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UK investors seeking Arab markets look to Arab Israeli start-ups
By NIV ELIS
30/06/2014
Penguin Group, Orange UK, Pearson PLC, NHS Content Division and the BBC all met with delegation of 6 start-ups from Israel's Arab sector.
 
Investors and companies in the United Kingdom looking to expand their reach into the Arab marketplace held meetings with a first-of-its-kind delegation of Arab-Israeli entrepreneurs in London this month.

Penguin Group, Orange UK, Pearson PLC, NHS Content Division, and the BBC all met with the delegation of six start-ups from Israel’s Arab sector, that also participated in the first London Technology Week event.

They showcased their companies before a crowd of investors at an event called Arabtech at Google’s London company, which was co-organized by Israeli NGO Tsofen and the UK Task Force.

“There is a growing appetite for digital innovation in the Arab speaking world and a widening tech entrepreneurship within Israel’s Arab sector,” said Haim Shani, chairman of the UK Israel Tech Hub at the British Embassy in Israel, which organized the delegation. “We believe all sides can benefit from improved commercial connections.”

Israel’s Arabs face significant economic challenges, meeting educational, cultural, and linguistic barriers, as well as discrimination in integrating into the mainstream Israeli economy. While Arabs comprise a fifth of the country’s population, they account for only 8% of its economy productivity, and their poverty rate is more than double the national average.

Yet they are also uniquely placed to fill a growing market void. Arabic is the fastest- growing language on the Internet, so Israel’s Arab citizens are well-positioned to help fill the content gap due to their native Arabic language skills and participation in Israel’s booming tech sector.

“Opening doors to the Arab world is an important step for the Arabs in Israel, the Palestinians in Israel,” said Nabil Armly, founder and CEO of MenaMedia, who participated in the delegation. His company is building a video content aggregation platform for Arabic websites. “Just about all the start-ups are creating content, whether videos, applications or e-books, and our market is the Arab World.”

The UK Israel Tech Hub had identified Israel’s Arabs as an opportunity for the British business community, and founded a program call Go Global to help develop Arab start-ups. Of 40 applicants, 11 were accepted, from which the six participants on the delegation were selected.

Armly, a 38-year-old entrepreneur and former journalist from She-’Amr in Israel’s North who defines himself as a Palestinian Israeli, said he found the trip useful, both for meeting British content providers and networking with potential investors.

Toby Coppel, a partner at European early stage VC fund Mosaic Ventures, said the prospects he saw look promising.

“As investors, it’s important for us to recognize the unique advantage that these Arab entrepreneurs from Israel have in their understanding of the nature of the Arabic social and mobile markets and I’m excited to see how these companies progress,” he said.

Of course, there are difficulties to being an Israeli Arab selling to a market that largely bans Israeli products. Several of the entrepreneurs requested that they and their company not be identified in the media.

“I understand their concern, but I am against hiding,” Armly explained. “Arab customers, like all customers, are looking for the best products, and when it’s created and built by Arab entrepreneurs in Israel, it shouldn’t be a problem. The idea that a Palestinian Israeli entrepreneur marketing to the Arab world as its natural market is smart and legitimate, and I don’t think the Arab user should worry.”
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