Bahrain's first angel investor Tenmou has invested nearly $1 million over the last two years, enabling the creation of 12 Bahraini startups, it has emerged.

In a press briefing at Crowne Plaza yesterday, company officials announced it was providing seed capital to five new startups that included a pet grooming firm and an organic compost maker, said a report in the Gulf Daily News (GDN), our sister publication.

"The latest startups have received their commercial registration (CR) and will soon become fully operational," chairman Sami Jalal said.

The companies are: Pet People which offers unique, pet houses tailored towards pets' needs, grooming services, all natural snacks and products to ensure a healthy lifestyle for pets; Al Hayat Insurance brokerage company, first of its kind to offer insurance comparisons online; Al Saeed Mozaics which provides one of the world's oldest forms of art; Momkin, which does research and development in physiotherapy and medical devices; and Nature's Path which provides a green and environmentally friendly production of compost, by turning waste into an organic fertiliser.

"The variety of businesses that Tenmou is supporting reveals the range of skills and exciting business opportunities being created today.

"We are fully committed to aid ambitious Bahraini entrepreneurs to successfully achieve their potential in establishing, expanding and growing their companies," said Jalal.

Established in 2011, with a start-up capital of BD1 million ($2.7m), Tenmou invests an average of BD20,000 ($53,000) for a stake of on average 20 per cent in each project that meets its criteria. The angel investor also provides a three-month mentorship period, including support services, at no cost to the entrepreneurs.

Tenmou chief executive Hassan Haider said it had assisted 22 projects in total, of which 12 received capital injection and the others were benefitted via mentorship, support services and contact with other investors through its network.

"We harness the valuable industry and financial knowledge of our current business leaders, and help build a strong foundation for the country's future business people that will spur economic growth and create new jobs."

"Each project receives practical advice and training from the company's board members, who bring with them a wealth of business experience.

"While 25 per cent of the startups propped up by Tenmou over the last two years are in 'difficulty' now, the number is about half of what was expected," said Haider.

The company's exit strategy was based on a holding period of five to seven years and the achievement of certain return targets, which could not be quantified exactly, the officials said.

Dubai-based Nirvana Wealth Management's Varun Sutholiya told the GDN that because a large percentage of angel investments are lost completely when early stage companies fail, professional angel investors seek investments that have the potential to return at least 10 or more times their original investment within five years, through a defined exit strategy, such as plans for an initial public offering or an acquisition.

"Angel investors are drawn to startups because the cost is low and despite higher risk, can offer significantly higher returns if the idea becomes popular.

"Once funded, startups can grow quickly while maintaining low costs and limited labour," Sutholiya added. - TradeArabia News Service