In focus: Investing in Iraq’s technology ecosystem

1 year ago - Wed, 5/23/2018, 6:22 AM

In focus: Investing in Iraq’s technology ecosystem

Image Credit: MAGNiTT

Author: MAGNiTT

By Yasmeen Turayhi / Medium 

 

SOURCE: Medium - Investing in Iraq’s technology ecosystem


 
MAGNiTT is pleased to share this article written by Yasmeen Turayshi and Mohammed Khudairi looking into the Iraqi startup ecosystem. Yasmeen has a wealth of experience in the venture space and currently plays a key role on the board of TechWadi in the Bay area. She continues to push and promote the Iraqi startup ecosystem and the opportunities for the founders there and we look forward to seeing the opportunities develop over time. There is a growing and vibrant community that looks to provide solutions for the local ecosystem. Mohammed is a key stakeholder who acts as a sponsore and promoter of the opportunities in the country. 
 

Last year, I wrote about What you need to know about the Middle East startup space and What you need to know about investing in North African startupsafter I toured Tunisia & Morocco on a State Department sponsored tour and presented at a number of accelerators in collaboration with the U.S. embassy, local governments and institutional investors in the region.

As a Product Marketer / Commercialization Consultant and member of the Board of Directors of TechWadi, a 501c3 non-profit that is committed to building bridges of entrepreneurship between the Middle East and the United States, I’ve had the opportunity to spend quite a bit of time in the Middle East North Africa (MENA) region, speaking with entrepreneurs and founders, and leading technology roadshows from Jordan to Abu Dhabi to Dubai to Casablanca to Tunis and more.

Sensationalist news about conflict captures Advertising dollars and publishers are less financially incentivized to share news about the normalities and progress of human life, but trust me — there are far more normalities in the lives of Iraqis that rarely makes the news. While I certainly acknowledge the stories of conflict, the majority of the country’s 37 Million people are focused on taking care of their families and finding a sense of purpose. At Iraq’s core is the heart and soul of a nation of people that are interested in the expansion of the economy and the investment in entrepreneurship and progress.

Their rich history proves it.

With the collaboration of Mohammed Khudairi, Managing Partner of Khudairi Group in Dubai, who hopes to establish Iraq’s first venture capital fund, we’re excited to share the data and stories from the country.

Iraq’s long reputation of intellectual pursuit of science & art

While the Iraq economy today is primarily built on their natural resources, namely oil which represents 65% of their GDP — the country also boasts of a highly driven and professional and progressive culture that stems back to hundreds of years ago.

Before modern times, Baghdad was famously known as the “Intellectual center of the Middle East”, where intellectuals would gather and creativity blossomed. With a cultural focus on science and art, a number of Iraqi intellectuals and artists have made famous contributions to the collective world consciousness — from Zaha Hadid’s architectural genius to Dia Azawi, author of the manifesto “Towards a New Vision” to Hassan Massoudy, my Uncle and arguably the world’s greatest living calligrapher to Al Khwarizmi, the man who spent his academic life in Baghdad and invented Algebra to Hana Mallah to Adel Abidin and more.

And if you go back farther in history, you’ll find stories about social leadership and creativity from the code of Hammurabi to the stories about Gilgamesh. The ancient city of Babylon, known in Arabic as “Al-Hilla” is a modern day reminder of the breadth and depth of the country’s rich past and artistic genius. In the 8th Century, the Abbasid caliphs who ruled Baghdad famously established the Bayt al-Hikma (The House of Wisdom), a renowned centre of learning.

But I digress. Today, the cultural influences and focus on art and science of the past still permeate throughout the soul of the country. The startup ecosystem, while nascent, is ripe for growth. Of the 37M million of people who live in Iraq, 14M are internet users, and 30M own mobile phones.

Iraqis are Young, Tech-Savvy & Connected

The country’s demographics are similar to the rest of the Middle East and their biggest asset is human capital. The majority of Iraqis are young, urban and educated. Approximately 60% are under 25 years old, approximately 70% live in urban areas, and literacy rates are north of 80%.

“Startup ecosystems across the MENA region continue to develop. Given the challenging environment in Iraq, founders in the country are able to capitalize on the high barriers to entry to create solutions for their market whether it be in e-commerce, logistics or fintech. The key however, as it is for startups across the region, is to create startups that are scalable across borders. Capturing the Iraqi market will make startups interesting acquisition prospects for similar startups across the region looking to capture a new market, however they are also in a prime position to scale into neighboring countries.”

-Philip Bahoushy, CEO & Founder of MAGNiTT

Investment Signals & Entrepreneurship

The media platform BiteTech and MAGNiTT both provide the latest news and information on startup signals in the country, and should be a first point of contact for anyone interested in learning more about the trends in Iraq’s startup ecosystem.

A number of signals like the recent major investment in Baghdad zone for advance technologies (Smart city) and the emergence of accelerators, co-working spaces and incubators like TechHub, FikraSpace, FiveOne Labs prove that the stage has been set for a growing startup ecosystem.

Some of the startups that have launched in Iraq in recent years include Karwa — a ride hailing service, Mishwar — a Grocery Delivery service (which recently raised 145K), Medresty — an app for parents and teachers, Bersima — an on-demand food delivery service, Chanbar — an e-commerce business, Miswag — an online retailer, and Sandoog — an on-demand logistics solutions platform.

Below, you can find a table where they are located in the country and others that are listed on MAGNiTT’s site by vertical. A common theme that we’ve noticed when comparing Iraq’s technology ecosystem with other early startups in the MENA region, is a focus on both logistics and e-commerce.

 

Source: MAGNiTT. Note: If a startup is missing in the table, please contact MAGNiTT.

 

A number of industries require deregulation in order for industry investment to move forward, but Iraq is largely on track to move from an oil based economy to a human capital economy in the not so distant future. For example — the banking sector is an area which Iraq has an opportunity to modernize through the introduction of fintech solutions like mobile payments and automated payment processing for many small businesses. Additionally the government has an opportunity to reduce corruption and bureaucracy by introducing e-government services and allow for greater transparency for all stakeholders.

With enough investment in the ecosystem, our hope is that the media and Western perception of Iraq will shift as people realize the potential the country has; not because of it’s oil, but because of it’s people.

 

WANT TO KEEP UP TO DATE?

Get notified about the latest news, research, fundings and job posts from the MENA ecosystem directly in your inbox

Check out our Privacy Policy HERE

Latest jobs

Top News