Samih Toukan is the chief executive officer of internet firm Jabbar, owners of some of the region’s best known websites. The Jordanian entrepreneur was first propelled in the limelight for his project, Maktoob – an Arabic internet portal.
Toukan founded Maktoob in 2000 in partnership with Hussam Khoury. Ten years later, the website was sold to US internet giant Yahoo for $175m – the largest amount ever spent on a website in the region. The deal has become an example for a legion of internet entrepreneurs in the region and continues to inspire many students looking to make their wealth in the technology sector.
“The idea behind Maktoob was to create the first Arabic email. At that time, there were just a few thousand internet users in the Arab world. Internet penetration was very small and people didn’t believe that Arabic would grow online. They thought that users would continue using it in English, but we proved them wrong,” says Toukan.
Today, there are about 72 million internet users in the Arab world, they make up 3 per cent of the internet population and with increased investment in infrastructure from governments, it is one of the fastest growing regions in the world in terms of internet take-up. But Arabic content, particularly content of high quality, is still lagging behind. And that is where the opportunities lie in the region.
“The entrepreneurs with great ideas are there, but proper financing is missing. There is more interest after Maktoob. Probably the amount of money invested in the sector within the past two years is more than the levels seen 10 years prior, when Maktoob started out, so we are seeing acceleration, but there is still an absence of proper venture capital funding. There are a few initiatives on a very start-up seed level, but the typical venture capital culture and investment seen in the West is non-existent,” says Toukan.
According to Toukan, one of the biggest barriers to the growth in the sector is the culture.
“People prefer traditional investments, they want to see something physical. Technology and internet investments do not make money and have to wait many years before we see results,” he says.
For Toukan, the talent stretches across the Arab region, but some of the countries stand out more than others.
“Relative to its population, Jordan is ahead of the region in terms of ideas. Jordan is not a rich country, but it is rich with talent. The government has played a good role in supporting the IT sector. In the Gulf, money was being invested in the wrong direction in real estate and property, which is needed, but if one per cent of that had been invested in technology, we would have seen more results,” he says.
Attitudes are changing across the region as more investors, both locally and internationally turn to the Middle East & North Africa. Toukan is looking to set up his own venture capital fund focusing on Egypt and Jordan.
“It is the beginning, but when the ecosystem grows with the funding, the ideas and the mentorship, you will have more Maktoobs very soon. It took us 10 years, but it will not take 10 years for the next one,” says Toukan.
For now Toukan is focused on growing Jabbar, which has seven internet companies under its umbrella.
“Jabbar was a result of the acquisition of Maktoob by Yahoo. We had certain assets that we had developed like souq.com and cashu, which is an alternative payment method online, that was not sold to Yahoo,” says Toukan.
Group buying website Cobone, online retailer Sukkar and travel website Joob are also part of the Jabbar group and the company will be launching another initiative this year that combines e-commerce with e-learning and will be launched initially in Jordan.
“We are focusing on e-commerce as we believe it will grow. Jabbar now is double the size of Maktoob in just two years. With Maktoob, we were focused on content and advertising, but now we are focused on business to consumer e-commerce,” he says.
The e-commerce sector in the region is still very much in its infancy and credit card penetration in the region is still low. “There are challenges. Logistics, customs between Arab countries and payment are all challenges,” he says “These challenges are opportunities, when we solve these problems, they break down barriers.”
Jabbar enables different payment methods for its services including Cashu, Paypal and cash on delivery.
Despite the volatility in the region, Toukan believes now is the time for the internet sector to flourish in the region. “This is a new beginning for the region and in terms of the internet we will see growth and more investment,” he says.