Around 5 years ago, equity financing for startups and new businesses in Lebanon and the region was nearly nonexistent. However, in 2014, with advising from the World Bank and EU, Banque du Liban (BDL) issued Circular 331. The circular aimed to incentivize commercial banks to support entrepreneurship by guaranteeing up to 75% of the value of a commercial bank’s investments into startups or venture capital funds, mobilizing around $400 million in equity funding.
For such a small country, Lebanon has an exceptionally high number of funds and is home to 18% of investors in the region, driven by Circular 331. Circular 331 played a significant role in activating Lebanon’s startup economy. The momentum has been evident across all stages of the start up ecosystem with the rise of more start up companies, dedicated investors, accelerators, enablers, and more. Since its issue, the support infrastructure for entrepreneurs has expanded, and the country has witnessed the rise of new funding institutions such as B&Y Venture Partners, Cedar Mundi, IM Capital, Lebanon Seed Fund by Flat6Labs, and Phoenician Funds, as well as other funding support programs. Acceleration programs such as Agrytech (by Berytech), Elevate (by Altcity) and The Nucleus (by UK Leb Tech Hub) have also launched, and co-working spaces, innovation labs, incubators and entrepreneurship programs have emerged, providing the groundwork needed for innovative ideas to thrive and grow.
According to ArabNet’s State of Digital Investments Report 2013-2016, over the past four years, Lebanon has risen steadily in the ranks in terms of number of investments, and is currently one of the top markets in both number and value of deals. Since 2013, Lebanon has witnessed at least 100 deals, with the value of deals in 2016 amounting to $56M.
In recent years, Touch has been taking a more active role in the innovation and entrepreneurship ecosystem by hosting bootcamps, sponsoring competitions, partnering with local institutions, driving forth innovation programs, and many more initiatives. The recently launched Touch Innovation Program (TIP), an innovative platform to empower rising Lebanese entrepreneurs, is a program in which TIP will identify and select 4-6 promising entrepreneurs every 6 months, who will have access to Touch LAB as a working space for meetings, products and services launches, and to host workshops.
As seen in other emerging ecosystems, successful startups tend to give rise to multiple additional successful startups reinforcing the growth of the ecosystem. The Lebanese startup ecosystem has only started emerging and its future is looking bright.