DASH Ventures is fast shaping up to be a major player in the venture capital field.
By Sadad Talhouni
Photography by Alaa’ al-Sukhny
DASH Ventures is a micro venture capital firm that focuses on early stage investments. Since it was founded in 2011, it’s managed to build up an impressive portfolio, which includes the likes of Arabia Weather and Kharabeesh. The firm’s Managing Director Omar Sati, who was previously Venture Principal at IV Holdings (now Silicon Badia), is excited to see more and more solid investment opportunities cropping up in Jordan and across the region.
What sets DASH apart from other VCs?
We work very closely with other VCs in Jordan and the region, and while I don’t think there are VCs that are particularly better than others, I do believe that some VCs are stronger in certain operational and strategic aspects. I prefer to think of ourselves as being extremely active, involved, and entrenched with our portfolio companies and their founders. I like to think of myself as an extra employee that they can call on whenever necessary. What also makes us different is that, while technology is at the core of our strategy, we invest in other sectors as well. We’re exclusively entrepreneurial. Out of the 14 companies in our investment portfolio, we have four that are non-tech. We have a retail arm represented by Project Lifestyle focused on high-end regional brands, and a renewable energy arm through our investment in E2E, which is a clean tech solutions provider headed by [former minister of energy and environment] Khaled Irani. We also have a creative industry arm, where we’ve invested in exciting local projects that include a musical/opera and a feature film.
What qualities must a company have before you consider investing in them?
There is a formula. You look at the team and their track record, you look at the product and the market, and you look at the timing. The team and the founders are definitely the most important piece. They have to mesh together. I also tend to prefer two to three cofounders as opposed to sole founders in most cases. That way, you avoid having the future of the business and everything that entails running a startup falling on one person’s shoulders. When you look at the product, you have to make sure that it fits a market need that it will grow fast enough to accommodate for a large sustainable business. Nobody in venture capital is investing in high risk assets for small returns. They’re looking for companies that, within five to eight years, are going to be worth over $100 million. Another important factor in assessing a company is timing. You might have a great idea, but it could be too late or too early for the market. A perfect example of this is crowdfunding. I love the concept, but I don’t believe the regional market is large enough, nor growing fast enough [for it]. But it will get there.
We’re seeing a lot of VCs now looking for opportunities in the Gulf. What does this shift in interest away from Jordan mean?
I don’t think anything is shifting away from Jordan. I think what you’re seeing is more opportunities coming from Dubai and Saudi mostly, not the entire Gulf. Back in 2011/2012, most of the attractive opportunities came out of Jordan. After 2012, other cities began picking up. Over the last two years, the startup ecosystem in Dubai has flourished. Last year, out of 10 opportunities, seven came from Jordan, and the remaining three from other geographies such as Turkey, Saudi Arabia, and Dubai. Today, out of 10 opportunities, half are coming out of Dubai. In terms of expanding investments into other territories outside Jordan, I believe Dubai is the natural and most logical next step, Beirut, as well. Meanwhile in Jordan, we’re already starting to see more sophisticated entrepreneurs, with extensive and relevant operational experiences having worked with existing successful startups and founders.
You’ve expanded some of your later-stage companies into the Iraqi market. How is the unstable situation in the Middle East affecting you and other VCs?
The situation in the Middle East is what’s making it more attractive to take a leap of faith and make these investments. It is in times when there is some fear, when the economy is stagnant, that one should start putting their money to work with private companies, particularly startups and small businesses. During bad economic times, public markets are first to get effected. Therefore, it is during such hard times when one should focus on building one’s own business and be fully prepared for an impending turnaround. You want to be in a position ready to take advantage of economic growth when it comes.
What sectors do you think are showing most potential for growth?
The sector with the highest potential to scale, grow quickly, and make lots of money, if executed properly, is definitely the tech sector. That’s the beauty of it: scalability. But I think the sector in which you are most likely to monetize quickly is the renewable energy sector. It’s not a scalable business and requires a lot of capex, but they generate money because there is high demand and an urgent need. If you tell a mall, hospital, or bank that you can help them save 30 to 40 percent of their annual electricity bill, who in their right mind would refuse such an opportunity? But again, it is not easily scalable. We’ve expanded operations into the Iraq and UAE markets, and in the process, utilized a lot more capital and resources. It’s an expensive growth.