Governments and startups, where the two can merge

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Amongst the snow capped Swiss mountains a crop of startups selected from emerging markets descended on the chilly town of Lausanne for the annual Seedstars Summit on February 3.

Alisée de Tonnac giving her keynote speech.

Covering 54 countries from Latin America and Eastern Europe, to MENA, Africa and Oceania, there were 63 startups pitching for prizes worth $1 million.

Held at the SwissTech Convention Centre, beneath its lofty ceilings and high glass windows, the merging of startups, investors and corporations was a melting pot of entrepreneurial excitement.

Seedstars World CEO Alisée de Tonnac said in her opening speech that emerging markets held some of the world’s greatest potential, impressing upon the audience of over 700 that 6 percent of startups would create 50 percent of all jobs. 

Wise words

Alongside the pitching and networking various workshops and panel discussions looked at everything from how startups can get into space, to travel marketplaces to fintech, and how governments and startups can work together.

“Too much government can be a barrier, but they can also allow for complex ecosystems to grow,” was how moderator and telecomms analyst Doug Court opened the discussion ‘Fostering Innovation: How governments can kick-start an ecosystem’.

Nina Teng of Grab sharing her experiences.

The key point that came out of this panel - an important one in particular for MENA entrepreneurs - was that emerging markets are an opportunity for startups to solve problems that governments may also be trying to solve. Regulations are also often uncharted territory for startups venturing into sectors that should or could be supported by government.

According to the World Bank 
over 200 business reforms have been passed throughout the MENA region since 2008. Some governments have gone so far as to launch their own funds and to provide investment and loans to local startups. As examples you have the Kuwait National Fund, Jordan's Investment Council who introduced tax incentives for the ICT sector, and Egypt’s introduction of laws to increase bank SME lending.

Non-regional example

But positioning oneself as a partner for government, and as a solution for a problem authorities can’t or won’t solve, is the way forward.

Nina Teng, vice president of public affairs at Grab, a South East Asia taxi firm, said that working with governments in Southeast Asia was something they wish they had done earlier on in their three year journey. Last year they closed a Series E round of over $700 million.

They recently set up a government team. “It’s a full time effort,” she said. “If you have to think about where regulation plays a role, […] but what is exciting about emerging markets is the opportunity to work with governments and change regulation very fast.”

In Malaysia the taxi situation, according to Teng, was bad. But no one wanted to fix what was an unsafe and unreliable service. “You have to be the chicken and the egg at the same time,” said Teng. “If we had waited for government to come to us we wouldn’t be where we are today.”

Umutcan Duman making his final pitch. (Images via Lucy Knight)

Yaqut, an Arabic e-book platform, told Wamda that publishing in the region was fragmented. Every country had their own rules and regulations, making it harder to expand as going pan-MENA would mean adhering to the different rules of each country. “This causes challenges, so we will be working with governments from now on,” said cofounder Ammar Mardawi.

As part of their time with the Seedstars team, the Jordanian startup received mentorship around ecommerce. Mardawi described the knowledge imparted from their Ebay and Grab mentors as invaluable, because they’d never received mentorship on the marketplace aspect of ecommerce.

For Turkish startup Evreka, a waste disposal management company using sensors, local government was essential to their growth as a business. Cofounder Umutcan Duman said that as municipalities were responsible for waste collection in Turkey, they were the ones providing contracts; Evreka signed their third deal while at the summit and have five clients (private companies and local governments) currently trialing their product.

Best in show

MENAT (MENA and Turkey) was not under-represented at the annual Seedstars Summit competition.

Giraffe wins Best Global Startup
Giraffe getting their check.

Out of more than 50 startups that pitched for one minute in the Best Global Startup round, nine startups including Morocco’s Omniup, Turkey’s Evreka, and Jordan’s Yaqut made it through to the second day. Each pitched to five judges for a $500,000 prize.

But the winner of that round was Giraffe, an employment platform in South Africa.

Others to watch were Eora3D, a 3D scanner device from Australia winners of a timepiece from Swiss sponsors Hublot. Best Woman Entrepreneur went to Morocco’s Omniup, and Best Travel Startup went to Ukraine’s Trip My Dream.

Other MENA-born startups competing at the summit were Lebanon’s Merchandiser, Egypt’s SolarizEgypt, Palestine’s Mashvisor, Algeria’s IoGrow, and UAE’s AlemHealth. Iran’s SmartBean was unable to make it due to visa issues.
Omniup's Loan Duong making her final five minute pitch.

The AP-Swiss space prize was also announced and a grant of $50,000 was awarded to the Panamanian startup MapTasking.

Feature image via Seedstars.

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