Startups pitch for entry to Masdar and BP’s new accelerator
Catalyst advisor Mohamed Hamdy holds forth on what he’d like to
see from startups wanting to enter the accelerator. (Images via
Wamda)
Entrepreneurs are expanding the concept of the
on-demand economy in the Middle East to sustainability
issues.
At last week’s Catalyst Technology Startup
Showcase four out of ten pitches saw on-demand ideas developed
overseas adapted to the local market.
LoadMe, Boxit, MyCars and OwnCar pitched their
version of an on-demand product to a panel of judges from BP
Ventures, Masdar, and Masdar Institute, alongside other ideas
including a web tool to manage natural resources and an efficient
cooling system for mosques.
The startups were pitching for up to US$50,000
in funding and mentorship.
The judges, Masdar Institute VP for research
Steve Griffiths, BP Ventures head Issam Dairanieh and Catalyst
advisor Mohamed Hamdy, were all looking for idea-stage startups
that would benefit from The Catalyst, the first startup accelerator
in the Middle East focused on sustainability.
The Catalyst – a partnership between Masdar,
Masdar Institute and BP – was launched with US$5 million in seed
funding from BP in November 2015 during UAE Innovation
Week.
As a corporate-backed venture and a ‘vertical’
accelerator, it will focus mostly on the cleantech vertical,
reflecting a regional shift towards more sector-specific support
entities and financing.
“Investment in cleantech has been a difficult
field,” said Dairanieh. “People have scars. People who put money in
in 2006 have literally lost their shirts right now.”
But he said momentum had been building again in
the last two years as corporate investors have begun to enter the
field. Importantly, having corporate investors has become more
acceptable to top entrepreneurs.
Masdar Institute’s Griffiths told Wamda that the
accelerator, and the startups that participated in the pitch,
represented an important step in efforts launched by the Masdar
Institute-MIT partnership to develop a stronger cleantech ecosystem
in the region.
Entrepreneurial ecosystems usually take decades
to flourish, with the original entrepreneurs acting as mentors and
investors for the next generation. In order to support its
transition to a knowledge-based economy, the UAE has needed to
fast-track this development. One successful approach, according to
Griffiths, has been to involve large companies in creating
environments conducive for startups to mature.
Masdar’s Steve Griffiths grilling a startup.
Pitching session
The 10 participating startups faced an intensive
round of questioning, exposing the new entrepreneurs to the
strengths and weaknesses of their ideas.
The judges’ questions focused on the competitive
advantage of each startup and how the entrepreneur could protect
his or her business from being too easily displaced by new
entrants.
Catalyst Advisor Hamdy said he was able to
evaluate whether the entrepreneurs really understood the market
drivers during the roundtables that followed the formal Showcase.
He advised the participating startups to think about how they might
use software to protect their hardware from being
commoditized.
The
winning startups – which will become the first cohort of The
Catalyst – will be decided in the coming weeks.
Will Hutson, founder of LMTD, during one of the
sessions
The winning startups – which will become the first cohort of The
Catalyst – will be decided in the coming weeks.
Mahali: A true idea-stage
concept, Masdar researchers Lina Yousef and Mona Al Marzooqi
presented an online platform and app connecting UAE farms directly
with consumers. Dairanieh wanted to know if they would function as
a link between the two, or could expand into logistics and connect
farmers with supermarkets.
Yousef said afterwards they would be further
refining the idea to work out what their core function would be,
before moving ahead with actually starting the business, but they
aimed to add seven more farms to their current three within the
next year.
LoadMe: Sebastian
Stefan’s ‘trucking on demand’ startup is already functioning, with
3,000 companies and 6,000 trucks signed up. Plus a month-on-month
growth static at 40 percent. The site matches empty trucks with
companies that need transport; LoadMe matches between 30-60
customers a week.
During the roundtable session on scaling, Stefan
was advised to link up with FlexPort, a company doing similar
things for shipping, in order to be able to provide a truly
regional player.
Boxit: Premlal PK’s on
demand storage service sells boxes, rather than whole sheds. He
charges $6 per box per month and $10 delivery, and said margins on
these prices were 50 percent and 10 percent
respectively.
He was actually looking for $500,000 investment,
to finance plans to expand outside Kuwait, and said in response to
the question on competitive advantage that the data collected from
customers could provide analytics which would serve as the moat
Hamdy was looking for.
OwnRide: Imran Syed presented
this idea which has, in fact, been tested before with at least
three startups in the US and Australia currently rolling it out.
Ownride wants to enable peer-to-peer car lending, where the owner
of a car effectively rents their car to a stranger.
The key
question from the judges was insurance, which Syed said was not an
issue in the UAE as comprehensive cover is over a car, not a
driver, but admitted the model would have to be tweaked to expand
outside.
Next
Automated Robots: Nicholas Zaatar and Charles El
Khoury’s fire detecting drone confused the judges a little. The
autonomous drone is designed for monitoring and their initial
market is the $30 billion wildfire monitoring industry. Using
thermal and optical cameras the $20,000 drone can detect and relay
information about wildfires immediately, with alerts sent to a
mobile app.
Dairanieh
pressed Zaatar on exactly how the drone was controlled, but the
entrepreneur demurred saying only that they gave messages to the
flight controller via a “brain”, a mini-processor with
autonomous capabilities that communicates, using a certain
protocol, with the flight
controller.
Al Jaith: Fitbit for camels was
how Saeed Al Nofeli described his product. He’s trying to modernize
the camel racing industry by using hardware and analytics to
measure and optimize camel training.
Not strictly a startup around sustainability, Al
Nofeli’s niche product didn’t draw as much interest from the judges
as it did from those watching. He said the idea had legs though,
with camel feed companies and friends in the industry keen to get
in on his beta testing – anything to get an edge in the
increasingly competitive sport.
Foreseer:
Grant Kopec presented the most polished pitch of the day. His
startup, based out of Cambridge university in the UK, was based on
research funded by BP and was a web tool to better manage natural
resources. It used open data sets as well as proprietary
information provided by clients to visualize energy, water, and
land resources futures.
It was Kopec’s first formal pitch event and he
later said the questions around how he’d scale the business model
past the first two clients – BP and Abu Dhabi’s water and energy
regulator – was useful food for thought.
MyCars: Ben Pullen
fronted his startup, an adaptation on the rental car sharing
concept but with the twist of using electric cars. Pullen said they
had two rental agencies keen to partner and wanted to include
electric cars in the fleet as a way to drive demand: with no
dealership offering fully electric cars yet, his team wanted to
give people a chance to experience them in order to drive bottom-up
demand.
The judges queried their 2018 $10 million
revenue projection, although it was based on similar companies in
the UK and US, such as ZipCar. They also asked whether the team had
thought about how they’d go about setting up car hubs – they
had.
SmartMosque: The charismatic
Talal Rahwan explained how although the UAE spent $100 million on
its 7,000 mosques last year, none of that was on potential cost
savings. SmartMosques is a Nest-like thermostat designed
specifically for the unique usage of mosques to manage
cooling.
The judges were keen to know how might the
business model work? Rahwan’s pithy response was “it’s basically to
charge them more than what it costs us”. He was also asked about
why mosques couldn’t just get a normal smart thermostat system, and
what kind of costs and revenue projections the business might
have.
El Noor
Geh: Essam Maged and Mostafa ElKhouly struggled
to explain the core business proposition to the judges, focusing
instead on the awareness side of the entity, but the two had
already won with them over with their name, which means in English
‘the lights are back’.
The startup combines a marketplace for solar
products and awareness on energy use in Egypt.
The content factor was an issue for the judges,
who asked Maged how they would expand when currently the site is
tailored for an Egyptian audience. He later told Wamda this was an
area they wanted mentorship and funding to resolve.
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