So this is a big challenge here. At the moment, because we have enough money, we have full time people and really the right talent.”
However, attending the ArabNet conferences on a regular basis has helped Akil to solve this problem as well.
A few years after he met Aiham Jaabari at the Arabnet Beirut Conference in 2011, the sought-after product management and digital marketing expert, who went on to work with Namshi, a UAE-based e-commerce retailer, and dubizzle, a classifieds listing website, decided to join.
“This year, 2015, he joined. He brought [us] so much value,” says Akil.