Latest Kauffman Fellow Launches New Fund, Headquartered in West Bank
Eric Müller
Sadara Ventures—the first venture capital fund targeting Palestinian tech companies—raised capital from the European Investment Bank, Google, Cisco, Skoll, Soros, and Case; now open for business in Ramallah and investing in IT startups.
Dateline: Ramallah, Palestine, May 1, 2011.
Sadara Ventures, a new Middle East Venture Capital Fund, recently announced it has secured nearly $29 million from leading international companies, foundations, and other investors. With headquarters in Ramallah, Sadara Ventures is the first venture capital fund targeting Palestinian technology companies.
There is a significant untapped business opportunity to invest in technology-based companies originating in Palestine. Entrepreneurs until now have had almost no access to risk capital or to international markets. Sadara addresses both shortfalls.1There are also social benefits in the minds of most of our investors. These include helping create a knowledge-based economy in Palestine, stemming the brain drain, and generally contributing to development of a strong, sustainable economy. That's good for Palestine and everyone else in the region.2–Yadin Kaufmann, Kauffman Fellows Mentor and Sadara General Partner
Investors in Sadara Ventures Fund I signal the firm's global support and include powerhouse multinational technology companies such as Cisco, Google (through Google Foundation), an economic development fund run by investor George Soros, another run by former eBay President Jeff Skoll, AOL founder Steve Case and his wife Jean Case, and the European Investment Bank, among others.
The mission of Sadara Ventures—the name connotes "pioneering" in Arabic—is to identify, invest in, and collaborate with the most promising entrepreneurs operating in the West Bank and to support these individuals and startup teams over the long-term as they build world-class new enterprises. Sadara Ventures is firmly committed to achieving competitive financial returns for its limited partners (LPs). Accordingly, Sadara Ventures will focus its investing efforts on startup companies in the information technolgy (IT) sector, specifically targeting high-growth internet, mobile, and software opportunities.Palestinian IT and software exports have grown consistently over the last decade, and Sadara Ventures is founded on the principle that today's Palestine is a technologically fertile territory with a community of skilled and mature entrepreneurs who are ready and able to put capital to efficient, good use.
On behalf of the Palestinian National Authority I welcome the initiative of the Middle East Venture Capital Fund [now launched as Sadara Ventures]—backed by the European Investment Bank and other international investors.…This initiative can make an important contribution to the development of a high-technology economy in Palestine, one that is based on a talented high-technology labor pool, and encourages technology innovation and business entrepreneurship.–Palestinian National Authority Prime Minister, Salam Fayyad3
Sadara Ventures is managed by two general partners. Saed Nashef, 42, is a software entrepreneur and a Kauffman Fellow who returned to the region several years ago after nearly two decades in the United States. Saed was born in Jerusalem, worked for Microsoft for six years in the United States and is the founder and co-managing director of Equiom, a software consultancy and project-outsourcing firm with operations in the United States and the West Bank.
The Palestinian technology sector is a high-potential engine for economic development and job creation. For the first time, our vibrant community of software entrepreneurs has access to dedicated risk capital as well as strong ties to international markets and partners that will enable these entrepreneurs to compete on the world stage.4–Saed Nashef, Kauffman Fellow and Sadara General Partner
Saed's partner at Sadara is Yadin Kaufmann, 51, a longtime venture capitalist in Israel and the United States and Mentor for the Kauffman Fellows Program. While not directly related to U.S.-based Kauffman Foundation founder Ewing Marion Kauffman, there is no doubt Yadin is strongly related to "Mr. K" in spirit. Yadin was involved in the management of Israel's first venture fund, Athena Venture Partners, and is a co-founding partner in the early Israeli investment firm Veritas Venture Partners (established in 1990). He is also founder and chairman of Tmura, the Israeli Public Service Venture Fund (an affiliate of the Silicon Valley-based Entrepreneurs Foundation), and an investor in Mercury Interactive and M-Systems Ltd., among other companies.
If you wait for the perfect time to invest in a fund in the Middle East, you probably never will. There was a time when people thought that investing in Israel was too risky—and the people who thought that way missed out on an opportunity to make a lot of money.5–Yadin Kaufmann, Kauffman Fellows Mentor and Sadara General Partner
One way that Sadara Ventures will serve entrepreneurs is by providing awareness and access to members of the global Society of Kauffman Fellows—a network of innovation practitioners and venture capitalists operating in forty countries, across all sectors and stages of science and technology investing. Kauffman Fellows are committed to expanding into emerging markets and new centers of innovation, and sharing best practices that flow to and through these emerging markets and technology hubs.
The Society of Kauffman Fellows represents a worldwide trading platform focused entirely on innovation. Ideas, opportunities, and resources quickly gain visibility and efficiently attract attention and refinement. Why does it work? Because the Mentors, Fellows, and partners who make up our network trust each other at a deep level. All share the goal of sparking new companies and recognize that this fundamentally requires transparency and collaboration. We have been thrilled to lend our support to Saed and Yadin when Sadara was just an idea in their minds, and we now look forward to the great things Sadara will accomplish."6–Phil Wickham, Kauffman Fellows President and CEOVenture capital is a vital element in building the early stage ecosystem that enables entrepreneurship and innovation in emerging markets. With the support and reach of the Society of Kauffman Fellows, and the backing of organizations like Cisco, Google, Skoll, and Soros, Sadara Ventures is beautifully situated to be an effective hometown source of capital, a gateway to global markets and opportunities, and an insightful local partner for global co-investors."7–Shari Loessberg, Senior Lecturer, M.I.T. Sloan School of Management
Given the turmoil and political uncertainty in the broader region, the Palestinian-ruled areas may seem an unlikely place to invest in startup companies. Yet Sadara's Fund I is beginning to evaluate investment opportunities, and General Partners Saed Nashef and Yadin Kaufmann see in the emerging Palestinian IT sector many of the characteristics heralded in the early days of Silicon Valley. The area boasts a dozen institutions of higher education with engineering programs, including Bierzet University in Ramallah, Al-Najjah in Nablus, and Al-Quds University in Jerusalem. In addition to these local schools, many young Palestinians who study abroad in Western universities are committed to coming back to Palestine to contribute in business and society.
Just as Israeli companies have done very well even in times when the areas around them were undergoing very significant challenges, Palestinian entrepreneurs can function and thrive in a challenging regional environment.8–Yadin Kaufmann, Kauffman Fellows Mentor and Sadara General PartnerThe challenging environment in Palestine, like that in several other regions of the world, has created a strong demand for a new kind of product and market innovation. Sadara Ventures and its affiliated global network of Kauffman Fellows bring a unique set of knowledge and skills, which when shared with entrepreneurs, investors and policy makers in the region, will serve as a catalyst for large scale sustainable economic growth.9–Ade Mabogunje, Senior Research Scientist, Stanford University School of EngineeringI'm an optimist. You have to be an optimist to do what we're doing. The upheavals are ultimately going to produce a better Middle East than we've known in a very long time. The new reality will go hand in hand with a new knowledge-based economy.10 Palestine has many strong educational institutions and thousands of highly skilled experts in software and telecommunications. It has a culture of entrepreneurship, and a culture and drive to make and build something.11–Saed Nashef, Kauffman Fellow and Sadara General Partner
Sadara Ventures is looking for entrepreneurs who think big: Sadara will make two to three new investments per year, allocating between $2 million to $3 million per company over time, with the aim of creating a portfolio of 10-15 high-growth companies. Generally, Sadara expects to hold its stake in a company for four to seven years before selling its shares to another company or floating them on the stock market.Their vision and optimism are shared by the strong financial and industry partners who have aligned to support Sadara in their mission.
We are looking forward to supporting, through our involvement in Sadara Ventures, the development of innovative Palestinian technology companies.12–Yoav Samet, Cisco Senior Director for Corporate Development, Europe and Emerging MarketsThe successful launch of this fund sends an important message across the region. The fund is expected to make a key contribution to the development of the local technology and financial sectors through combining international industry experience and risk capital, with the untapped talent pool and entrepreneurial energy in the Palestinian territories. I am delighted that EIB [European Investment Bank] is associated with such [an] initiative.13–Philippe de Fontaine Vive, Vice President, Mediterranean partner countries, European Investment Bank
About Sadara Ventures
Sadara Ventures is the first venture capital fund targeting Palestinian technology companies. Headquartered in Ramallah, Sadara Ventures will identify, invest in, and collaborate with the most promising entrepreneurs operating in the West Bank and support these startup teams over the long-term as they build world-class new enterprises. Firmly committed to achieving competitive financial returns for its limited partners (LPs), Sadara Ventures is managed by Saed Nashef, a veteran software entrepreneur and Kauffman Fellow, and Yadin Kaufmann, a longtime venture capitalist in Israel and the United States. Fund I investors include Cisco, Google, Skoll Foundation, Soros Economic Development Fund, Jean and Steve Case, and the European Investment Bank. www.sadaravc.com
About the Society of Kauffman Fellows
A network of innovation practitioners and venture capitalists, the Society of Kauffman Fellows is operating at 240 venture capital, corporate, government, and university investment organizations in 40 countries, collectively investing $80 billion in innovation capital. Commencing each summer, the latest class of 30 Kauffman Fellows engage in a practical 24-month apprenticeship that includes quarterly sessions in Palo Alto, California, field research projects, mentoring and coaching, and industry and regional events. During the fellowship, Kauffman Fellows work full-time at venture firms or related organizations committed to building innovative, high-growth companies. Inspired by Ewing Marion Kauffman and his legacy of shared ownership, accountability, and experimentation, the Society of Kauffman Fellows measures success in enduring new businesses that generate long-term returns for principals, investors, and society as a whole. www.kauffmanfellows.org
Eric Müller
As Entrepreneur-in-Residence and previously Chief Operating Officer at the Center for Venture Education, Eric works closely with the venture capitalists who make up the Society of Kauffman Fellows. A veteran of several startups, Eric currently serves on the Board of Vancouver-based portal company The Level. Eric was CEO of the Java performance company Optimizeit, which grew to thousands of customers before being acquired by Borland. Earlier Eric worked with Guy Kawasaki at Garage Ventures, investing in the founding teams of Pandora, Psionic, and Gravitate. Previously, at Andersen/Accenture and Arthur D. Little, Eric worked with a range of technology firms on new product efforts, marketing and sales. Along the way, Eric's views have been published in the New York Times, the Washington Post, and MIT's Sloan Management Review. Eric earned a BSEE from Carnegie Mellon and an MBA from Yale.
1 Robert Daniel, "Google, Cisco back Palestinian VC fund: Sadara Ventures seeks to build startups in the Palestinian Authority," (6 April 2011), para. 6 with changes approved in personal communication, April 2011.2 Ibid., para. 8.3 Salam Fayyad, open letter of support dated 28 December 2009.4 Interview by author, 17 March 2011.5 Daniel, para. 3.6 Interview by author, 17 March 2011.7 Interview by author, 18 March 2011.8 Daniel, para. 19.9 Personal communication, April 2011.10 Daniel, para. 20.11 The Next Silicon Valley, "Palestinian Fund Bets on West Bank Tech Potential," para. 5.12 Mickey Bergman, "Palestinian Technology Venture Fund MEVCF Launches Operations Securing $38.7M," (9 March 2011), para. 7.13 Ibid., para. 9.
.png)