RAMALLAH — In this Palestinian city in the central West Bank, some 300 technology companies employ at least 4,500 people. Despite enormous potential, the industry is still nascent and suffers from a lack of development centers and productive ties with the outside world. Most of the companies in this Palestinian Silicon Valley are still small and mainly offer support services to other domestic companies and institutions.
But enter Sadara, a venture capital outfit that successfully raised $30 million from foreign companies. In Ramallah, the administrative capital of the Palestinian National Authority, there are already two small venture capital companies, Siraj and Abraj, which also invest in other areas.
Sadara’s success makes it the first serious venture capital group in Ramallah.
The list of Sadara investors is impressive. They include Google, the investment fund of George Soros, the European Investment Bank, the Skoll Foundation and the Case Foundation. The software giant Cisco has invested $5 million.
According to Zika Abzuk, CEO of Cisco Israel, “Sadara was created at the perfect time to be a cornerstone in the foundation of the Palestinian technology industry.”
Heading Sadara are two entrepreneurs: Palestinian Saed Nashef and Israeli Yadin Kaufmann. The Israeli’s involvement raised suspicion in Ramallah, but Sadara’s investments prove that it isn’t interested in politics: The company invests only in the Palestinian economy.
Sadara’s first two investments were in technology companies designed for Arab societies. The first was in Yamsafer, the Arab version of Hotels.com, which provides travel software for 22 countries, including Turkey.
The second investment was in Souktel, a company that developed a way for job seekers and employers to communicate through text messaging. The company is based in Ramallah and was founded by Canadian Jacob Korenblum, who knows well both the Arab world and the unemployment phenomenon that is particularly problematic for younger workers.
According to Korenblum, while there are hundreds of thousands of unemployed people in every country, there are also many available jobs that younger job seekers simply don't know how to get. Korenblum’s company is trying to change that.
The investment in Souktel was less than $1 million, but Sadara aims to endow companies that are just starting out — not necessarily those that have already established some measure of success. And that’s exactly what the Palestinian technology market needs.
Kaufmann, the Israeli half of Sadara, says that the company's investments are important not just for Palestinians but also for Israelis.