More than 40 Small and Medium Enterprises (SMEs) in the technology sector are in the pipeline to receive equity funding from banks, according to the Central Bank (BDL). Investments in technology startups have exceeded the $200 million mark since the issuance of Circular 331 by BDL, in 2013.
BLC Invest plans to invest $6 million in eight technology companies. “We have studied five companies and are awaiting BDL’s approval. In the meantime, we are reviewing three other companies to submit later,” said Fouad Rahme, BLC Invest’s General Manager. Rahme did not mention the name of the applicant companies, but said that their activities include “video-on-demand, augmented reality, software development, applications, healthcare, e-commerce, and services.”
“Banks are following up new funding requests by these SMEs, very seriously,” said BDL Governor Riad Salameh. The Central Bank’s strategy is to create more synergy between the financial sector and other sectors, especially the technology sector,” he said.
Circular 331 stipulates that BDL will guarantee 75 percent of any bank’s equity investment in a technology company.
BDL also backs local accelerators, such as the UK-Lebanese Technology Hub, launched by the British Embassy. Fifteen knowledge industry startups will be selected this year to travel to London, where they will have the opportunity to develop their products, meet professionals, explore potential venture capital partnerships, and pitch for investment.
According to Salameh, more than 100 applications have been received by this Technology Hub. “This is very promising, bearing in mind that this accelerator only began operating two months ago,” he said.
More than 300 companies are involved in the Information and Communications Technology (ICT) sector, with more than 7,000 highly skilled human resources, according to the Ministry of Economy and Trade (MoET), which estimates this sector to be worth $570 million by 2017.
“ICT is a fast growing sector and is mostly dominated by SMEs engaged in the development of software products and mobile applications,” said Jassem Ajaka, Economic Affairs Adviser at the MoET. “Lebanon is emerging as a leading exporter of software products and services. This should give us the incentive to further enhance the entrepreneurial ecosystem and increase investment to develop the sector’s infrastructure,” he said.