Miami to become new powerhouse of tech startups

TheVentureCity CEO Laura Gonzalez-Estefani, right, and co-founder Clara Bullrich during a meeting in Miami. (AFP)
Updated 18 August 2019

Miami to become new powerhouse of tech startups

  • That diversity offers startups access to markets on the US East Coast, Latin America and Europe, according to experts

MIAMI: Miami is famous for beach parties, gators that wander onto golf courses and iguanas that tumble out of palm trees.

But now the city of “Scarface” and “Miami Vice” is vying to become a new powerhouse of tech startups that some in the business hope will spawn a novel phenomenon — the “iguanacorn.”

The word is meant to represent the tropical answer to the Silicon Valley “unicorns,” startups that are worth more than $1 billion.

While still lagging behind San Francisco and New York, the Florida city is trying to position itself as a tech hub, and already has its first “unicorns” under its belt. They include ParkJockey, which has disrupted the car parking sector, and Magic Leap, which takes users into the world of augmented reality.

Looking to surf the Florida tech wave, so-called startup accelerators — firms that invest in fledgling tech ventures and speed up their early development — are starting to pop up in southern Florida.

Among the leaders is 500 Startups, which opened a Miami branch last year, as well as TheVentureCity, set up two years ago to offer opportunities to Latin American and European entrepreneurs who lack Silicon Valley contacts.

“Not everyone comes from Stanford or Columbia, from MIT, and has their own ‘network’ built up in San Francisco,” said Laura Gonzalez-Estefani, a former Facebook executive and co-founder of TheVentureCity.

The idea of her company is to “identify the best businesses outside of Silicon Valley and give them a boost,” she told AFP. She jokingly refers to such ventures as “iguanacorns.”

“‘Iguanacorns’ is the way we tag the unicorns that are coming from emerging tech hubs,” she said.

In keeping with that idea, her office is decorated with pictures of unicorns and their tropical, reptilian cousins.

Ana Gonzalez, head of 500 Startups Miami — which has its main headquarters in Silicon Valley — said that Miami’s “entrepreneurial ecosystem is at an inflection point.”

Her goal too is to “connect resources and expertise from Silicon Valley with Latin America and the Southeast United States.”

Miami is already an international city, home to a diverse mix of Latinos and Europeans who can snack on Cuban croquettes or cross the street and find Russian “syrnikis,” pancakes stuffed with cottage cheese.

Fifty-three percent of the city’s 2.7 million residents are foreign-born, and locals joke that Miami is the only foreign city Americans can visit without a passport.

That diversity offers startups access to markets on the US East Coast, Latin America and Europe, according to experts.

Additional draws include low taxes, a lower cost of living compared to San Francisco and New York, and a pleasant climate — if you don’t mind hurricanes.

“A big percentage of our entrepreneurs are not from here,” said Brian Breslin, head of the University of Miami’s Entrepreneurship Center.

“Whether it’s South America or Europe or other parts of the United States, they’re coming here for lifestyle reasons, cost-of-living reasons, safety/security, access to different markets. So there’s a lot of different value-adds of being here compared to, say, going to San Francisco, or New York, or Boston, or any of the other traditional tech hubs,” he said.

According to 2019’s Global Startup Ecosystem Report, which analyzes the health of tech ecosystems around the world, Miami is one of the ten cities to emerge as a hub this year, and ranks in the top 30 of the most important startup centers globally.

Tech sector workers in the city increased by 40 percent between 2012 and 2018, the report said, noting that “Miami is becoming a tech powerhouse.”

And Breslin said the cycle of growth in more established tech hubs indicates that more expansion is yet to come.

“I don’t think we’ve peaked yet. I think there’s still growth to be had,” he said.

“People go work at Facebook, or Google, make a ton of money and go start a new business. And we’re just now getting to that point where people made a lot of money working at Chewy.com, at Ultimate Software, hopefully soon at Magic Leap, and then those people will turn around and start the next wave of businesses,” he said.


STC postpones its acquisition of Vodafone Egypt for second time

Updated 46 min 51 sec ago

STC postpones its acquisition of Vodafone Egypt for second time

  • Kingdom’s largest telecom company says it will need an additional two months to complete the deal

CAIRO: The Saudi Telecom Company (STC), the Kingdom’s largest telecom company, said that it will need an additional two months to complete a deal to purchase a 55 percent stake in Vodafone Egypt.

In January, STC was in agreement to buy the stake for $2.4 billion. In April, it extended the process for 90 days due to logistical challenges stemming from the spread of COVD-19. The company said in a statement that it would extend the period again to September for the same reason.

The Public Investment Fund, the Saudi sovereign wealth fund, owns a majority stake in STC. The ownership of Vodafone Egypt is divided between 55 percent for Vodafone International, which is the target percentage of the Saudi purchase offer, 44.8 percent for Telecom Egypt, and the remaining 0.2 percent for small shareholders.

Telecom Egypt is awaiting the results of Vodafone’s evaluation of the final share price to announce its position on the deal. A Telecom Egypt official stated that the company is still awaiting STC’s position regarding the purchase of the share. If the deal is not completed, it may be presented with its rights to acquire Vodafone’s share, which would allow it to take over 99.8 percent of the company’s shares, leaving 0.2 percent for small investors.

Ashraf El-Wardany, an Egyptian communications expert, pointed out the importance of waiting until the procedures between STC and the Vodafone Group are complete. The results will determine the next steps by Telecom Egypt.

El-Wardany said that the Saudi operator must, after completing the relevant studies, submit a final binding offer at the share price and any conditions for purchase. If approved by Vodafone, it must submit the offer with the same conditions and price to Telecom Egypt, provided that the latter responds within a maximum period of 45 days to determine its position regarding the use of the right of pre-emption and the purchase, or lack thereof, of Vodafone’s share.

According to El-Wardany, there are other possible scenarios. Vodafone International may not be convinced of the offer or the conditions presented by the Saudi side and the sale may be withdrawn, or the Vodafone group may be ready to sell and has prepared another buyer for its stake in Egypt in the event of rejecting the Saudi offer. It may also it back away from the deal and continue to operate in Egypt for a few more years.

El-Wardany said that if Telecom Egypt decides not to use the right of pre-emption to acquire the remaining Vodafone shares for any reason, it will continue with its 44.8 percent stake.
It may also resort to selling all of its shares or part of it to the Saudi side or to any company that wants to acquire its stake.

“This raises the question of whether STC can acquire all of Vodafone’s shares,” El-Wardany said, adding that the coming months “will make the answer clear.”