e& Capital’s Kushal Shah on Entrepreneurship in the MENA

Kushal Shah, Managing Director of e& Capital, discussed the opportunities in the MENA startup ecosystem with Inc. Arabia.

Transcript

00:00Hi, my name is Koush, I run the VC arm of EAN, which is EAN Capital.

00:17Typically investors look at telcos as utility companies which generate yields, but as the

00:23world moves on, and as customer expectations, whether it's an individual or a business,

00:28they need to move with the technology trends, they need to be moving with the productivity

00:33that these technology trends bring.

00:35Who provides that in a trusted way?

00:37That's where we as a telco, or a techco, need to come in.

00:41We cannot just provide connectivity services, we have to provide a whole bunch of adjacencies,

00:46which connectivity is a key component of, but trust, subscriptions, data, all of those

00:55other elements that allow us to participate in the other side of the economy, but bring

01:00and push the customer base to work faster, and adopt these ideas faster.

01:11We have to do things that EAN cannot do inside the house, we don't want to burn the house

01:14down.

01:15So we go into the barn, let's say, inside the farm.

01:18We go to the barn and we play with multiple barns.

01:21We look for entrepreneurs that we couldn't internally build.

01:25We look for business models that we cannot build internally.

01:28We look for disruptions that might disrupt us, or the economies, and we help support

01:33it and we invest a little bit.

01:36The investment is the capital side, but we also provide go-to-market parts and other

01:42ways of bringing synergies and support to the ecosystem.

01:46We don't do very early stage, so we're not seed, we're typically post-A, so normally

01:51the entrepreneurs should have a revenue north of $5 million.

01:56Normally the business already has a lot of momentum on the product, on the customer base,

01:59so there's enough proof.

02:01That's when we typically invest.

02:02Of course, we build the relationships in both ways around beforehand, we sometimes watch.

02:08We typically like to lead, so consider us as a lead investor when you're looking for

02:13a Series B or a lead Series A. We typically inject $10 million as our average ticket,

02:20so $40 million.

02:22So when you're raising and you feel you have the confidence and the product has traction,

02:27that's when you come to us.

02:34There's always a fluctuation, the good and the bad, and the fluctuation is driven by

02:40the pace at which technology is moving, the pace at which regulations support that and

02:44allow it, and the pace at which capital supports investments into the growth of this.

02:51So those three are not always synchronized, and I think this region has been lucky enough

02:56that there's more synchronization in other regions, where all three are happening at

03:00the same time.

03:01There's adequate capital, there's adequate acceptance that technology needs to happen,

03:05and the regulators in all the fields, whether it's blockchain, whether it's AI, whether

03:09it's fintech, the regulators are all very supportive in the region, or wanting to be

03:14progressive in this.

03:16So I think it's a good time to be an entrepreneur.