Ladies and gentlemen, please take your seats.
The show is about to begin. James, let's put on a show.
Excited for this? Welcome to another exciting
episode of Golden Nuggets with me, your host Sylvia El Dowie.
Today I'm joined by none other than James Evans, who is the
Chief Financial Officer at Holo, which is one of the fastest
growing prop techs in the MENA region.
Welcome to the show, James. Pleasure.
Now James is not only ACFO finance expert, but also deeply
passionate about the MENA startup ecosystem.
So you've got over a decade of experience in early stage
company management, fundraising, financial strategy, and you're
uniquely positioned to offer us some golden Nuggets on what it
takes to scale a start up and navigate the complexities of
this evolving proptech landscape.
So to kick things off, the question I ask every proptech
startup is what problem was Hollow solving for?
Yeah. I mean, thank you for the intro.
So hello solves transparency in the home buying process.
That's first and foremost what we're trying to solve.
Sort of historically, if you've gone out to get a mortgage or
you're going out to buy a home, the process of going to the
individual banks, going to four or five banks, getting all the
rates, understanding all the rates has been an extremely
complicated process and it has next to no transparency.
So first and foremost, Hurlow solves that.
If it's all of the rates that you're eligible for, all of the
bank products you're eligible for in front of you in a nice
easy digital platform. And then on top of that, we've
started to techify the home buying process, that actual
interaction with agents, interaction with properties.
So when we think holo, it's really can we digitize, can we
create more transparency in the home buying process?
And just generally, can we make it a better experience for
people so. It's holo, not holo.
Yeah. So it stands for home loans.
It's a holo. I didn't even think about what
it could have meant, but that makes sense.
Everyone asks and no one ever gets it right.
I think Michael, the the founder of Holo was saying that
historically they probably asked 100 people and one got it right.
I can imagine, no, I would. I would have never pieced the
two together. OK, now the Proptex space is
extremely competitive, especially here in the MENA
region. What would you say sets Holo
apart from the rest? Yeah.
I mean, great question to ask the CFO of the business.
What really sets us apart is unit economics.
So what you see generally in the VC space is you have these
companies that grow accelerated rates, they burn accelerated
rates and a lot of them will exist on negative or extremely
slim margins. Holo has been built a bit more
intentionally than that. So the business has been around
for just over four years now. And from the very start, it was
focused on how do you create a profitable business out of this
space and how do you create a business that scales well,
that's operationally efficient, that has unit economic
efficiency. And still to this day, even at
the scale we're at, it's still such a huge focus.
But we've never really been sort of pushy on let's try and burn a
bunch of money and, and try and grow as much as we can.
It's always focused on how do we get those VC level growth, but
how do we do it in a sustainable manner?
And I think the, the other thing that really sets us apart is, is
that MENA focus, right? When you look at prop tech in
this region, there's always Europe, there's always the US,
which are super attractive markets, right?
Huge amounts of capital, huge Tams as well in those markets.
TAMS is a total addressable market.
Yeah, it's basically how much revenue could you earn if you
had every customer in the market.
So when we look at Europe and the US, it's obviously it's
huge, OK, brilliant, but it's also hyper competitive spaces.
So yeah, we're just very focused on staying in MENA, being in
MENA company, the founders have been out here for a long time.
They want to contribute to the region, they want to help with
that growth. But when you sort of combine
those two things, it was how do we build a great business in the
UAE that can support itself and then look for geographic
expansion rather than rush into geographic expansion chasing big
top lines. We said no, let's build a good
sustainable business in the UAE that is growing at a very fast
pace. And let's have that platform to
then go after new markets. But let's focus on MENA.
Let's not go chase the huge tickets elsewhere because
although the guys come from the UK, they understand that
mortgage market extremely well. It just doesn't make sense,
right? You build a geographic business.
Why go and compete with Habito in Europe or compete with Rocket
Mortgage in the US when we can stay in an uncompetitive
environment? So where's next, Saudi?
Yeah, I mean, or. Egypt.
We're officially not allowed to say, but it's it's definitely a
big, big neighbour. OK.
And Speaking of expansion and scaling, what would you say are
the biggest obstacles when it comes to scaling?
A prop tech or a start up even? Yeah.
I mean, I think to not talk about the operational side,
right, That's a, that's a headache in its own right.
Can you find the right team? Can you find a good office?
Do you have a good GTM? The big stands for go to market
so. Sorry, like us in Startup Talk.
Yeah. Yeah, I think I'm, I'm getting a
habit too often of using acronyms.
But when I look at it financially, it's sort of how do
you balance top line growth along with creating sustainable
companies. So when you're VC backed, you
always get that push from VCs to chase top line or chase growth
in any manner, be that headcount growth in the number of
employees or getting bigger GM VS and bigger top lines.
And it's sort of, but ignore the rest of it, right?
Ignore everything below that. Line just grow by any.
Means grow. But the reality is that doesn't
work for a business, right? You need to concentrate on the
bottom line. You need to have a path to be a
profitable business. You can't just be someone who
loses money for 10 years, right? We're not all Uber.
We don't all get that grace. So how do you balance that,
right? And how do you make sure that
you're 1, enabling the business to go after that growth and
you're allocating spend in the correct way.
But at the same time, you're not spending like crazy, you're not
blowing your runway on some big marketing campaign or a brand
new office or whatever it may be.
So really it's that, it's how do I enable the business to grow,
but at the same time maintain that financial integrity of the
business that quite honestly, that sort of argument and the,
the conversations that exist around that is, is 90% of my
day. It's just talking to people and
saying, no, you can't spend $1,000,000 on a marketing
campaign. But yeah, you can spend 200,
right? And and finding that balance and
trying to push the team to do a little bit more with a little
bit less. And there is like chita chatter
about startups in the region focusing more on fundraising
rather than actually solving problems.
What's your take on that? Yeah, I think as a region within
startups, we've been very focused on the optics.
We're great at PR, great at raising money and we're great at
doing that side of the business, right, where everything looks
brilliant from the outside. But it for me it raises the
question of why do you need to raise that much money, right.
And I say this for well known that I'm someone whose primary
job is to go out and raise money for startups.
But when I look at our space in particular, right when you look
at prop tech, unless you're in the rent now pay later space or
in massive capital infrastructure, you don't need a
huge amount of money to raise the business.
And it's not that I'm saying people shouldn't have raised
that much because I get it from the founder side.
Money is on the table. Take it while it's available.
But if you're building a property platform, why do you
need thirty, $40 million? All that's going to do is
encourage you to spend thirty, $40 million, right?
And it's going to influence your decision making.
I think startups would be better focused sort of saying, OK, let
me raise a $15 million Series A, let me build off that.
Let me get to a Series B where I then raise maybe 30-40 because,
one, I'm now in enough markets to justify that kind of spend.
Two, I've probably got a very good handle on my unit
economics. I know where to spend capital.
I know what works. So I think it's great.
It historically attracted a lot of interest in the ecosystem,
but now we really need to be focused on building good
businesses. And I think rather than saying,
if someone fundraises, you're going to see a LinkedIn
announcement about it and people are going to go crazy and you're
going to see 300 LinkedIn comments on it releases.
But if someone signs a massive partnership deal, that's going
to be huge for their business, you're going to see 10 comments.
It's going to be 9 of their friends and their mom because
they're the ones who've heard about it.
But that's the stuff we need to be celebrating in the ecosystem,
right? This business is becoming
genuine businesses, not a business that's great at
fundraising. You don't start a prop tech to
be good at fundraising. You start a prop tech to make
innovation in the property business.
So we need to be better at celebrating that side of it.
As much fun as it is to celebrate huge raises and say,
great, someone believed in my business enough to give me $50
million. Great.
But what are you going to do with the 50 million?
Every time you raise money, the founders get diluted.
They earn a little bit less of the business.
If you have an employee share program, they earn a little bit
less of the business every time. So that potential exit for you
as a founder gets smaller every time you you raise, obviously
you're getting higher valuations and your exit becomes more
likely. But you need to marry that,
right? How much of this business do you
want to earn at the end of the day?
And how much do you want to earn at an exit?
And on top of that, it's just, I always come back to the point of
if you have $30 million, you're going to spend $30 million.
If you have $15 million, you're going to spend $15 million.
And the reality is for an early stage company, the difference
between 15 and 30 in terms of actual business success is very
minimal. All that it means is someone who
raised the smaller amount is going to achieve this kind of
number with $1,000,000 marketing campaign.
You're going to achieve the same number with two and you just
spent two because you had it. So I think we do need to focus
on that more. And I think you're starting to
see a shift away from that. Like we're seeing more founders
now, bootstrap companies for longer.
You're starting to see people look for different ways.
They're not going after that massive hyper growth, which is
brilliant. I think there's a huge place for
ecosystems to evolve and more of those lifestyle businesses to
come up. But if you are a genuine company
that requires VC backing, if you're going after aggressive
growth, then yeah, go out and raise the money.
Raise the right amount. Don't go out and raise huge
amounts of money just because you can or because you have
those VC connections and you can get it done.
No. Raise the amount that's correct
for the business. Do you think it's more of a kind
of puppet show, like for the next round, you know, press
release picture of the founders we raised X.
For sure is like it's to put you on the map, right, Because one
of the things you you see in Mina is we have a funding gap at
sort of series B plus, right? Mina VC is a great seed stages
Series A. There's no one really right in
those massive B checks. You're seeing more of it now,
but it's historically, it's not massively existed.
So for startups to get to that next stage, they had to attract
the European investors, they had to attract the US investors.
And you kind of did that with your fundraising announcement.
But there's other ways to do that.
You can get those European investors in sooner.
You can do it with the outreach, You can constantly update them.
And I know from experience that if you go out to a European
investor and you say, hey, like our last round, we raised $30
million. Or if I get to 1 and say, hey,
we're a profitable business. Post series AI know which of
those businesses is easier to get a second check for.
Like the profitable business is, is so easy to raise and you're
in a really comfortable position where you're not worried about
the next raise because, OK, if we don't raise or we don't get
the valuation we want, that's great.
We, we're just going to walk away from this and we're going
to continue running the business.
Whereas if you're in that you've raised that huge amount of
money, your burn has got super high, you're spending $1,000,000
a month on whatever. Now you have to raise right?
And you're pushed into that corner of being like, I have to
have to raise now or the business shuts down.
Whereas if you've potentially done a small around expenses
don't get as big, perhaps you get profitability.
OK, then it's your choice. And the amount of leverage that
you can have in VC conversations in that scenario is brilliant.
If I'm now hello and I'm talking to an investor and they say, you
know, like your valuations here and we had it here, cool.
I'm going to walk away from the round.
I'm going to go keep running the business because we can pay for
ourselves. And if you think we need more
time to grow into that valuation, brilliant.
We have all the time in the world.
So we're going to go away. We're going to grow into that
valuation. But at the same time, this might
be the best price you ever get the business at.
So next time we come to you for fundraising, we've just
continued being a profitable business.
We've continued growing. The price is significantly
higher now, which means the founders again get to retain
more of their equity. And then that exit view gets so
much better. So that's why I say I think
fundraising has a place. It's hugely important for the
ecosystem, especially to get companies off the ground to
access that hyper growth, right. You can't bootstrap hyper
growth, it's impossible, but raise the right amount.
You know, I mean, I, I speak to a lot of brokerage CEOs, I speak
to a lot of prop tech startup Co founders, Co founders and I, I
like looking from the outside in.
There's way more collaboration and cooperation that goes on the
brokerage side rather than the startup side.
I think there's still a bit of kind of, you know, not secrecy,
but you might have your cousin start up or you know, some the
founders that you know, but there's very little
collaboration or in that space. Like where do you draw the line
between collaboration and competition?
So for me, I, I think there needs to be more of it, right?
The one that people are always scared of.
If you talk very, very early stage, people are scared to tell
people their start up idea because they're scared that
person's going to go and build it.
Everyone has an idea. One in 100 actually execute and
go and do their idea. So don't even be worried about
that, that that's just noise. Talk to people about your idea,
get that feedback. It's going to improve the
business. You're going to shop it better.
I think the reason there's people that don't even want to
send their decks, like don't know if someone might see all my
yeah. It's crazy to me that I had a
starter fan that asked me if he should send an NDA before
sending a deck and I'm like you do that that V CS never opening
that e-mail. So don't worry about sending the
deck just send the NDA because you've you've closed that
relationship already. And also if you're in the VC
space, if you send your deck, assume the moment you send it
everyone in the market has seen it.
Like down to your grandma. She has seen it because V CS
they will send it around but collaboration?
They're like the Daily Mail, aren't.
They, they are. And The thing is, you're not
putting anything in a deck that's so proprietary.
If you are change your deck, why You're putting proprietary
information in a pitch deck. But it's like, if someone can
see your pitch deck and then execute your idea better, then
you're probably not that good, right?
Like either the idea is not great, it's not defensible, or
you're not a great founder if you can't defend against that.
The collaboration between startups, I think part of it
comes from capital availability. People are kind of worried, oh,
if that guy does really well, I'm raises, there's no money
left for me. I guys, you're talking about
$100 million funds and $1.00 checks.
You know, there is money for people here, especially for good
ideas. And if you have that more
collaborative ecosystem, we all win.
So you look at somewhere like Silicon Valley, right, which is
historically the home of startups, huge amount of
collaboration. You look at something like the
PayPal mafia where everyone worked in one company, they will
spread out, go start their own companies.
All of those people are still talking to each other, They're
still getting ideas from each other, and they're still
improving. So if there's someone who's in
direct competition with you, yeah, obviously don't talk to
them. But people are so against the
idea of getting ideas from other people.
Like I work in the project space.
Before that, I've worked in HR tech, I've worked in fintech.
Even within prop tech, I'll still talk to guys that I know
from fintech and HR tech because they still have ideas, right?
There's ACFO that I'm very close with who works in an HR tech
company. He and I can have that sharing
of ideas because we're not really competing for the same
capital. We're not competing in the same
space. And honestly, without those sort
of connections, I would be a significantly worse CFO.
So I think we need more of it because it's tough being a
founder. It's really tough, especially if
you're not one of those founders who comes in hyper connected or
has those connections to the VC network or whatever it may be.
We need to support each other because the better the ecosystem
does, the more capital that comes to the ecosystem, the more
good companies come, the more talent there is.
This is how we grow. They can't just be 1 winner in
the ecosystem, which is at times what it feels like people are
trying to do. Like they want to be the sole
winner in the startup space and it's like, great, but it's going
to be a terrible ecosystem if that happens.
And and that's the, that's the thing that I think is missing is
maybe perhaps feedback on VCs like, you know, some that are
showing all this interest and then at the last second they
pull out like we need to tell this ecosystem about this
player, you know, that maybe they're not working in the right
way. So I think holding them
accountable as well that we are a network, we will feedback to
each other when you don't come through on your promises.
Oh, for sure. I mean, I think there's a lot of
VCs that maybe don't do it the right way just in terms of how
they treat founders and sort of how they treat deals.
That gets around to some extent. But again, I think because of
the limited number of VCs you have here, people are always
going to still talk to them. I think the more VCs that get
established in the region, people can get a bit more
selective with that stuff. And I do agree, if you shared,
more people would get held accountable.
VCs would have to change how they approach start-ups.
Make make the start-ups sign Ndas.
Yeah. And it's, it's funny, Ricks,
whenever I talk to founders, they're always like talking
about like how they're treated by VCs or things like that.
And you've always got to remind them like they're investing in
your business. You are the one selling a very
good business here, provided it is a good business.
You should feel that way. Like the not only are you trying
to get these people to invest in you, but they're trying to court
you as well for the opportunity to invest in your company.
And I think now at the current stage of MENA, that power
imbalance isn't quite equal. It's still a bit more in the the
VCs hands, whereas you look maybe globally more mature
startup ecosystems where you have more good companies.
They do hold a bit more leverage in that regard.
But definitely, I mean, there's a few VCs that that I maybe tell
people not to speak to. But again, if you have to get
capital, you have to do the rounds, you have to speak to
everyone. And you tapped into talent pool.
Do you think we're quite limited in this region when it comes to
a lack of tech talent? You know, when we compared to
Silicon Valley. Or yeah, I think we have
historically struggled for talent.
And if you look at the more established regions, like what
created that initial talent pool, it was the universities
that are around, right? So if you're in Silicon Valley,
you have places like Stanford, MIT isn't super far away.
So you have that tech talent. We historically haven't been a
tech region, right? I mean even the region as a
whole is still fairly young and the start up ecosystem here is
even younger than that. So what you saw was we had great
business founders, great problem founders, but you didn't have
the tech. We're seeing more of that come
now. And I think that's just capital
availability. Like there's a lot of start-ups
here being funded. There's a lot of capital
available in the region. So you are beginning to attract
that outsourced talent. And also we're sort of in the
first full cycle now where you're starting to see exits.
So you had Kareem, you had Suit, you had Swivel, you had a hammy
Tabby is obviously doing phenomenal.
What you're going to see out of those exits is the people who
worked in those funds go out, start their own businesses,
which is great because now you don't have one company that has
five really talented people. You have 5 businesses that have
five really talented founders. And that will continue to
attract more talent. I think the the governments out
here have done a lot, especially on the education system of
getting sort of software engineering more into schools,
more into the universities. People see it as more of a
career path now. So I think the talent will come.
We just have to be patient with it.
There is some supremely talented people in the region.
There is a couple of tech hubs around.
So you have places like Egypt, Jordan has phenomenal tech
talent, but it's it's going to take time.
This is part of a maturing ecosystem, right?
Is talent probably comes last to most of those regions.
And what can mean, as startups do, to attract global attention?
Whether it's for talent, whether it's for investment, whether
it's just for eyeballs. I mean, be loud about the
achievements, right? Scream about the achievements.
Not just the fundraising. Yeah, scream about what you're
doing. Highlight your people, right?
Most, most tech talent out there, one, they want to get
paid well, they want to be on ESOP programs.
So me and founders stop being scared of ESOP programs.
Do ESOP for all, let people feel like they have a piece of the
business. And three, shout about your
talent, right. If you have an AI engineer who
builds something phenomenal in your business, post the guy on
LinkedIn, talk about the products he's building, talk
about what he's doing. And then finally, don't be
scared to to hire a young into what may be senior roles.
I mean, let's be frank, at my age, I wouldn't be hired into a
CFO at visa in a startup. I get that opportunity because
someone gave me that opportunity, right.
And what you find is if you hire those people who are maybe one
step before they're ready, that's great.
They're going to learn the part to be ready, But you're going to
get someone who's so hungry, who's going to go the extra mile
and you give that opportunity to talent.
So if you look in the US, it's hard to move up in startups
because it, it's a flooded market, right?
But here you can go to that, maybe that lead engineer in the
US and say, hey, come over to Mina.
One is tax free. 2 is a great place to live seven months of
the year. The other five are a bit hot,
but and also I'll make you head of engineering.
Take that risk on someone, take that risk on talent, and then
celebrate the talent. What's missing from the meaner
start up ecosystem? And this could be a couple of
things. I mean, first and foremost, I
think exits. So we haven't had enough exits
to get through like a full cycle yet.
I think that will be a big change for the region.
When you start to get to that stage where you have a multiple
companies going through exits per year, you see that recycling
of talent, you see that recycling of capital.
I think the Kareem story is always very interesting in terms
of how many millionaires were created from Kareem and what did
they go and do with that money. A lot of it got put into the
Pakistani fintech ecosystem. A lot of it got put into the
fintech ecosystem here and that's been brilliant.
And that's why you've seen fintech a bit more accelerated
out here is because it got that early capital and it got those
early exits. And and that's it.
We've been talking about Kareem and Souk exit for the past 4-5
years. Like hello, who else?
That's what I mean. Who else I think.
Swivel yeah. And I think people can talk
about swivel and say it's a bad exit and the list didn't go well
and whatever it may be, but still good for the ecosystem to
and I I grew up here, right. So as a a meaner kid, that's a
proud moment. Like one of us listed on the
NASDAQ, right? OK, maybe it didn't go perfect,
but it's still a cool moment. We need more of that.
We need more growth stage funding.
So you need more firms that are going to fund Series B's, that
are going to fund Series C's and.
You never see those press releases do.
No, I mean tabby. That's kind of it.
And then you need those firms that understand how to take you
to a list, how to go through an acquisition exit, because that
knowledge is not there in startups.
Unless you're going out and hiring CF OS who have an M and A
background, it just doesn't exist.
So a lot of founders will get stuck at that point.
And then I think a bit more transparency in terms of what
we're doing out here, what are we building because that helps
attract talent, brings more talent to the region and helps
us build more stuff. So it's a couple of things.
I think it will come with time. I don't think it's something
that you can massively accelerate.
I mean, exits take as long as exits take, but I think once we
get through that first full cycle of an ecosystem, the next
time around you'll see something very different.
I mean, even now, the amount of early stage companies getting
established, the amount of new founders being created per year,
we're at the sort of start of this where we're going through a
second cycle now. And I think each time you go
through that, it gets better. You're getting repeat founders
which know how to do the game a little bit better as well.
And there's. Always like claims that
start-ups here succeed because of their connections rather than
so much innovation. What would your take on that be?
100% because I think. You look at MENA as a region,
we're fairly relationship driven region anyway.
I mean this is across like real estate, oil and gas, whatever it
may be. It's a relationship driven
ecosystem. So if you are a founder that
comes into it with those connections, life is a bit
easier. You see a number of founders who
are XVC. Obviously it's very easy to
raise money when you're XVC, right?
Like you go talk to your old colleagues, they put you around.
And what you generally see in startups here, especially in
funding, is if you know 1 VC well, it's very easy to get
introduced to a bunch of others. And when you're fundraising for
a startup, it is, it is a numbers game.
You're going to pitch to 199, they're going to say no.
So just having that ability to get 100 funds or 100 people to
look at your deck is a win in itself, which is why you do get
those network successful startups.
And I think for founders who don't have that network, it's
extremely difficult because not only are you trying to convince
someone to invest in the business, first and foremost,
you're trying to convince someone to take your call, which
is difficult enough. So there is some sense I think
we'll move away from that. The region is moving away from
that. As it becomes more successful,
it becomes a more sustaining economy.
You kind of move away from relationship driven economies.
So it'll get better, but it definitely still exists.
Yeah. And do you?
Think there's enough? I mean, I have my opinion.
I think the answer is no, but enough kind of financial and
strategic support for early stage start-ups in the region.
In the US they've got loads of accelerators and incubators and
are we doing enough? We are.
Enough. I mean enough is, is a funny
question. There a lot, Yeah.
Are we doing stuff? Yes.
Is it always good quality? No.
Is it enough? Probably not.
I think the other thing we really have in that area that's
a bit flawed is there's no VC here who's going to invest in a
company pre revenue, right. So you can have your product
built, but if you have no revenue yet, yeah, no VC is
touching it. So you've got to go to Angel.
Investors, yeah, or syndicates, yeah, if you don't have the.
Network, it's impossible, right? If you don't know sort of a high
net worth person or a way into those sort of networks, you're
never raising money and then you have to bootstrap for a really
long time. And what you find with a lot of
founders is bootstrapping is one it's expensive for your in
personal life. It's very tiring trying to run a
company on a 10,000 Dairam a month budget.
So a lot of people give up. I think one of the best things
we could do is make more capital available to early stage
founders. I think when you look at like
Antler, who's recently come to the region, their program of
sort of founder matching and and giving checks very early, pre
revenue, even pre product in some stage is really great for
the ecosystem because you give that sort of boost and you give
that start to founders. But we need to do more early.
I mean, the amount of seed stage funds out here who invest in
what would be a Series A in the US, like the bar for MENA
startups is so much higher. For us to just get a seed
investment, we have to achieve the same traction that US Series
A gets. And for us to raise a Series A,
we have to be at AUS Series B level.
So we need more capital early and it doesn't have to be
massive checks, be a fund, start a fund, go give out $100,000
checks. It's going to be game changing
for some of these early stage founders.
But people are so scared to take that risk on pre revenue.
And it's like that's VC, it's risky.
You're going to invest in 10 companies and one is going to
make it. You have to be OK with that.
What do you think? Is the biggest mistake MENA
start-ups make when it comes to pitching VCs or Angel investors
underselling the MENA? Market.
So when you look at population size across MENA include sort of
Egypt, North Africa, Turkey and that it's as big as the US in
terms of buying power, population, available money for
from consumers, it is as big or if not bigger than the US.
So I think a lot of times when start-ups go and pitch to funds,
they feel like they have to just pitch MENA as a launching pad
for me to go to the US or go to Europe.
It's like, no, there's a huge market here and it's a massively
underserved, underserved market when it comes to tech as well.
So make sure that you're sizing that correctly when you're
talking about the opportunities to VCs.
You don't have to run off somewhere else, stay in MENA.
It's a monstrous market and the reality is a lot of VTS are
going to look at you and say, well, how do you go from Dubai
to New York? That doesn't make any sense.
What does make sense is Dubai to Riyadh.
OK, culture is different, but there's enough similarities
there that it makes sense. And then you go from Riyadh to
Bahrain, or you go to Amman or Egypt, wherever it may be, but
you're staying within the same cultural space.
You're getting access to the same level of Tams that US firms
do, but you're not selling that crazy dream that we have to go
to the US to be massive. And I think if more start-ups
did that, more global VCs would start to take note.
They would do their own work on how big is the MENA market.
And once you start looking at that, it's huge.
And on top of that, if you, for example, the business we're in
with mortgages, there's not a huge amount of banks here.
So the opportunity to be in partnership with all the banks
is very straightforward. If we want to go to Europe,
we're trying to partner with 50 banks in every European country.
That's a huge, huge amount of work to get that done.
Whereas we can go to somewhere like Saudi, there's 13 banks, we
can have 13 conversations. So just stop underselling MENA
as a market because there is enough here for you.
You don't have to sell that big dream.
Great, get here, get into your BC and MENA, then raise AD and
go to Europe right? Or or wait and get bought.
Out by yeah AUS company or a European company.
Rocket Mortgage if you. Want to come by us?
But yeah, I agree you. And when you look at it in that
lens as well, most European and US startups are not going to
come to MENA. They're scared of the political
risk. They're scared of the regulation
risk. What you will see in a few years
is a lot of them buy their way into MENA, but they're not going
to want to come and buy a company that owns the UE market.
They're going to want to buy someone who owns the MENA
market, right? Because you're talking about a
company that's coming from owning the European market.
They don't want to come and buy one country.
They want to come and buy MENA. So you can get to a very hefty
exit just from MENA. You don't have to be everywhere
else in the world. Stay here.
We need more innovation. That's really great advice.
So lock down MENA, do you see a disconnect between the the
amount of capital that's being raised in Mina and the actual
market potential of some of these start-ups in some?
Areas and I think there's something we touched on before
as well, it's not so much the total capital raise, but it's
the timing of you raising that. So if you're building deep
infrastructure tech or you're building AI or something like
that, yes, you need a lot of money.
So if computing power is hugely expensive for that stuff and you
need that budget to be able to spend it.
But when you're in our prop tech space, should we raise $50
million? Yes, But we should probably do
it over the next three, 4-5 years.
And getting that capital in tranches is going to allow us to
access that market better. Whereas if we went out and
raised a lot today, the expectations put on us is OK,
now you have to go and capture the whole market tomorrow, which
is intimidating. Let's space out those raises a
bit more. The Tam is definitely big enough
to justify these big capital raises, but not all at once,
right. Like, let's spread this out.
Let's let's build a bit more slowly.
Well, not slowly, Bill, slowly is probably the wrong word, but
let's build more deliberately. Intentionally.
Yeah, intentionally. Let's use the money
intentionally build like that. But I don't think we're we've
ever had like a stupidly large fundraise in MENA.
When you look at some of the AI stuff in Europe, in the USI mean
that feels bubbly, but I don't think we're there yet.
But I think there is people in market who've probably raised a
little bit too much too early. There was some series as out
here that looked more like a Series B in terms of capital
raise. And I think people need to
understand the expectations go up the more money you raise.
So I think we have a justifiable market size for the capital, but
just space it out a bit how? Many years should you leave
between each round I mean. Ideally, you would raise one
round, right? In a perfect world, you'd raise
one round, get profitability, continue to grow.
What I always target with a fundraise is whenever we raise,
we have to account for this money to last 24 to 36 months
without our revenue growing. So that's the way we plan it,
right? We say if our revenue stays at
this level for the next 36 months, do we survive off this
cash? If the answer is yes, then our
budgeting is probably correct. You'll probably end up raising
sooner than that. If you're growing very quickly,
capitalize on growth. Don't raise money when you're
desperate for money. If you're running out of money
next week, you should have been raising 12 months ago and
capitalize on key points in the business.
So if you've hit key revenue milestones, key geographic
expansion milestone, raise at those points.
Don't raise because you're running out of money because VCs
will outweigh your runway. So they will wait until the week
before you go out of money and then come back and say well, now
the valuation is 10 million and it was 100,000,006 months ago.
So really be intentional about it.
Make sure you know what you're raising for.
Make sure you know what you're spending that money on.
Don't get that 10 million or $20 million hit in your bank account
and then trying to decide where to spend it.
Pre plan that. Have your budget.
Don't stick to it rigidly. We are startups, things change,
but have a good idea of where that money is going and you've.
You've kind of, you've highlighted the mistake that me
and the startups are making. What would you say?
What would your advice be on what to prioritize when pitching
to VCs and Angel investors so. I mean, for me it goes sort of
two ways and it depends on the type of founder you are because
you get two types of founders, right?
You get problem founders, the guys who've lived the problem,
who maybe dealt with it offline and you get tech founders.
If you're a tech founder, pitcher, tech, tell them it's
the best in the world. Go after that.
Make sure you're sort of sizing the market correctly.
That's what VCs want to see. They want to see, OK, at end
stage, how big could this be? If you're a problem founder,
focus on your experience, right? Even if that was offline.
So if you were, I can only take our example here.
Michael and Aaron were both offline mortgage brokers before
Holo. So when we pitch, it's not
coming from the sense of, OK, we've been running a mortgage
brokerage for five years. It's no, Michael and Aaron have
been running mortgage brokerages for 35 years combined.
It's just the past five have been online and have been
digital. So it's understanding that
journey, converting it to a digital journey.
They are the right guys to do that because you have that
experience. So focus on strengths at 9 times
out of 10, it's going to be the experience of the founder.
And then as you scale through the stages, it becomes more
about the company, but early stages, 100% about the founder
size of market. And then I think the other one
that Mina startups kind of misses, talk about exits.
Contextualize where you think the company could exit.
Are you going to be acquired by a big international player?
Could you be acquired by a local player?
Is this a listing play or is this APE type play?
Where are you going with this business?
Have a good idea of that because you can begin to contextualize
the returns for VCs, right? If you say, you know what, 6
years from now, if we hit XYZ, we can be bought for this much.
We're currently valuing at this much, that's a 6X return for the
VC. Great, you've contextualize it.
Aim for like 10 to 20X on that return.
But if you contextualize that, it really helps the VCs and then
like starting with the end. In mind, yeah, because.
No VC is investing in a company because they want it to run
forever and for you to pay them a dividend.
No, they're investing in a company because they want to
exit and they want within 10. Years, Yeah.
Fund Life. Cycles, right?
So focus on that. Focus on your experience.
I always tell people the easiest founder to be is a problem
founder. If you've experienced
significant problems in your life, you have a problem you
can't stop thinking about, start a company.
That's the right point to start it.
If you're being kept up at night by this idea, go out and start
the company. Do it in an offline manner.
You don't have to build all the tech in the world to do it.
Solve it with a Excel sheet and a phone call.
See if the idea works and then go with it.
Because once you've done that, you've proven you're a hustle
founder, You've proven you're a problem founder.
It gets significantly easier to raise money at that point.
And then you go after the tech stuff, OK.
And finally, where do you see the prop tech MENA startup
ecosystem in 1020 years time and where does Hollow fit in all of
that? Hopefully the.
Biggest our eventual vision is that when you think home buying
in MENA, you think holo. I think where I see, I mean the
MENA ecosystem will continue to grow no matter what happens.
But my genuine belief is that we found our niche with prop tech.
This historical context, right? When you look at the people who
are LP's, so the people who invest in VC funds, they have
partners. Yeah, they've.
Historically made their money through real estate.
This is a region that has made its money in real estate, be
that commercial, retail, rental, whatever it may be, and probably
even their family. Wealth, yeah, and it's a lot of
it is. Tied up in buildings and things
like that. So what you found now is not
only do you have people building great tech in prop tech, but you
have investors who truly understand the space.
They may not understand the tech side of it, but they do
understand the actual business of real estate.
So when I think 10 to 20 years from now and like this will
sound like hyperbole, but I truly think Mina could be the
hub for prop tech. It's Silicon Valley.
Yeah. I mean, who knows, Like you get
like Riad Valley and stuff like that.
Maybe that's the Silicon Valley of prop tech.
That's where I see us because we have historical knowledge of
this kind of industry. We have good, we have good tech
to build this stuff out. And what you see now is if you
look at Fintech and things like that, the stuff that we're
building here in Fintech has been built in the US, has been
built in Europe. It's been solved.
And it's someone just replicating that and mean a bit
of localization. Great.
We need those products. It's super important.
We're seeing proprietary tech being built in Proptech out here
because it is in the DNA out here, right?
So this is something we understand so well.
So why can't we be the Silicon Valley of Proptech?
This is our niche, So I think that's where you'll see us.
I don't even think it's going to take 10 years.
I think 5 or 6 years from now you'll start seeing that.
You'll start seeing it being talked about.
Hopefully Holo is the top of the name, top of the list there.
But yeah, I think we can just really find our niche in prop
tech and be the place for it. Brilliant.
So. Exciting.
OK, All right. Well, thank you very much,
James. That was a nice little lesson in
on all the abbreviations, a nice kind of explanation of the
strategic side of tech startups, not just prop tech startups,
VCs, and really good advice for founders as well.
So thank you so much pleasure for being here.
I hope so. I like to help out the
ecosystem, like I said, being a kid, so I wanna see us flourish.
Yeah. Pleasure being here.
If you have any questions. Just drop them in the comments.
But yeah, thank you very much. If you enjoyed that, like and
share with a founder or someone who's got an idea might might
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Thank you.