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Sadara Ventures
100 Al-Kawthar Street, Third Floor

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Palestinian IT Opportunity

Palestinian IT Opportunity

Palestine has an educated and entrepreneurial population, including 3600 skilled ICT engineers, 13 centers of higher learning that are projected to add several thousand additional ICT engineers in the coming years, and a developed IT infrastructure. During recent years, a vibrant IT sector has developed, centered in Ramallah but present in smaller numbers in other population centers as well – and has grown in size, sophistication, and export orientation. This sector includes the aforementioned universities, an incubator (PICTI) and an industry association (PITA) in which some 100 companies are members, but has lacked a source of venture capital financing and access to markets that are critical for the growth of a successful entrepreneurial industry.

The Palestinian ICT sector offers cost, as well as certain operational, advantages: Software engineers in the West Bank generally can be hired at wage rates that are very competitive in world terms. Operational advantages include low turnover of employees, excellent command of English, proven on-time delivery even under difficult conditions, advanced and reliable telecom infrastructure, and continuous access to fresh, skilled ICT resources.

The sector also includes several IT companies that operate as subsidiaries of US and European companies, in ¬most cases launched by Palestinian entrepreneurs living abroad. Palestinian expatriates working in the high-tech sector in the US and Europe, can be a valuable resource for companies originating in Palestine.

Finally, a fast-growing market in the broader MENA region, particularly in the areas of online content and advertising, and mobile and Internet technologies, is projected to create a supportive regional ecosystem as well as potential additional exit opportunities for the Fund’s portfolio companies. The managers believe that the growing Internet user base in the Arab world will create significant opportunities around the need for culturally relevant content, e-commerce and enabling technologies, online advertising and supporting infrastructure, in addition to mobile content and delivery platforms.

There have been numerous indicators in recent years of a developing regional software ecosystem in the MENA region. This includes the establishment of several venture capital funds and of several Internet startups, in some cases with the support of multinational companies. Various pan-Arab foundations have also been launched to encourage innovation and entrepreneurship.