Palestine's $12M Ibtikar fund launches, announces 8 investments

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Ibtikar Fund
The Ibtikar Fund's management team, investors and startups. (Image via Christina Ghanim)

Palestinian pride is providing the fuel for the country’s latest startup investment fund, with over three quarters of the funders holding citizenship.

Over 100 people from the local ecosystem turned out for the official launch of the Ibtikar Fund in Ramallah on May 30, and Palestinians’ strong sense of self-identity was a common theme in every speech.

“We are very proud that the majority of our investors at this stage are Palestinians who understand this need,” Ibtikar managing general partner Habib Hazzan. “We are also very happy we have identified extraordinary Palestinian companies to invest in.”

Ibtikar, meaning innovation in Arabic, invests in early stage Palestinian companies. Although it’s been operating for over a year and has invested in eight startups so far, the official launch only took place this week.

Hazzan said the fund’s investments began at the seed level and continued through to Series A investments in its portfolio companies.

“We identified a problem. There is a vacuum in the regional entrepreneurship ecosystem preventing many startups from bridging the early stages of their lifecycle where they are cash negative. Ibtikar is designed to solve this problem in Palestine,” he said.

The fund’s target size is $12 million. The initial closing was $8 million but Ibtikar COO Ambar Amleh told Wamda they expected to finalize the last $4 million in the next six months.

It will have a four year investment period and the term of investments in startups will be 10 years. Amleh said the amount of equity it will take would depend on the size of the investment.

“We currently have agreements to fund startups at the Fast Forward accelerator in Ramallah and Gaza Sky Geeks in Gaza,” she said. “This does not mean we will not consider companies in other accelerator programs but at this point, it's case by case."

Ibtikar Fund
Peter Abualzolof, founder and CEO of Ibtikar's first investment Mashvisor. (Image via Ibtikar Fund)

Palestine pride

A key aim is to work with the Palestinian diaspora and strengthen that network.

Hashim Shawa, chairman of the Bank of Palestine (which is the anchor investor in Ibtikar), said 80 percent of the fund’s investors were Palestinian and either living in Palestine or abroad.

“Investors are not only supporting financially, but also look forward to supporting the startups through their expertise and networks throughout the world,” he said.

Mohenad Itayim of VC firm Sadara Ventures, which is targeting the Palestinian tech sector said Ibtikar’s launch was a significant milestone within the broader ecosystem.

“Both institutional and private investors are beginning to see there are commercially viable opportunities within the emerging Palestinian technology sector as a place, which they could make money, rather than a place that needs money,” he said.

Other investors include Sharakat, the Arab Palestinian Investment Company, and business leaders such as Farouk Shami, Qais Abdullah Al Ghanim and Zahi Khoury.

Amleh said the launch was the result of “years of hard work”.

“Ibtikar is a direct result of a real need witnessed in the Palestinian entrepreneurship ecosystem,” she said in a speech.

“We realized that there were many good ideas, with excellent teams that were dying due to a lack of early-stage funding and support. Ibtikar will fill that gap by making small, incremental investments coupled with direct support and expertise through our management and LP networks.”

Seeing results

Six of the eight companies Ibtikar has invested in, have gone through acceleration programs and the eight startups have created 29 direct jobs within a year.

Peter Abualzolof, cofounder and CEO of Mashvisor, received investment of $200,000 in December 2015.

“Since receiving investment from Ibtikar, we’ve been able to grow the entire team and grow the business. We were able to fulfill our vision of building a product for the US, but having our team in Palestine,” he said.

Ibtikar’s investments so far

Mashvisor: an online platform that automates and analyzes real estate data in the US to empower investors to find traditional and Airbnb investment properties and optimize their rental performance.

Fadfid.com: an online platform that connects customers with licensed psychologists from around the Middle East. Customers can choose a psychologist, book a session, pay for it and conduct it all online on fadfid.com.

Wirez: a promotional marketplace where freelance journalists and filmmakers can share and sell their video work, and where interested media publishers and outlets can buy stories to fulfill their coverage needs.

ArabiAuto: an Arabic-language car portal that allows users to search for a car, connect to dealers, banks and insurance companies, while providing content, videos, and information for car owners and enthusiasts.

Tasameem: an online marketplace specialized in graphic design for individuals and small businesses, with a specific focus on the Arab market, where graphic designers can upload their designs, and customers can browse available designs, customize designs, and tender new designs.

Worknizer: a website that provides a space to organize files, notes, links, and to-do lists, all in one place and through one account, making them available anytime, anywhere.

5QHQH: based out of Gaza, 5QHQH is social web and mobile app that allows users to easily create and share jokes, comics, and other humor. It received more than 30,000 visitors in the first few weeks after its launch.

Masari: a cloud-based accounting program targeting micro and small enterprises in the MENA region, allowing them to easily manage their cash flows, issue invoices and view their historical financial data.

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