Entrepreneurship is booming across the Middle East and North Africa. In 2018, $900m was invested across the region in 386 deals, an increase of 31 percent in total funding in 2017, according to a report released ahead of the World Economic Forum on the Middle East and North Africa, which concluded in Jordan, yesterday.
From camel milk antibodies and the region’s first unicorn to glasses that help visually impaired people live an independent life and an app that predicts traffic accidents, Arab start-ups are helping to shape the Fourth Industrial Revolution in the region, and beyond, the report ‘The start-up ecosystem in the Arab world 2019’, noted.
The year 2018 saw a record number of deals and funding. In all, 156 funding institutions invested in Arab start-ups in 2018, 30 percent from outside the region. The year saw a 5 percent increase in the number of institutions investing in Arab start-ups, of which 47 percent had not previously invested in the region. Female-founded start-ups accounted for 8 percent of all investments since 2008, with mixed gender and male-founded start-ups accounting for 10 percent and 82 percent, respectively.
This momentum has continued into Q1 2019, with the largest technology start-up exit in the region: ride-hailing app Careem, the start-up with the highest valuation across the region, was sold to US-based rival Uber for a reported $3.1bn. Uber will pay $1.4bn in cash and $1.7bn in notes that convert to Uber equity at $55 a share, marking the company’s biggest acquisition to date in order to fuel growth ahead of its planned initial public offering (IPO).
Aside from this momentous exit, Q1 2019 has already seen 92 investments announced, amounting to $153m in total funding. Notable investments in Q1 2019 include the $65m raised by the clean energy company Yellow Door Energy, $10m by Amman-based online bookstore Jamalon, and $8m by the comparison website Yallacompare.
For the region to develop, it is important to see increased capital flows at all funding stages. While there are well-established players in the Arab markets that have made a name for themselves, it has been a positive and healthy sign to see new entrants come to the region as well. The US-based venture capital firm 500 Startups was the most active investor by number of deals in 2018, deploying funds out of its local 500 Falcons fund.
Mirek Dusek, Deputy Head of the Centre for Geopolitical and Regional Affairs at the World Economic Forum, said: “The Arab world will need its private sector to address youth unemployment, the current skills gap for the Fourth Industrial Revolution and the inclusion of women in the workforce.
“Start-ups, and the entrepreneurs building them, are key to a strategic public private dialogue on these issues and to creating corresponding new opportunities in society.”
Khalid Al Rumaihi, Chief Executive of the Bahrain Economic Development Board, which partnered with the World Economic Forum to produce the list of start-ups, said: “Across the Middle East, entrepreneurs are devising increasingly innovative ways to tackle the evolving societal challenges of the Fourth Industrial Revolution with novel applications of technology. These efforts need to be encouraged, recognized and supported by investors, business leaders and policy-makers.”
Source from: The Peninsula