Consulting alumni helping to drive MENA's blooming tech start-up sector

Alumni of consulting firms are playing a key role in the blooming tech start-up scene in the Middle East, with new research finding over one third of start-up founders have a background in management consulting or financial services.

As the tech start-up sector in the Middle East and North Africa (MENA) continues its ascent, raising over $400 million in disclosed venture capital deals announced in the first three quarters of last year (with the 169 deals surpassing total activity for 2016), a study from MENA start-up platform MAGNiTT has revealed consulting industry experience among founders as a major contributing influence.

In a breakdown of the professional and vocational backgrounds of the top 100 start-up founders in the region, the study found that, as might be expected, 41% of the entrepreneurs had graduated with a degree in IT or engineering, and a total of 35% had previous start-up experience in the region with companies such as Yahoo, Maktoob and Dubizzle. An equal number of founders, however, came to the field via a background in management consulting or financial services. 

This shouldn’t be surprising. As outlined by Philip Bahoshy, founder of MAGNiTT; “Entrepreneurship has multiple challenges, including growing a business, raising funds and developing a strong team and culture. The data highlights that founders in the region have often come from corporate backgrounds. This indicates that the experience and knowledge provides them with the tools to tackle and overcome such issues. Such individuals are likely to have the cash to bootstrap, experience to deal with the regulatory environment and perseverance to succeed in a nascent ecosystem.”

Careem, Fetcher and Souq.com

Of the $404 million in venture capital raised for the first nine months of last year, a rather hefty $150 million chunk was claimed by Careem – the Dubai-based ride-hailing platform which is outperforming Uber across the region and has now been valued at over $1 billion to earn itself unicorn status, or, as Careem co-founder Mudassir Sheikha has joked, ‘unicamel’.

Sheikha, and fellow co-founder Magnus Olsson, met as colleagues while working together at global strategy consulting giants McKinsey & Company. Prior to launching Careem in 2012, Sheika had been with the consulting firm for four years as an Associate Partner, where he advised on strategy and business-building. Olsson, meanwhile, served with McKinsey for six years, latterly in the capacity of Engagement Manager, guiding global clients from his UAE base on strategy, growth and business-building in the tech and IT/Telecom sectors.

Across town in Dubai (which plays host to 50% of the region’s start-ups, although only 1% of founders are UAE nationals – with 38% originally from Lebanon and Jordan) is Fetchr, known as the ‘next desert unicorn’. Like Careem, Fetcher deals in transport logistics, in this instance delivering packages rather than people to serve its e-commerce base. Its founder, Idriss Al Rifai, is an alumni of global management consulting firm The Boston Consulting Group (BCG). Born in Iraq and educated in Paris, Al Rifai returned to the Middle East to serve in BCG’s Dubai office, where from 2010 to 2012, prior to Fetchr’s 2013 launch, he worked for the firm across multiple industries throughout the GCC and Europe with a focus on strategy and people advantage. 

And then there’s the online retailer Souq.com, the region’s first unicorn according to an early valuation, but which was ultimately acquired by Amazon for a cool $580 million. Some of its other figures are equally impressive; 1.5 million visits per day, 70,000 merchants featured on the platform, and a team of 3000 employees. Leading them are Souq’s CEO and co-founder Ronaldo Mouchawar, a former technical and systems consultant for Electronic Data Systems (EDS), along with fellow co-founders Samir Toukan and Hussam Khoury, who had both gained experience in Amman as technology consultants with Anderson Consulting, which would later become Accenture.

Toukan and Khoury would in 1994 go on to establish Business Optimisation Consultants (BOC), set up as the first consulting firm in Syria to specialise in internet and intranet technologies, before, with just $30,000 in capital, launching Arabic web portal Maktoob, which was later picked up by Yahoo and of which Souq was spun out of. And the rest, as they say, is history.