Ramallah-based online travel site Yamsafer made waves in the MENA region yesterday, annoucing a $1 million round of investment from Sadara Ventures, a $30 million fund that focuses on early-stage Palestinian tech startups. Sadara's backers include Google Foundation, Cisco, The George Soros Economic Development Fund, the Skoll Foundation, and The European Investment Bank. first to be announced by the fund and the first VC round to close in Palestine.
The investment round is big for a startup anywhere in the Arab World, especially one that bootstrapped for 12 months on seed funding of only $12,000, as founder Faris Zaher explains in our interview below.
Yamsafer, which launched about a year ago, allows travelers to book Middle Eastern hotels online, at prices that are typically lower than the average international site. Its other big differentiator in the online travel agency (OTA) space is that it currently focuses on the hotel vertical and offers bundled packages that include local events, like Mashrou3 Leila's upcoming concert in Amman.
According to Yamsafer's research, the opportunity in the MENA region is quickly growing despite dips in external visitors thanks to the Arab Spring. As in-region travel accelerates, MENA continues to be the world’s fastest-growing inbound and outbound travel market for the past 10 years, recording 10% in average annual growth rates.
Yamsafer has been in talks with Sadara for awhile and now will use the investment to scale and move quickly in a competitive sector, says Zaher, who co-founded the company along with Seri Abdelhadi and Sameh Alfar. The company plans to focus on marketing, increase and improve deals with local hotels, grow its team, expand into Lebanon and Egypt from Jordan and Palestine, and build a mobile application. Eventually it will also move into the UAE and Saudi Arabia and go fully regional, but the opportunity to own the Levant and Egyptian markets is clearly first on the table.
The close of the first early stage investment round in Ramallah marks a new era for entrepreneurship in Palestine- gone are the days of bootstrapping "forever" and closing due to a lack of available funding, says Zaher. With a large Series A round, Sadara Ventures is also making a statement about the opportunities available; hopefully it aspiring entrepreneurs will take note.
In a statement, Saed Nashef, Founding Partner of Sadara Ventures, said: “The online travel market in MENA is a significant growth opportunity, and we believe Yamsafer has all the right ingredients to become a leading player in this space. We’re happy to close this round of financing, and look forward to working closely with the Yamsafer team to create real value for travelers in the region.”