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Tue 26 Nov 2019 02:22 PM

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Souq.com, Careem have given 'false hope' to entrepreneurs, says Prince Khaled

Founder and CEO of KBW Ventures says more must be done to help grow start-ups in the region

Souq.com, Careem have given 'false hope' to entrepreneurs, says Prince Khaled

Prince Khaled was speaking at the third edition of the Sharjah Entrepreneurship Festival.

Exits by Souq.com and Careem have given entrepreneurs in the region “false hope”, according to Prince Khaled bin Alwaleed bin Talal, founder and CEO of KBW Ventures.

It is two years since Amazon paid $580 million for Dubai-based e-commerce company Souq.com; while in April this year, ride-hailing firm Uber acquired rival company Careem for $3.1 billion.

Speaking at the third edition of the Sharjah Entrepreneurship Festival, Prince Khaled said: “A souq.com exit was definitely a good thing, but it gave a lot of false hope to a lot of people,” adding that the deals resulted in a lot of people “saying they’re the next Souq or the next Careem”.

Although he said the entrepreneurial system in the Middle East is “very strong”, Prince Khaled warned: “We still have a long way to go.”

He pointed to an uptick in around SAR50m ($13.3m) in deals so far this year in Saudi Arabia, which equates to “a day in Silicon Valley”.

He said that the Middle East economy “can sustain larger deals” and there was no lack of drive or desire, but the issues surrounded legislation and banking laws, particularly around bankruptcy.

However, he added: “We’ve seen some programmes coming out of the Saudi Government that are really encouraging. It’s something I'm following really closely.”

Prince Khaled also highlighted a chasm in between starting up a business in the region and allowing it to grow.

“The issue in the Middle East isn’t the start-up phase. Us Arabs in the Middle East know there’s no shortage of finding mums, paps, grandfathers to fund your company. That’s not an issue,” he said. “The issue is the follow-on investment. The issue is Series B, C, D and onwards. There’s a big gap that needs to be filled to fuel the growth stage.”