Tech Incubator Focused on Arabic-language Apps Planned for Haifa

Initiative aims at addressing the capital shortage that blights the Israeli-Arab startup scene.

Venture capital investor Chemi Peres, the Jerusalem Venture Partners fund and Israeli-Arab entrepreneur Imad Telhami are planning a technology incubator for startups developing Arabic-language Internet, media and mobile tools, TheMarker has learned.

The incubator, which will be aimed at Israeli Arab entrepreneurs, will mostly likely be located near the port area in Haifa and will accept projects at a very advanced stage. MK Erel Margalit (Labor) was a partner in leading the initiative, along with Peres and Telhami, before he was elected to the Knesset.

As well as providing office space and services, the incubator will invest in the startups it hosts, with sums ranging from tens of thousands of dollars to hundreds of thousands of dollars. All told, several million dollars will be invested in the project.

The backers of the incubator, along with Israeli-Arab businesspeople, are in the final planning stages and raising funds.

Telhami was the founder and CEO of Babcom Centers, a provider of call center and software development services that was bought by Matrix. Babcom employs about 1,350 prople, 70% of whom are Arabs.

Over the last two years, the startup scene has begun to blossom in the Arab community, but Arab entrepreneurs face multiple barriers to building new business, one of the most important of which was a lack of capital, especially at the earliest stages.

Cultural and language barriers are an enormous challenge to multinational technology companies trying to enter the Arab market, presenting a unique opportunity for local Israeli Arab entrepreneurs to serve as a bridge. Startups addressing the Arabic-speaking population in Israel can make use of local business knowledge, while at the same time entering untapped markets in the Arab world.

Internet and smartphone use among the Arab world’s 350 million people is still relatively low. A survey by the Dubai School of Government found that only 125 million people in the Arab world use the Internet, but the growth rate is a high 30% a year. Over 53 million people in Arab countries are active users of social networking sites and Arabic is the seventh most popular language on the Internet, estimates the website Internet World Stats.

Haifa Port