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Intel Invests in Jordan, Lebanon

Intel had a major presence at the World Economic Forum. But few noticed their cash infusion to three Middle Eastern Internet firms.

Arvind Sodhani of Intel

At last week’s World
Economic Forum
(WEF) meeting in Marrakech, one interesting
announcement largely flew over Western heads: Intel
Capital
has made large-scale investments in three Jordanian and
Lebanese companies.

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Lebanese VoIP firm Nymgo
received their first infusion of Intel cash, while Jordanian social
networking site Jeeran and
entertainment portal ShooFeeTV
got their second rounds of Intel funding in two years. Intel Capital
is the microchip giant’s investing arm, with a self-proclaimed
mission of “mak[ing] and manag[ing] financially attractive
investments in support of Intel’s strategic objectives.”

The exact amounts of the investments
were not disclosed. Local tech site Startup Arabia sardonically
noticed
that this was “as always for the region,” but that
the investments came out of a $50 million Middle
East and Turkey fund set up by Intel Capital.

Intel Capital’s interest in the Middle East region coincides with WEF meetings in the area–a 2009 conference in Jordan was marked by a similar round of investment. The mere fact that Intel is exclusively going after internet portals and communication facilitators will have an effect on the shape of the local start-up scene: Newly minted investors and techies will naturally want to go where the money is.

 

According to Intel Capital Middle East
and Africa Director Feroz Sanaulla, “We trust in local talent and
believe that Arabic providers should be fully equipped to supply
regional content. By investing in such companies that inspire, create
or deliver local content, we are on the right path toward a positive
future in the Middle East.”

While this is Intel Capital’s first
major Middle East investment push in 2010, an educated guess on the
cash involved can be made by looking at the firm’s two other recent
region-specific investments. In October, Intel invested
$17 million into Chinese e-commerce firm OkBuy.com
along with $23
million in investment in three Indian firms
in March. However,
Intel Capital’s India Technology Fund has over $250 million in
funding compared to the $50 million allotted for the Middle East.

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Intel Capital’s Middle East and Turkey
Fund currently handles eight regional startups. Apart from the most
recent funding recipients, other interesting fundees include
animation firm Vertex Studios
and hotel automation service provider Pulse.
Both are based in Dubai.

The fund’s prior investments in both
Jeeran and ShooFeeTV were both previously
announced at a WEF conference
. Funding for both was provided in
2009 at a conference in Jordan. Intel’s World
Ahead
program is also
active in Jordan
, where they work on a variety of infrastructure
and training projects.

ShooFeeTV’s setup is the most interesting out of the three cash
recipients. They intend to offer interactive program listings for
satellite television throughout the entire Arab world, including
diaspora communities in North America and Europe. Due to government
censorship in much of the Middle East of broadcast programming,
satellite television is wildly popular among all economic classes
region-wide. ShooFeeTV’s twist is to offer highly customized television
listings for all users–regardless of national borders — along with
large doses of online-viewable programming.

Nymgo, a Lebanese-British firm, plans
to use
Intel’s funding to accelerate infrastructure development,
enhance functionality and to subsidize advertising and promotions. A
scrappy newcomer to the VoIP field, Nymgo has made a name for
themselves recently through cut-rate
calls
to Indian mobile phones and land lines. In comparison to
larger competitors such as Skype, Nymgo has instead opted for a
low-functionality model that offers cheap calls in exchange for a
lack of video and computer-to-computer dialing.

Jeeran is one of the Arab world’s
largest social networking-only sites. They offered some
of the region’s first web hosting services
and, with their 2000
start-up date, are relative old-timers in the Middle Eastern internet
scene. As of 2010, they have more than 1.5 million members, 650,000
active websites and 150,000 active blogs. However, their user base is
currently centered on Jordan and the Persian Gulf with relatively
little penetration elsewhere. Jeeran has announced their intent to
launch a series of city portals across the Middle East.

The biggest challenge for smaller
regional specialist sites such as ShooFeeTV and Jeeran are the
multi-use portals. Middle Eastern web users largely opt for
all-in-one portals such as Yahoo’s
Maktoob
and various local sites in national markets like Egypt
and the United Arab Emirates. Intel’s investment in the region is
interesting–and their choice of investing exclusively in internet
media providers is even more interesting.

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[Image: Arvind Sodhani, President Intel Capital. Photo by John Cole/still-images.net, copyright and courtesy World Economic Forum]

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