Zainab Kufaishi is the head of Middle East and Africa and senior executive officer at Invesco, which is an asset management company that has been operating since 1935 with branches all over the world.
Zainab has around two decades of experience in the investment industry and has recently been recognized by the Forbes Middle East as Middle East’s Power Businesswoman. Zainab discussed with Business LANDSCAPE her story of joining the Iraqi Angel Investors Network, the latest trends in the investment scene in the region and Iraq, the main sectors that hold potential for the thrive of the Iraqi economy, the challenges of hydrocarbon-reliant countries, how women founders and entrepreneurs can navigate their way through the ecosystem, and her experience as a judge on the Middle East Women Inventors and Innovators Network Award.
We would love it if you could tell us a bit about yourself?
I am originally from Iraq, I was born there and I grew up there till the age of about 10. Then after moving out, we went to the UK, where we eventually settled for about 20 years, and I have been in Dubai for about 12 years now. I have been in the world of finance since I graduated from university. I graduated from the University of Warwick where I studied Economics and International Studies and joined the world of investment straight after graduating and became a technical analyst. I was advising portfolio managers about market timing decisions and then I joined the asset management industry and I worked for companies like Fidelity and Invesco which are large, multibillion-dollar asset management companies that invest internationally across lots of different asset classes. I have been with Invesco for 12 years and I am currently the head of the Middle East and Africa and senior executive officer for the Middle East Branch.
Would you tell us about Invesco and its operations in the MENA region?
Invesco is a traditional asset management company, we invest assets on behalf of institutional and wholesale investors and we manage lots of different asset classes, from traditional equities to fixed income to cash to private equity, and real estate, amongst others. We have been in Dubai for 15 years, our focus is mostly capital raising and relationship management for our main investors in the region. We do invest in the region, but through an exchange-traded fund (ETF). Therefore, we do not have any current investment operations in Dubai. But this is something that we continue to look at as the region evolves and grows.
How did you come across the Iraqi Angel Investors Network and what motivated you to join?
I think it is fantastic that there is an Angel Investors Network in Iraq and credit to KAPITA and other partners on the ground in Iraq. I have very strong roots in Iraq, it is still my first love as a country. I am very much associated with the country and very saddened to see what has happened to it over the last 30 years or so. But given that I am in the investment industry, I do passionately believe that a real source of economic growth and prosperity for all is the growth of the private sector. Unfortunately, Iraq does suffer from the predominance of the public sector. The statistics are shocking about the numbers of public sector employees and the productivity per day, and the over-reliance on oil and gas, when we all know that there is a more sustainable future ahead of us and that will no longer be the main driver of growth for the world. Hence, we need to make sure that our economy is well diversified and the private sector, particularly startups and ventures like what KAPITA is incubating, is the source of that growth, and creating sources of employment as well as promoting the entrepreneurial spirit, especially for the young people, who are the future of the country. This is what motivated me to become involved in the network. It is a very interesting story, I am a big fan of LinkedIn and I just saw that Ali Al-Suhail had posted a very interesting article about the venture ecosystem in Iraq and I had not realized that there was a nascent ecosystem that is growing and I read it with real interest. It was a very good read and I then reviewed KAPITA’s work and contacted him. I wanted to be involved and bring more diversity and a different perspective to the network and I have a lot of mature contacts within Abu Dhabi and other large investors in the region and over a decade of experience.
Have you recently attended any of the startups’ pitches held by the Iraqi Angel Investors Network and what was your impression?
Yes, I did. I think I was thoroughly impressed by all the ventures and their presentations. I would say there are various levels of maturity and there is a big spectrum of diversity and each startup is on a different level of the journey. Some startups are a lot more mature than others and have rehearsed their presentations over and over and been able to refine the crux of what they wanted to convey to the investors. I do think there is a place with KAPITA and with other parts of that community for some mentoring, to make sure that these startups come with their best foot forward to these pitching sessions, where they only have one opportunity to impress, to make sure that they come well prepared, have answered all the questions, and made sure their pitch deck is succinct and clear.
How do you perceive the current investment opportunities in the Iraqi ecosystem and the future growth potential of the Iraqi market?
The demographics speak for themselves, it is a young population, the rising level of education, increasing middle class, which is increased wealth and disposable income and that is fertile ground for e-commerce, which is where we have seen the majority of the startups operating. But I think there is room in agritech, tourism, and healthcare for startups to prosper. Iraq has many resources other than oil and those types of industries provide a great opportunity to diversify the economy. Nevertheless, the country, the leadership, in particular, should direct incentives into the private sector, not just into the public sector, and create a friendlier space for the private sector to operate. I have been in Dubai for 12 years, this is the same challenge that any hydrocarbon economy faces, where the government wants to provide for its people and gives some generous benefits. But on the other side of the coin, it does not train its people to become entrepreneurs or provide them with the space to incept businesses and grow the private sector, where I think the real opportunity lies.
Do you think there are any strategies or policies that can promote the growth of the Iraqi private sector?
I think this could be tackled through two things, the first is through business supporting companies and organizations such as KAPITA, where there are lots of support systems for startups and entrepreneurs, grants, access to mentors, access to high levels of education, to incentivize young people to start their own businesses or to join the private sector. Two, attracting more mature, large, and multinational companies into Iraq and providing them with incentives to set up operations there, and make sure they employ local talent. Hence, Iraqis can have access to governance practices that are world-class and are trained by large companies with different standards. It is a challenge for everyone and not an easy problem to solve, but I do think that it needs to be a top-down strategy from the leadership. In case this does not materialize, I think that a lot of private sector communities like KAPITA and the Iraqi Angel Investors Network will need to reach out to other multinational bodies that can provide some support which they have already been doing.
What can be done to address the lack of financing and funding opportunities in Iraq which is one of the most critical issues in the ecosystem?
Unfortunately, Iraq does face a challenge in terms of funding. There are many international investors or even some of these large Middle East investors that I talked to and Iraq is not even on their radar because as a country it has not passed what we call the hygiene factor where, the rule of law, certain governance systems exist. Unfortunately, things like corruption, also play a role in why investors would be quite put off by investing in Iraqi ventures. I think a lot of work to change that needs to happen countrywide. Having said that, I think there is a lot of room for the open-minded, and Iraqi diaspora that is one of the largest in the world, to invest back into the country, having understood the country and its dynamics. The demographics and macroeconomic indicators of the country show that there is a lot of potential once we overcome those challenges and the change is already in effect.
What are currently the most emerging trends in the investment landscape especially in the MENA region?
The largest investment trend worldwide, especially post COVID-19, is the environment, social, and governance (ESG). Sustainability is at the forefront of everybody’s minds. Recently, the United Nations Climate Change Conference, COP26, is held in Glasgow. Real sustainable change is on top of everyone’s agenda and it is not just a box-ticking exercise. This is filtering into investors’ minds in the world and the MENA region as well. Many sovereign wealth funds that we work with look at ESG issues as quite relevant and they are trying to see the impact of factors like climate change, some social issues, and how companies are governed, especially in the wake of lots of scandals and lots of mismanaged companies all over the world. I do think that if Iraq is thinking about moving into the next phase of growth, it is not going to be the same as the last 10 or 20 years, it cannot be because it has to be better than that, because we must not only forgive our reliance on hydrocarbons and oil, but also to think very innovatively and creatively about how more sustainable businesses and sectors can flourish in the country. Since those sectors will eventually drive funding and growth and we will move away from oil dependency, although it is very challenging since a lot of funding is generated by it, especially since oil rebounded to $85 a barrel.
Have you identified any recent investment trends in the Iraqi market?
I have seen quite a few e-commerce emerge and secure investments, which is great for the ecosystem. I just wish that we have more original ideas that are trying to solve unique problems in Iraq rather than replicating existing business models. If we are going to be another Uber, then that is great, but there must be some unique challenges in Iraq that need to be tackled and requires innovative solutions
Are there any certain issues that come to your mind that stand out and are unique to Iraq? Can you think maybe the startup ecosystem can come up with ways to solve them?
There are two industries, where I think we can create innovative solutions and establish startups in order to help to diversify the economy and move away from the reliance on oil.
That would be the tourism sector, there is a wealth of culture and history in Iraq to create an international tourist destination and I do not think there is enough attention nor enough tourists from outside of Iraq. It is understandably challenging in the age of COVID but that will resume and there needs to be business ideas and models that would resurrect the Iraqi tourist industry.
The other one is agriculture, Iraq is such a fertile country and can exploit these resources. It is great that it is self-sufficient in terms of produce, but there is a huge potential to establish businesses across all the value chains and revive the food manufacturing and processing industry as well as exporting to other countries through employing new technologies and innovations in agriculture.
As an investor entering the investment landscape in Iraq, what topics or analyses do you wish existed to help you further understand the scene?
I think what is important is to dispel myths because I think people still have this idea of Iraq being a corrupt country where it is very difficult to do business. Investors want to hear good news about the progress in the country, factual information about the scene in Iraq, which sectors are thriving, political risk analysis, and how that impacts business. These are the kind of topics that would put people’s minds at ease, at least in terms of entering into Iraq, and then they can explore further. It is more of a preliminary analysis like what KAPITA is doing but I think it needs to be available in different forums, international magazines, make sure that different industry groups and audiences internationally have access to that kind of information.
Have you invested in any startups recently?
Yes, I already put money to work. I have just closed on Orisdi. I think investment comes to your faith in the founders because you are taking a big punt on the startup scene. Thus, there are a lot of inherent risks there. But I think if you believe in the founders, vision, credibility, and professionalism of the people that are driving it then that is where success comes from.
Do you have any advice or tips for startups or founders to prepare for their pitch day?
Founders need to make sure that first of all their pitch deck is concise, and they can tell the story in 15 pages or less. They have put their story upfront, what problem they are trying to solve, and how this idea has the potential to grow and scale. I think that the main crux is right at the beginning, also they need to make sure that their financial data is ready and bulletproof because investors are going to look at the bottom line. Moreover, have an ESG angle, if possible, this is at the forefront of every investor’s mind and we have to prepare for the industries of tomorrow as the world economy is changing. Rehearse, rehearse, rehearse, make sure you can cover up all the questions you receive from the audience, and make sure that the technology does not trip you up.
Do women investors face gender-specific challenges? How are you navigating through those challenges as a businesswoman?
I do not see any gender-specific challenges for women investors, it is, however, a male-dominated field but I think it is a mindset above all and you have to make sure that you stand out and be your authentic self, and everybody brings different perspectives and different things to the table. I have not faced any gender-specific challenges in my journey, but that is not to say that other women have not. Nevertheless, the more senior you get, and the more travel is involved, that does impact your family life. Right now I have two young kids, and balancing travel with family life is challenging. But I think the key for me personally, is having a supportive husband and understanding family that allows me to balance the two and be my best self to myself and a role model to my children which is what I thrive on.
On the receiving end of the investment, I think the stats worldwide show that when raising funds for venture capital, especially in Series A and Series B, there is a lot of the funding that does not seem to filter down to women-owned businesses. The reason could be that there are not enough women-owned startups, although this is changing day by day. Or that there is some kind of unconscious bias where the money is not flowing to women-owned businesses.
Are there any obstacles standing in the way of women founders and entrepreneurs seeking investments or reaching investment readiness?
I do not think there is anything intrinsic that prevents women from reaching investment readiness but I think, especially in the startup phase, there is more gravitation towards femtech or women-oriented industries. I was recently a judge at the Middle East Women Inventors and Innovators Network Awards. Many women were presenting their ideas and their inventions which come from a variety of sectors. However, the real winners of that competition were the ones that did not just focus on women-dominated industries, like cosmetics for example, instead, they focused on engineering, sustainability, farming, and other domains. There is a huge potential in that women’s talent pool but I would say, try not to crowd yourself out by being like everybody else. Instead, make sure that you stand out with your own original idea that could be in any sector not just aimed at women for women.
Are the workplaces and the startups’ scene in the MENA becoming more gender-inclusive? And how can we encourage women to take on more entrepreneurial roles?
Absolutely, I do think it is becoming a lot more gender-inclusive. We have seen that with a lot of senior hires across different industries, where a lot of women leaders come to the forefront. There is still an endemic problem, we cannot get away from that. I think women start probably 50/50 when it comes to the graduate stage or entry-level jobs but then they start dropping off as they go through the ranks. This could be due to lots of factors, whether it is family or unconscious biases by male bosses. But I think this is an advantage for the startup scene that women do not necessarily face those challenges, you are your own boss. However, I have not yet seen women founders in the pitches that I have attended in Iraq. Although in the wider MENA region, Egypt for example, there is a big thriving scene, and in Sharjah, where there is a big incubator with quite a few women founders. I think the entrepreneurial scene is where the opportunity is, and where we will probably need to do a lot more work in schools and universities to encourage more female startups.
Do you have any advice as a businesswoman to other women navigating their way through the business world and male-dominated industries?
Yes, quite a few. Listen to your inner voice, be authentic to yourself, and do not try to be somebody who you are not. Challenge the authority, I think that is a big one, even if you are young and you think you are inexperienced, your voice still matters. Everybody brings a different perspective and a different viewpoint, so speak out. Do not take no for an answer, if you really want something, go for it. Be resilient and go after your own truth.