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Lack of funds hinder Saudi scale-ups

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  • SMEs with proven business models that are on the verge of rapid growth often struggle due to a lack of financing options in the Kingdom
  • The Saudi government is offering entrepreneurs subsidized licenses to set up businesses as well as providing scale-ups with mentorship programs

LONDON: Small-to-medium-sized companies (SMEs) in Saudi Arabia looking to take the next step in the growth of their businesses often struggle due to a lack of funding options in the Kingdom, a report found.
Saudi Arabia has an underdeveloped private equity and venture capital market compared to other countries in the region and the banks remain wary of lending to these so-called “scale-up” businesses, according to research published on Tuesday by consultancy Strategy& and Endeavor — an entrepreneur mentorship provider based in New York.
Scale-ups are defined as SMEs with proven business models on the verge of a phase of rapid growth in revenue or staff numbers. Typically they account for 5 percent of a country’s SMEs, the report said.
Saudi Arabia was ranked “below average” on a “scale-up readiness” index compiled by the two consultancies that aim to assess how supportive the business environment is for smaller companies on the precipice of growth throughout the Middle East and North Africa.
The UAE was judged as the leading country in the region for scale-ups, according to the index.
Small scale-up firms in Saudi Arabia face a further challenge of attracting talent to work for them due to the reluctance of Saudi nationals to give up the healthy salaries and security of working for the public sector, the report said. This means these companies have to employ expensive expatriate employees.
The Kingdom is starting to improve the environment for scale-up businesses, said Mahmoud Makki, partner with Strategy&, Middle East. “The government of Saudi Arabia is pursuing reforms that aim to benefit scale-ups and catalyze the entire entrepreneurship ecosystem,” he said.
Reforms include the creation of a “one-stop-shop” portal to help entrepreneurs find out about regulations and how to launch new businesses.
The Saudi government is offering entrepreneurs subsidized licenses to set up businesses as well as providing scale-ups with mentorship programs. The Kingdom’s ministry of economy and planning is working on a new strategy called the “National Champions Program” that aims to help scale-up firms access export markets.
The research sets out recommendations for the region’s governments, advising them to help scale-ups access larger companies by subsidizing the purchase of goods from scale-ups.
Smaller businesses also need access to clear and transparent regulations and better technological infrastructure to bring down the costs of setting up.
“Focusing on scale-ups as a distinct segment with its unique needs will definitely create a more vibrant eco-system and accordingly expedite economic growth and the pace of innovation in the Kingdom of Saudi Arabia and the region,” said Amr Goussous, partner with PwC ME.

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Artificial Intelligence

Nala Raises $1m, Debuts World’s First Arabic Medical Artificial Intelligence

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Nala, Saudi Arabia’s leading digital health service, announced the launch of its artificial intelligence platform that enables instant medical diagnosis in Arabic. The platform will provide users with an accurate medical diagnosis within seconds. To further its growth, Nala has raised $1m in its first financing round.

Nala’s new platform will be an addition to Nala’s current digital health service, which provides users with instant access to personalized healthcare through a mobile app. Over 50,000 people have used Nala, a number that is growing exponentially. Dozens of licensed doctors have helped in the development of the new platform. With this new technology, patients can now receive instant medical diagnoses with an extreme precision that alleviates human error. It is currently available through Nala’s mobile app.

Nala is a Saudi-based corporation established as one of the private enterprises to solve the challenges of Vision 2030. Since its launch in February, it has quickly become the region’s leading digital health service. Featured multiple times by the minister of communication and information technology, and the winner of numerous awards, Nala’s app is consistently ranking first in app stores.

To strengthen Nala’s growth, The company has raised $1m in its first financing round. AlAraby Investment, which led the funding, is a Dubai-based investment group that invests in high-growth companies. With the funding, Nala will continue to grow its user base, further strengthening its position as the region’s top digital health service.

Othman Abahussein, founder and CEO of Nala, commented: “Our mission is to reduce the cost of healthcare by a tenfold while providing exceptional healthcare experience.”

He continued: “Our whole team is in Riyadh, and all of our human capital investments go into local talent. We made a bet on local talent, and I can say with full confidence that it pays very well.”

Typically, advance travel searches like the ones used in this research indicate people know they are travelling either for an upcoming event -such as a wedding – or to return to their home country. The latter, in my experience, makes up the majority of these top destination outbound travellers, but there are still a few interesting insights worth digging into.

We exclusively represent travel audience in this Middle East and see a variety of clients interested in utalising this information for the media outreach. For example, we have found finance and telecom companies interested in future travel insights to target audiences for credit cards and roaming services. The luxury and real estate industries are new trades to show interest due to targeting capabilities. Unlike banking and telecom clients, these brands are not interested in the travel dates; they simply want to create outbound business and first-class traveller segments to target them throughout the year as they have a high disposable income. Hospitality, destination and retail businesses should obviously consider the data to understand the visitor profile shift.

As we progress into 2020 it will be interesting to see how the travel and tourism sector for both countries mature as a result of new visa rules in KSA and Expo 2020.

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Artificial Intelligence

New startups making a splash in Lebanon

EBDA in Arabic (إبدأ) means “to start”. The EBDA programme in Lebanon by SPARK and Injaz Lebanon, a local youth entrepreneurship non-profit organisation, has been focusing on giving startups the boost they need to succeed.

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EBDA in Arabic (إبدأ) means “to start”. The EBDA programme in Lebanon by SPARK and Injaz Lebanon, a local youth entrepreneurship non-profit organisation, has been focusing on giving startups the boost they need to succeed.

The programme, supported by the Dutch Nationale Postcode Loterij, received over 250 applications from startups and business ideas from every corner of the country. 67 were chosen to receive intense business training over 2 months from a team of specialists, focusing on planning and getting to know their target markets.

Only 15 startups were selected to participate in the EBDA Business Plan Competition at the American University of Beirut and present their business plans to a panel of judges for their chance to win up to $10,000 in startup capital. Get to know the winners and the new, innovative businesses that will be shaping the startup scene in Lebanon for years to come:

1. Reef

Rodaina Bou Shaheen started her business, Reef, in Beirut because she noticed that many local and international NGOs required office catering services.

At just 25 years old, Rodaina currently employs 17 women from rural areas and underprivileged communities to cook and prepare the food. Reef was awarded $10,000 in startup funding during the EBDA Business Plan Competition.

2. Dr. Leda

Founded by four Lebanese women, Lina El Khoury, Marie Mouzawak, Alaa Mrad and Rida Halbawi, Dr. Leda provides anonymous, affordable, online psychological counseling. It provides people with the emotional support needed to overcome social anxiety.

Lina said: “I aim to see a world with no discrimination, judgments, and most importantly stigma. I dream that my startup will be able to bring joy and comfort to people, becoming the leading mental health software tool in the MENA region by 2023.” Dr. Leda won $7000 in startup funding during the EBDA Business Plan Competition.

3. Furbiture

Syrian friends, Khalid Al Hamwi & Moubadda Younes who are based in Tripoli, founded this creative furniture design and production lab. Their craftsmanship partners solidly with their designs, creating contemporary furniture that fills the unmet needs of the local market. Furbiture sees huge potential for a furniture industry and market in North Lebanon.

Khalid said: “My dream is to contribute to rebuilding the future of Syria, specifically educating people.” Furbiture also won $7000 in startup funding during the EBDA Business Plan Competition.

4. Find a Nurse

Beirut-based, Lebanese couple, Hussein Sleiman and Khulud Khalil, founded Find a Nurse, which has become the biggest network of home healthcare providers in Lebanon.

The idea arose when Khulud and Hussein were working full-time but couldn’t find a certified nurse to attend to their needs outside of office hours. They realised there was a gap in the market for nursing service. Their online platform connects families with qualified caregivers quickly and affordably. Find a Nurse won $5000 in startup funding during the EBDA Business Plan Competition.

5. No Blues

Two self-taught designers and soap-manufacturers, Mariam Al Kotob and Rajaa Abeed, founded a small atelier where they produce high-quality, handcrafted bath and relaxation product.

The two Lebanese university friends were inspired by local, traditional Tripolitan soaps, as well as new, trendy imported bath products. Their unique brand won $5000 in startup funding during the EBDA Business Plan Competition.

6. ADSH

Syrian, Omar Al Merhe, founded an online platform that allows e-commerce store owners to run their drop shipping stores efficiently. It sells products via a website without having the physical product in stock. It then liaises with bigger companies to ship the customer’s product directly to their door.

The project won $5000 in startup funding during the EBDA Business Plan Competition.

7. MyPlan

Beirut-based Syrian, Mohamad Mkayas, built a software that creates interactive online planning tools for NGOs and community leaders, to help people preparing for business plans and proposals. The software collects hard-to-reach data and shares it with organisations that require such information.

Mohamad said: “My dream is that my online company serves all the world with a mix between technology and development.” His business won $5000 in startup funding during the EBDA Business Plan Competition.

8. Nawafez

Tamador Mahmoud, a young Syrian female entrepreneur based in Tripoli, founded a news website focusing on developmental and economic affairs in the governorates of North Lebanon and Akkar.

After being awarded $5000 in startup funding during the EBDA Business Plan Competition, Tamador said: “My dream is that this news website will become one day a news agency and will give an opportunity to the new generation to be part of the website, providing them with a platform to deliver their own voices.”

9. Smart Kids

Current SPARK student, Yasser Alyan from Syria, won $5000 in startup funding for his application that helps parents monitor and balance the time their children spend playing and learning.

Yasser said: “My dream is to build an e-learning system that complements the schools’ curriculum by integrating entertainment and excitement with scientific topics in order to encourage students to experience science in a practical and fun way.”

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Artificial Intelligence

Re-Humanizing HR With Artificial Intelligence

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It’s easy to see that AI is having a significant impact in every area of enterprise, including human resources and recruiting.

While AI and machine learning have the potential to automate mundane processes, streamline operations and make intelligent decisions, the rapid proliferation of this technology has ignited fear around job elimination and human interaction being replaced by cold, calculated robots.

Despite these concerns, 93% of people are ready to take orders from a robot and more than a third of employees believe that AI will enable better customer and employee experiences. However, only 6% of HR teams are actively deploying AI and machine learning solutions. This gap reveals a missed opportunity.

For many HR professionals, the anxiety surrounding AI lies in making this people-centric function less personable. What if, instead of making experiences more robotic, embracing AI could actually make HR simpler, more agile and ultimately more human?

Utilizing AI to re-humanize HR may sound counterintuitive, but when implemented correctly that’s exactly what can happen. Leveraging AI capabilities in tandem with other HCM solutions allows you to hire smarter, onboard better and retain longer.

There are few things as daunting to a HR professional as recruiting. Not only is there incredible pressure to find the perfect fit, but it requires a significant amount of energy that often results in dead ends or hires that produce little ROI. Fortunately, AI has the ability to give back the most valuable thing in your job: time.

AI-backed tools like a best-fit candidate can help organizations take a more strategic approach to recruiting. Continuously improving through new data and machine learning, AI can identify talent with characteristics similar to existing successful employees and proactively invite them to apply. This way, the only resumes your team will be sifting through are those of truly qualified candidates. And when the process eventually results in an offer, you’ll have data-backed justification for your hiring decision.

On average, companies lose 17% of new hires within the first three months and 15% of those who resigned said that a lack of effective onboarding played a part in their decision to leave. New hires are already undergoing a major life change and a disorganized or difficult onboarding process doesn’t reassure them of their decision to join your organization.

HR teams are beginning to realize the role that a good onboarding experience plays in employee engagement, productivity, and retention, however, a surprising number of businesses still lack an intuitive, formalized process.

When AI is leveraged for employee onboarding, the results are outstanding. By embracing emerging technologies, Arizona Federal Credit Union was able to eliminate 60 hours per month on onboarding tasks and saved 115 hours during benefits open enrolment period alone.

Digital assistants also play a significant role in humanizing the onboarding experience. Between tax deductions and benefit elections, the onboarding process can vary greatly from employee to employee. Instead of relying on a HR representative for help with commonly asked HR questions, new hires can now chat with a digital concierge to get quick access and answers.

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https://forbesmiddleeast.com/re-humanizing-hr-with-artificial-intelligence

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Artificial Intelligence

Artificial Intelligence takes hold of Lebanese StartUps

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With roughly the same population as the State of Missouri, Lebanon is a small country of six million people that borders Syria and Israel. Due to its location, the country has been subjected to a multitude of political and religious factions inhabiting the state. People frequently fight over whose invisible friend is better, and the country has faced long periods of instability including wars with Israel, civil wars and internal conflicts, and most recently some spillover from the Syrian war – which means lots of Syrians flying around on motorcycles. All of this turmoil has contributed to structural problems in the economy such as chronic fiscal deficits that have increased Lebanon’s debt-to-GDP ratio to the third highest in the world. Economic growth has slowed to 1-2% over the past decade which constrains government investments in necessary infrastructure improvements.

Notwithstanding these challenges, day to day life in Lebanon is pretty awesome. With its Mediterranean vibe, great cuisine, and people with a certain joie de vivre, Lebanon is a great place to visit. There are ancient cedar trees talked about in the Epic of Gilgamesh, and in the Baqa’a Valley lies one of the best preserved and grandest Roman temple ruins in the world. You’ll have the whole place to yourself, as it’s just shy of the Syrian border in a small town where you can buy Hezbollah t-shirts because, well, it’s Hezbollah controlled territory. While the economy remains challenged, it doesn’t curb the country’s tech ambitions. Lebanon doesn’t have an official artificial intelligence (AI) strategy, but the country has been working on regional AI events and the implementation of AI into education as well. According to former Minister of Economy Nasser Saidi, development of a national AI strategy is crucial in improving the economy and fighting corruption at the same time.

We toured the country, scoured Crunchbase, and spent some time talking to Sami Abou Saab, the CEO of a Beirut-based startup accelerator called Speed@BDD that invests cash in top-tier companies in the MENA region, to come up with a list of some AI startups in Lebanon for you to check out.

Name Application City Funding
(USD)
Eqlim Big Data Beirut   425 000
Rational Pixels Digital Ads Barcelona and Beirut     30 000
Neotic FinTech Tripoli  undisclosed
dox Electric Vehicle Battery Maintenance Beirut  undisclosed
Fig Chatbot Beirut  undisclosed
Yakshof Big Data Beirut  undisclosed
Cloudfish Big Data Beirut  undisclosed
Hello Harold Big Data Leicester, UK and Beirut  undisclosed
NAR Drone Inspections Wilmington, Delaware, and Beirut  undisclosed


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Founded in 2013, Beirut startup Eqlim has raised $425,000 to develop a big data platform that provides real-time risk intelligence for global supply chains. The startup’s algorithms process data from more than 100,000 web and social media sources to come up with information on geopolitical, operational, and environmental risks in frontier markets. Location-based risk assessments include protests, attacks, smuggling, traffic disruptions, and war, all of which are complemented by crowdsourced information from people close to an incident location.

Risk factors include drug trafficking routes on the border of Iraq and Iran according to Eqlim's regional risk assessment

Risk factors according to Eqlim’s regional risk assessment – Credit: Eqlim

The platform can be used to enhance supply chain security in risky geographies and identify low-risk alternative routes for transportation. The service is also used by commodities traders to forecast the impact of geopolitics on commodity supply, and insurance companies to adjust “country at war” type risks. Eqlim has partnered with Clipper Data, a real-time crude oil and petroleum product cargo tracking company, to provide an alert service specifically for the oil and petroleum product market as well. The company’s Medium blog contains a handful of interesting case studies on countries like Nigeria, Iran, and Brazil. It would be super useful if they could repackage this as a subscription offering for civilians who enjoy traveling to more “exotic” locations.

Click for company websiteFounded in 2017, Rational Pixels has raised a seed round of $30,000 from Speed@BDD to develop a non-interruptive digital ad format embedded into online videos. The startup has established locations both in Spain and Lebanon, but Mr. Saab assured us of their Lebanese roots. As online advertising is becoming increasingly saturated, consumers are irritated by the numerous pop-ups, banners, and full-on ads disrupting videos. Rational Pixels’ algorithms incorporate ads right into videos as if they were in the frames from the beginning, making ads native to the video. How cool is that?

Rational Pixels incorporates targeted ads right into the frames of videos

Rational Pixels incorporates targeted ads right into the frames of videos – Credit: Rational Pixels

Not only is this more user friendly, but ads cannot be blocked or skipped providing guaranteed views. Publishers of online videos can manage when and in what part of the frame their ads will appear through Rational Pixels’ online interface. These ads then change dynamically depending on their audience the same way Facebook and Google Ads do. The company targets both content publishers and digital ad agencies with its offering.

Click for company websiteVisit Tripoli in north Lebanon and you just might see tanks rolling down the streets keeping everything secure. It’s the second biggest city in Lebanon and the home of Neotic, a startup that’s raised an undisclosed amount of funding to develop machine learning algorithms for equity traders. The startup’s platform allows users to create custom trading strategies for stocks traded on the New York Stock Exchange and NASDAQ, and run multi-year backtests on them. When a strategy is up and running, the platform provides ongoing stock forecasts and recommendations, and also executes trades on behalf of the user automatically. Neotic’s algorithms also recommend optimal investment allocations for investment funds.

Neotic's trading strategy model includes stock screening, stop-loss, holding period definition, and % daily investment among others

Neotic’s trading strategy model – Credit: Neotic

The platform offers off-the-shelf short-term strategies with three years of backtesting for really lazy traders and claims its own model portfolios consistently provide positive returns and beat the market over the short-term. Neotic’s platform is also available white labeled for brokers who want to integrate it into their own trading system. Pricing for individual traders ranges from free to $420 a year based on utilization, and case-by-case pricing is available for investment and brokerage firms. Don’t get too excited though. As we discussed recently, it is increasingly difficult to generate alpha without having a very unique data set.

Click for company websiteFounded in 2017, Beirut startup dox has raised undisclosed funding to develop a predictive maintenance platform for batteries in electric vehicles. Battery behavior is hard to predict because it’s related to usage habits and environmental factors. These irregularities can cause sudden battery failures or energy waste, increasing costs for fleet operators. Erring on the side of caution, operators will change batteries too frequently so as to avoid unscheduled system failures. This means a large part of a battery’s useful lifetime is being wasted.

Dox's algorithms predict battery life and schedule maintenance, orders, and replacement for EV batteries

Credit: dox

dox’s platform provides customers with battery analytics, performance metrics, and replacement and maintenance forecasts so operators can save on their fleet’s inventory and service costs. The startup is present in Lebanon and Europe and is targeting battery and electric vehicle manufacturers and telecom companies.

Click for company websiteFounded in 2017, Beirut startup Fig has raised an undisclosed amount of funding to develop an AI-powered custom chatbot plug-and-play solution that takes care of all the heavy lifting like conversational design, configuration, launch, and maintenance on behalf of its clients. The chatbot platform employs machine learning to get smarter over time, and provides analytics and insights about your customers. Some experts say that chatbots will save $65 billion annually in the US alone, as a significant percentage of human customer service and sales representatives become augmented by chatbot technology that handles 95% of call center volume. A “human in the loop” will handle exceptions while also serving as a trainer for the algorithms. Customers of Fig come from a wide variety of industries like travel, banking and insurance, retail, healthcare, and hospitality.

Click for company websiteFounded in 2012, Beirut startup Yakshof has raised an undisclosed amount of money to perform some big data analytics on the news. The company’s algorithms monitor web and social media sources in all languages for information relevant to corporate clients, filter out the noise, and aggregate relevant content. The platform analyzes and indexes results using semantic analysis, network analysis, and facial recognition, to come up with concise executive summaries and visualizations for decision makers. The service allows customers to slice and dice real-time global media coverage to come up with actionable insights related to crisis management, PR, company communications, and security.

Founded in 2015, Beirut startup Cloudfish has raised an undisclosed amount of funding to develop sentiment analysis for the Arab-speaking world. The company’s Babel algorithm, specifically designed to understand Arab colloquial language, listens to social media and web interactions to analyze preferences of the 300 million Arab speakers over the world. Cloudfish also offers a tool for big data analytics specifically focused on the food and beverage industry, and a drag-and-drop report generator for intuitive business intelligence visualizations and presentations. Off the shelf products are complemented by custom big data consulting services for companies looking to develop their own algorithms, performance metrics, and business reporting.

Click for company websiteFounded in 2017, Hello Harold is another startup that has established its presence outside of Lebanon. Located in Leicester, UK, Hello Harold is also backed by Speed@BDD with an undisclosed amount of funding that’s being used to develop a Facebook Messenger chatbot that helps buyers and sellers of used cars find the right price, ad platform, and timing for their transactions.

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Dubai attracts over $21bn foreign investment in AI, robotics

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Dubai has attracted more than $21 billion of foreign direct investment (FDI) for artificial intelligence and robotics project between 2015 and 2018.

Dubai ranked first globally in attracting FDI for AI, with the most coming from the European Union and the United States — $5.7 billion and $3.9 billion respectively.

While AI adoption will account for 45 percent of the world economy’s total gains by 2030, the UAE ranks first in the Arab world in terms of expected annual growth of AI’s contribution to the economy at 33.5 percent, followed by Saudi Arabia at 31.3 percent, the rest of the GCC region at 28.8 percent and Egypt at 25.5 percent.

The organisers of AIM said that digitalisation is becoming an increasingly important part of globalisation, and the fact that Dubai ranks top confirms that the city is fast emerging as the global destination for investment in smart technologies.

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https://www.arabianbusiness.com/technology/415358-dubai-attracts-over-21bn-foreign-investment-in-ai-robotics

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Artificial Intelligence

The robots cleaning Dubai Metro stations

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Dubai’s Roads and Transport Authority (RTA) has embarked on using robots in cleaning metro stations as part of efforts to introduce new techniques driven by artificial intelligence technology. The step is in line with RTA’s efforts to support the UAE Artificial Intelligence Strategy, the authority said in a statement.

“The use of robots in cleaning Dubai Metro stations is an experimental step considered the first of its kind worldwide in using such technology to clean metro stations. Once the success of the trial is verified, the technology will be deployed in other stations,” said Mohammed Hasan Al Amiri, director of rail maintenance, Roads and Transport Authority.

“This robot is designed with international standards, and is highly effective and efficient in reducing the amount of water used in cleaning, and providing a great level of sterilizing.”

He said it can also be pre-set to perform automated cleaning patterns of floors, without human intervention except for limited and simple steps such as adding water and programming.

Read more https://www.arabianbusiness.com/technology/413688-revealed-the-robots-cleaning-dubai-metro-stations

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