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Palestinian hotel-booking site secures $1 million in venture capital funding

Palestinian hotel-booking site secures $1 million in venture capital funding

It took 18 months but an investment firm arranged what it believes is the first early-stage venture-capital financing for a Palestinian-Authority-based company.

Sadara Ventures, a $30 million fund dedicated to early-stage Palestinian technology startups, led a $1 million Series A investment in Yamsafer,, an online hotel-booking site focused on the Middle East. Both the fund and the portfolio company are based in Ramallah in the West Bank.

The move is clearly important for the company in question, but one of the two founding partners of Sadara, Saed Nashef, 43, says the broader significance lies in the economic development of the PA and the Middle East-North Africa region.

“At the end of the day, you are talking about something happening not just in Palestine but all over” MENA, he says.

“In the wake of the uprisings and revolutions taking the region by storm, amazingly we are seeing a parallel increase in investor appetite and entrepreneurial efforts.”

He recalls that the investor Warren Buffett says in so many words that “whenever I see everyone running away, I get in.”

Nashef mentions Egypt, Lebanon and Jordan and Morocco as investor focuses. The Palestinian Authority, he says, is no exception.

“It’s an interesting thing: One of the undercurrents of the Arab Spring is an element of empowerment,” he says.  “A lot of people feel that if they’re able to change governments, nothing is stopping them from going out there and building ideas and companies and impacting the region and even the world.”

Faris Zaher, the 25-year-old chief executive of Yamsafer, says, “A big motivator is the impact we’re looking to make on the economy.

“Palestine is very aid-dependent and the private sector fails to export because of the occupation and border controls. Being part of a small economy gives us the opportunity to have more of an impact. In the U.S. or the U.K. we’d be just absorbed into the broader economy. Here we have an opportunity to really change things.”

Growth potential explains Sadara’s interest in Yamsafer. (The name is pronounced yahm-SAH-fare and means “the traveler” in Arabic.)

The MENA region “has been the world’s fastest growing inbound and outbound travel market for the past 10 years, recording 10% average annual growth rates,” Yamsafer said in a statement.

Even as the uprisings in a number of Arab states have curbed the number of tourists coming into the region, intra-regional travel has steadily risen, the company said.

Yamsafer started up one year ago. It was founded by Zaher, who has a master’s degree in real estate and finance from the University of Hong Kong, and two partners, Seri Abdelhadi and Sameh Alfar.

“The initial idea was to reach Palestinians in Israel going to [vacation in] Sinai,” Zaher says.” There was quite a bit of traffic. But then the revolution in Egypt happened so we pivoted” to a broader intra-regional focus.

The site also has a niche, Nashef and Zaher say: To reach younger travelers, the site will bundle hotel reservations with discounted tickets to events and entertainment.

For its part, Sadara is now almost 1½ years old. It was founded by Nashef and Yadin Kaufmann, an Israeli investment executive, and it’s backed by key tech names including Google Inc. and Cisco Systems Inc. as well as the European Investment Bank and the investor George Soros.


Apeared in MarketWatch by Robert Daniel / Sep. 10, 2012. Read full article: