Tunisia’s startup label granted under the country’s Startup Act gives labelled startups in the North African country access to many privileges, including funding, except one thing: it does not allow startups to convert their national currency, dinar into foreign currencies. But Next Gen, which got funded barely two months ago by MAXULA Gestion, manager of the startup fund STARTUP MAXULA SEED FUND, has found a way to beat the system and is now on course to expand to other Gulf countries, after successful expansion to Morocco and Oman.
“At the end of 2018, we prospected the Moroccan and Algerian markets. We started with Morocco and we were pleasantly surprised by the progress of this country. A wealthy middle class that represents a large niche, hungry for products such as ours and large bookstores with astronomical turnover where our applications can find takers. We decided to open a branch there, ” Moez Lachneb said.
Expanding To Morocco And Oman Aided By Tunisia’s Startup Act
Next Gen sold its products in Morocco via an intermediary who sold them three times the purchase price. The founders thought that being there will be more rewarding for them and that such an interesting market deserves to be established there. They were due to open their branch in March 2020, but caught up with the Covid-19 pandemic, they were forced to postpone it until the end of the year.
“We were one of the few companies to set up overseas right after the pandemic,” Moez said.
But internationalization has not been easy for Next Gen, generally. While Tunisia’s startup label granted to the startup under the country’s Startup Act made it easier to obtain funds, it did not facilitate the transfer of currencies. All they had earned was in Tunisian dinars.
“The startup label does not allow us to convert our national currency; we had to generate money in foreign currency. So we managed to find a currency fund and we found it in the Sultanate of Oman,” he said.
The US$100,000 granted by the Oman Technology Fund (OTF), an investment fund specializing in supporting innovative national and international startups, was used to fund Next Gen’s foreign exchange account for the opening of its Moroccan subsidiary.
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The first large-scale export operation took place in December 2020, a container costing 150,000 dinars but with an income of 400,000 dinars.
“I give these figures to say that the Moroccan market is buoyant and that what we invest in our country can generate double and triple retributions internationally,” he said.
Today, Next Gen is preparing the shipment of its second container to Morocco and the opening of its second branch in Muscat in the Sultanate of Oman.
“This establishment will open the doors to the Arab Gulf market, one of the largest in the world,” Moez added.
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A Look At What The Startup Does
The idea of creating Next Gen began long before 2013. It was simmering in the minds of Moez Lachneb, an engineer in biomedical engineering, and Ahmed Nabli, an occupational therapist specializing in disability therapy. Chance brought them together when contact was made by a mutual friend who enlisted Moez’s help with Ahmed’s graduation project.
“The project required a technical component that I mastered, namely a solution based on augmented reality and which serves for the functional rehabilitation of people with specific needs using virtual reality and augmented reality. Dyslexics and autism can benefit ”.
From friendship was born Next Gen, and when they graduated from college at 26, they decided to create their startup. The Internet was starting to spread in Tunisia and they had access to information. The study they had conducted could have an impact in Tunisia and was promising.
“This is when the entrepreneurial seed started to manifest in both of us. We wanted to be independent and make money. Yes we assume, we love the money we earn from our labor.”
They did not choose to design and sell generic products with little use. They have opted for a different product which can change a person’s life and can benefit a good segment of the population.
In 2013, they chose to call their startup “Next Gen”.
“It’s Ahmed’s choice because it’s about solutions for the next generation, products and customers. Our slogan is: we create solution.”
In Tunisia, credit cards are not approved for transactions in currencies other than the country’s dinar. Therefore credit and debit cards cannot be used for purchases on foreign commercial internet sites. This has resulted to most Tunisian banks only allowing account holders to use bank-affiliated credit and debit cards to make domestic online purchases denominated in dinars.
However, the passage of the Tunisian Startup Act by the country’s government has resulted in some sweeping regulatory changes to the Tunisian innovation landscape. For instance, the country’s central bank has recently outlined a procedure for qualified companies to open hard currency accounts.
It should be noted that NextGen was labelled in 2019. Tunisia’s central bank’s latest policy only affects qualified companies, and hasn’t generally changed the policy around the conversion of the country’s national currency, Dinar.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer
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