In a first for an important region of the Middle East, the Middle East Venture Capital Fund announced today it has raised $28.7 million to invest in Palestinian technology companies.
The fund will be based in Ramallah and it has money from a bunch of international companies, foundations, and other investors. Those include Cisco, Google, the Soros Economic Development Fund, Skoll Foundation, Jean and Steve Case, and the European investment bank.
There is no question that the region badly needs tech startups to create jobs. The question is whether it can actually support tech startups. One disadvantage, beyond political turmoil, is the lack of infrastructure. Cell phone data networks might solve that, but there’s no guarantee that connectivity will be uninterrupted. Another hurdle is the lack of technologically-educated workers.
Intel realized this when it set up a technology education effort back in 2008 in the region. The world’s biggest chip makers has been investing billions of dollars into chip factories in Israel for many years, but not in the Palestinian areas. Still, the area’s talent has likely been overlooked.
The fund will be managed by Saed Nashef, a software entrepreneur and industry veteran who recently returned to the region after nearly two decades in the U.S. Another manager is Yadin Kaufmann, a longtime venture capitalist in the U.S. and Israel.
“We believe the Palestinian technology sector offers significant prospects for economic development and job creation,” said Nashef. “There is a vibrant community of software entrepreneurs who have ‘the right stuff’. We and our investors will aim to provide the access to risk capital and to international markets that these entrepreneurs need in order to compete on the world stage.”
The fund will invest in startups in the internet, mobile and software sectors in the West Bank. Several multinational tech companies already have outsourcing development work with Palestinian software companies. Those include Cisco, HP, and Intel. The fund says there are several thousand skilled Palestinian engineers available and 13 higher-learning institutions.
The fund’s timing is interesting as revolutions have spread through various Middle East countries, including Tunisia, Egypt and Libya. It would be very interesting to see if lasting change and technological advancement comes to the region at a time of dramatic change.
Jean Case, cief executive of the Case Foundation, said she sees tremendous potential in the value of technology firms in the West Bank as a contributor to both prosperity and stability in the region.