In 2016, innovative entrepreneur and well-established investor, Ahmed Shabana founded Parkpine Capital, a venture capital fund with a global approach that has been transforming the industry since its inception. eniGma’s Bronwen Mehta spoke to the pharmacist turned start-up director turned venture capital fund manager, to find out exactly how he is shaking up the system to improve access to funding on a global level.
While Ahmed Shabana hasn’t always worked in the financial services industry, his appetite for innovation and entrepreneurship had been apparent for decades. After studying pharmacy at university, Shabana followed the natural path of joining his family’s pharmacy business in Egypt. Ever the boundary pusher, however, he was not content with seeing the business just consisting of owning physical pharmacies. “I decided to create an e-commerce pharmacy at a time when e-commerce barely existed in Egypt. It was a completely new idea, and initially it was very difficult to convince people of its viability,” Shabana recounts. “When someone has something that is already established, they’re going to want to venture out on their own. I wanted to have something that I had created, something with an impact that I could fully control. That’s how the idea of Agzakhana.com was born,” Shabana adds, recalling how he came to the decision to create something so out of the box.
While today Agzakhana.com is a successful enterprise, the journey to get there was far from smooth. “It took me almost 10 years to turn it into something successful. I discovered that it was very hard to raise capital. I received hundreds of ‘nos’ from everyone! Eventually, I was pitching an idea to Vodafone Venture for something completely different, and they offered to invest in Agzakhana.com,” he recalls.
While most people experiencing the immense difficulties that he faced would have been put off from venturing into the investment industry, Shabana saw it as his opportunity to change the game itself. “I realised that this was not only my problem, it’s a global problem. There are a lot of entrepreneurs around the world who have great companies but don’t have access to fair capital, and I wanted to change that,” he explains. Creating Parkpine Capital was how he would set about trying to rectify this issue of funding accessibilty.
Yet Shabana couldn’t just launch a venture capital fund without the necessary preparations. To succeed in this highly technical industry, he needed to expand his formal training. He, therefore, enrolled in the prestigious University of Southern California and soon graduated with an MBA. Buttressed by the skills he acquired with his MBA and the experience he had gained through investing in various American companies, Shabana was able to launch Parkpine Capital in 2016, and in just three years, his burgeoning firm has already earned a global reputation.
Shabana explains that one of the main reasons that Parkpine Capital is so well respected internationally, is its ability to create and maintain honest relationships across the business. He explains, “One of the main issues previously, was that there were very few venture capital firms operating in emerging markets. They were able to offer unfair valuations, and you either had to take it or leave it. Because I had experienced this form of venture bullying, and in fact had been forced to take an unfair valuation myself, I was keen for Parkpine Capital to operate completely differently.”
And it is clear from how his company does business, that these are not empty words. “Most of the great deals we get are based on good relationships. It is so important to build a reputation of being good and fair. Because of our reputation, start-ups will accept deals from us that they would decline if offered by bigger firms,” Shabana explains, adding that the benefits of this approach are not just confined to the ability to create initial deals, but the approach is actually far more lucrative in the long run. “If it’s a good company, the founders will never forget how they started. They will probably start two or three businesses in their lifetime. By maintaining a good relationship with the entrepreneur and by not being short-sighted about only one deal, we can also benefit from their future endeavours,” he explains.
Parkpine Capital also stands out with its globalised vision, in both raising capital and picking the companies to invest in. Shabana sees this open approach as essential to their success. Explaining the value his company offers, he says, “Our investors come from all over the world, the Middle East, the US, Latin America. We are also very open to investing in any business based anywhere, as long as it’s a company that we can help and that can really scale beyond borders. There are no
w a lot of VCs operating in the world, so you have to know what you can add, besides money. The fact that we are actively present on four to five continents a year allows us to connect different start-ups to different markets in almost real time. Our company in Indonesia can be immediately connected to Mexico or Hollywood or vice versa. These kinds of connections make the value of our investment multiply.”
Going above and beyond this ground-breaking level of network facilitation, Parkpine Capital has also launched its Global Ventures Summit (GVS), its most influential programme to date, designed to help cement their globalised approach. With the slogan, ‘Silicon Valley Tours the World’, the GVS has been held in many cities all over the world, helping to break down the obstacles to accessing funding. Through meeting thousands of businesses a year, these summits also help Parkpine Capital identify markets and entities to participate in. “We started the GVS in Bali, and then took it to Mexico City, Jakarta, Dubai, Riyadh and Los Angeles, and we’re planning on holding more events in Luxembourg, Costa Rica and Korea. These events are about more than just networkin
g and information exchange, we actually enable transactions to take place. During events last year, we helped nine companies raise $25 million,” Shabana proudly recounts.
Unlike other venture capital funds, Parkpine Capital also participates in venture building, in which they offer, not just funding, but the management and governing infrastructure required as well. Shabana explains, “Sometimes when we’re very excited about an idea, and we have market knowledge about specific business models that can work, we just go ahead and try to do it. I would say that we have a 50-50 model between venture capital and venture building. We try to build at least one or two companies in each region we go to.”
Parkpine Capital specialises in post revenue funding in technology ventures with business models that can be expanded over multiple countries, and currently holds a very diverse portfolio. Shabana shares some such projects that he is particularly proud of, “We have a great healthcare company in Mexico that offers in-home diagnostics technology that is very affordable. We are now seeing how we can one day bring it to Egypt. Another project I am especially excited by, is the Silicon Valley Institute of Technology. After graduating from business school here, I realised that there are a lot of things that are not covered that you need to know in order to start a business and effectively connect with people. So, we started this institute for MBA grads and professionals to come to Silicon Valley for a few weeks and be emerged in the disciplines that will help them grow their start-up, secure funding and operate from anywhere in the world,” he states with pride, adding, “We are also running a great three-year programme in Guadalajara in Mexico, in collaboration with the government to bring more Silicon Valley funded companies to Mexico. This will definitely hugely impact the development of the new economy.”
Looking forward, Shabana plans to continue to grow Parkpine Capital alongside his partner, actor Billy Zane, fully realising that this is predicated on their ability to continue to stand out against competitors through offering unique opportunities that keep people coming to them. As they continue to expand into as many markets as possible, they are looking, in particular, to find ways of using Parkpine Capital to bring about improvements in Egypt and across the wider Middle East region.
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