A new accelerator programme co-launched by prominent United States-based venture capital company 500 Startups will offer sums of $50,000 in exchange for 7 percent equity shares in each of 21 Arab startups selected to join a 16-week accelerator course in Saudi Arabia, Hasan Haider, partner in 500 Startups, told Zawya in a phone interview on Monday.

“The founders can be from any nationality but the start-ups have to be in the MENA region, the Arab countries… We picked the companies and we launched the programme, and the first day of the programme was yesterday,” Haider told Zawya in a phone interview on Monday.

He said the programme, which will be based in Saudi Arabia, will end with a demo day from companies in May. It is not clear yet if there will another round of the programme, or if this will be a one-off event. He said details about the participating companies will be released at a later date.

Haider, who is currently based in the kingdom, said the programme is targeting early-stage entrepreneurs and requires no fees. He said 500 Startups takes around a 10 percent fee of its popular $150,000 investment-programme that targets mid-stage start-up companies.

Dubai’s popular Wamda accelerator, which has a venture capital arm, last month announced its Wamda X programne, a fellowship-like programme targeted at mid-career individuals who are considering quitting their jobs and starting new businesses.

“I don’t think we are competing in terms of programmes. Wamda’s programme is structured, more like a fellowship, and it is for individuals rather than actual companies that have a product launched,” Haider said.

500 Startups’ new four-month accelerator programme is being carried out in collaboration with Saudi’s Misk Foundation - a non-profit organisation established by the kingdom’s Crown Prince, Mohammed bin Salman, according to a press release issued to announce the news on Monday.

Haider said Misk will help with providing some contacts and facilitating procedures, but he did not give any more details. He said the programme is not specifically targeting Saudi nationals or companies, and is open to any business in the Arab region. The accelerator programme will also handle the visa regulations for the entrepreneurs coming to Saudi from elsewhere in the region.

Asked why it has launched an accelerator in Saudi Arabia, Haider said: “We believe that Saudi is the next market to emerge in the region, there is a lot of opportunity here. There is a lot of great talent. It is the biggest market in the region.”

A report issued earlier this month by Magnitt, a Dubai-based company that provides data and research on startups in the Arab region, said that the number of institutions and angel investors investing in the region’s start-ups rose by 5 percent last year.

The report also said that the total number of deals in the region increased by 3 percent in 2018 to 366. UAE-based startups accounted for 30 percent of these, (4 percent down from last year) followed by Egypt, which received 22 percent of the deals (a 7 percent increase from 2017). Saudi Arabia was the fifth-biggest market, with 7 percent of deals - a 1 percent increase from the previous year.

Further reading:

Our Standards: The Thomson Reuters Trust Principles

Disclaimer: This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Read our full disclaimer policy here.

(Reporting by Yasmine Saleh; Editing by Michael Fahy)

© ZAWYA 2019