Lebanon’s fast-growing startup tech scene is set to tap into the best of British expertise as it moves towards becoming not just a major player in the Middle East, but globally.
The launch of the UK Lebanon Tech Hub will see some of the country’s brightest talent brought to London and mentored as they seek to internationalize their new businesses.
The two-year scheme is backed by both the British government and Banque Du Liban (BDL) - Lebanon’s central bank - and comes as the country’s clout in the regional tech sector grows, fueled by investment and a reputation for creativity.
Revolution of innovation, not guns
At last week’s launch, British Ambassador to Lebanon Tom Fletcher dubbed the scheme part of a “revolution.”
“It is your ideas, your creativity, your talent and your ingenuity that will forge the new Lebanon,” he told a large audience after his speech was delivered to him by drone. “This is your revolution, not a revolution made with guns, but with innovation.”
Data analytics firm Cloudfish's founder Michael Chaftari was in the audience. Chaftari started his business three years ago having previously worked in advertising.
He called the process of setting up “a struggle” but claimed things had changed to make life easier for those who wished to follow in his footsteps.
“In the last two years, we’ve seen the ecosystem change a lot,” he said.
“There’s more money, more funds and it is much easier for people to set up. Things are a lot more structured now and it is easier to access international markets.”
A new scene emerges
Symbolic of the change is the Beirut Digital District (BDD), which hosted the launch of the tech hub.
A series of clusters designed to draw together the tech startup community, the district was first launched in September 2012 and continues to grow, with at least one new building set for completion in the coming months.
Meanwhile, a series of conferences has also sprung up, with Banque Du Liban’s Accelerate drawing more than 1,600 entrepreneurs and 50 speakers from across the world last November.
At another, named Arabnet, a $71 million venture capital fund named Leap Ventures was launched - just the latest in a number of such outfits providing much-needed financial backing to Lebanese startups.
State support
Crucially, the government has got on board. The Accelerate conference and the UK Lebanon Tech hub all come under the provision of the BDL’s Circular 331 scheme, a $400 million fund it set up specifically aimed at assisting startups.
Habib Haddad is the founder of Wamda, a business supporting startup ecosystems across the region.
The serial entrepreneur praised the efforts of the state, which is more regularly on the receiving end of criticism and cynicism when it comes to stimulating growth within the economy.
Comparing his country with regional competitors Egypt and Jordan, he told VOA: “I think it might be the only time I say this but Lebanon is probably the most advanced in terms of state support. When it comes to most other things, state support is far behind, but with startups it has been very supportive.”
Challenges
Hopes are that the UK Lebanon Tech Hub will be part of broader effort at forging links with the international community, helping utilize the country’s strong business culture and educational system and making Beirut a tech base of global significance.
But challenges remain for what is still, in global terms, a small industry.
Despite support for the state’s role, some cite all-too-familiar political maneuvering as the reason behind Lebanon’s sluggish Internet speed.
Meanwhile, following in the footsteps of a diaspora some estimate to number up to 20 million Lebanese, the country continues to suffer from brain drain as some of its best and brightest tech talent leave in search of the real Silicon Valley.
From brain drain to brain gain
But, like many others, David Munir Nabti remains hopeful that such challenges can be overcome.
Nabti’s AltCity acts as another hub for entrepreneurs in Beirut, and hosts conferences and bootcamps for those hoping to take their business forward.
“We’ve suffered quite a lot from brain drain, but we’re also seeing a growing trend of brain gain, as people who lived abroad return to the country excited about the tech ecosystem here,” he said.
“I think we’re going to see a great takeoff point as the number and quality of startups increase dramatically over the next few years.”
Haddad is one of those to return. Having worked in America for over a decade, he was drawn back to Lebanon to set up Wamda.
However, he adds that the extensive Lebanese diaspora could actually prove to be Lebanon’s secret weapon, with national ties and networks already existing to be exploited that other competitors in the region lack.
“I think Lebanon has an unfair advantage and that is the diaspora. It’s not just using individuals in diaspora but using institutions they have built abroad to use it as a platform for scalability for access to international markets.”
Hopes for the economy
At the launch of the UK Lebanon Tech Hub, BDL governor Riad Salameh reiterated his bank’s backing for the sector, telling those present “we are committed to this sector and we believe that it will succeed.”
And with Lebanon’s economic growth continuing to be buffeted by political deadlock and regional instability, the fact the Lebanese state has swung its weight behind this new generation of tech-savvy entrepreneurs is indicative of just how high the stakes might be.
As the hub’s chairman, former telecommunications minister Nicolas Sehnaoui, told VOA: “The digital economy is new in Lebanon but it bears a huge promise”.
“It is one of the only sectors, if not the only sector, that is capable of making the Lebanese economy productive, and keeping the Lebanese youth in Lebanon.”
