Beyond the bullets and bombs amid the conflict in Gaza and Israel, a tech-oriented venture capital fund has been vetting startups being hatched in the nascent Ramallah IT sector. Sadara Ventures, the first Palestine-based venture capital fund, is deploying money raised from U.S. billionaires to invest in Souktel, a job-matching company created for use on basic mobile phones. Sadara just announced that it is investing $1 million in Souktel, a company founded in 2006 that has already linked 20,000 people and companies looking for jobs.
In the U.S., we take Internet access and smartphones for granted. In the Middle East and other developing markets, broadband Internet access is limited or very expensive, and the penetration of smartphones is still low. So Souktel came up with a way to link job-hunters – the majority of whom own basic “dumb” cellphones that can do simple texting - with employers looking to hire. “If you can deliver information using SMS [texting] than you are meeting a real need. Delivering services over dumb mobile [phones] to emerging markets is very important,” says Saed Nashef, a founding general partner of Sadara and former entrepreneur and Microsoft employee.
Nashef and his business partner Yadin Kaufmann, an Israeli tech entrepreneur and executive, have so far raised $30 million for Sadara Ventures from a host of the world’s wealthiest individuals and biggest tech companies, including George Soros’ Soros Economic Development Fund, AOL founder Steve Case and his wife Jean Case’s Case Foundation, former eBay President Jeff Skoll’s Skoll Foundation, Google’s Google Foundation, Cisco and the European Investment Bank, the European Union’s nonprofit long-term lending institution.
Souktel was co-founded and is run by Jacob Korenblum, a Canadian who is fluent in Arabic and previously worked managing emergency relief and other projects for contractors to the US Agency for International Development (AID) and the Canadian International Development Agency. Unemployment rates among young people in many of the 15 countries where Souktel works are high – close to 20% for young people in Morocco, for example. And yet hundreds of thousands of jobs are also going unfilled. Korenblum says Africa Economic Outlook reported that 600,000 jobs were not filled in Egypt last year. “Workers simply don't know where the jobs are because they lack Internet, government job centers, or other similar resources. Likewise, employers have no organized system for finding qualified staff. Our service aims to bridge this gap through easy-to-use mobile tech,” Korenblum explains.
Here’s how it works: Job-seekers sign up via SMS (“short messaging service,” or texting), creating “mini-resumes” by answering a short series of questions about their location, skills and experience. Employers sign up via SMS or web, and create "mini job ads" through a similar process. Once registered, service users can then text “Match Me” to a 4-digit hotline—and get an instant listing of all jobs (or staff) that directly match the criteria in their own mini resume (or mini job ad, for employers).
Job-seekers pay a premium SMS rate per message sent to the service (for example, $0.05 instead of the usual $0.03). This rate is low enough to be affordable to frontier-market mobile users, but high enough to ensure steady revenue at scale. Employers pay per job ad posting, on a sliding scale that ranges from $20 to $200 depending on the total number of posts and the duration of posting. Souktel also licenses the entire platform to local service providers in various markets; they pay an initial fee plus a share of recurring revenue. Korenblum would not disclose Souktel’s revenues.
“It’s really being Monster on dumb phones with SMS,” says Sadara Ventures’ Nashef. “It’s especially relevant in the post Arab spring countries trying to figure out how to rebuild their economies.”
This is the second investment for Sadara Ventures. (Sadara is an Arabic word that means “setting precedent in the space.”) The first, Yamsafer, is a kind of Hotels.com for the Middle East and North Africa.
Nashef is very optimistic about future growth. “If you look at the opportunity for the tech and the Internet market in the Middle East, it’s really huge. It’s been growing for the last three years. You see activity in Egypt, you see it in Lebanon, Jordan, Dubai. It’s happening across the region.
“What we are doing, we don’t view in any way as political. We are there to invest purely on business criteria. We look for social impact but we don’t look only for that,” he adds. “We want to help entrepreneurs build world-class companies … and companies that create ripple effects.”
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