The State of Dig­i­tal In­vest­ments in MENA (2013- 2016)

Arabnet - The Quarterly - - Industry Stories -

Ex­cerpts of the 2nd edi­tion of the re­port con­ducted by Dubai SME and Arab­net that pro­vides a com­pre­hen­sive anal­y­sis of in­vestors and in­vest­ments in tech­nol­ogy star­tups in the MENA.

MENA wit­nessed a record year in tech­nol­ogy startup fund­ing in 2016: more than 30 new in­vest­ment in­sti­tu­tions launched, and more than $900M was in­vested in 2016 alone, more than the value of all in­vest­ments be­tween 2013-2015 com­bined (ap­prox­i­mately $750 mil­lion)! The UAE re­mains the re­gion’s tech startup hub, cap­tur­ing the largest num­ber of deals and al­most all of the growth cap­i­tal - a whopping 90% of to­tal dol­lars in­vested. Ecom­merce still dom­i­nates the in­vest­ment land­scape, es­pe­cially for growth-stage deals, but new ar­eas of sig­nif­i­cant in­ter­est are emerg­ing, in­clud­ing health tech, fin­tech, and IOT / smart de­vices.

Dig­i­tal en­trepreneur­ship and in­no­va­tion re­main fo­cal points for gov­ern­ment lead­ers across the re­gion as they de­velop their eco­nomic strate­gies. We have seen the launch of many new ini­tia­tives to sup­port this in the past year: the es­tab­lish­ment of the SME Author­ity in Saudi Ara­bia, the launch of the Dubai Fu­ture Ac­cel­er­a­tors in the UAE, and the an­nounce­ment of $300M in gov­ern­ment-backed funds in Oman (OTF and IDO) to name a few. In to­tal, bil­lions of dol­lars are be­ing ear­marked for pro­grams to stim­u­late startup growth and in­vest­ment.

This sec­ond edi­tion of our In­vest­ment Re­port, con­ducted in col­lab­o­ra­tion with Dubai SME, is the most com­pre­hen­sive re­search on in­vestors and in­vest­ments in tech star­tups in MENA to date. It cov­ers more than 150 fund­ing in­sti­tu­tions and 760 trans­ac­tions that took place be­tween 2013 and 2016, and ac­tively an­a­lyzes year-on-year trends – from the dis­tri­bu­tion of in­vestors by ge­og­ra­phy to the per­cent­age of founders who are fe­male. In ad­di­tion, the am­bi­tion of this re­port is to help in­vestors and pol­i­cy­mak­ers’ mea­sure iden­tify the strengths and gaps in their ecosys­tems and mon­i­tor the im­pact of their poli­cies and pro­grams.

N.B: The re­port's find­ings are based on data col­lected from 75 in­vestors and ac­cel­er­a­tors in the MENA re­gion, specif­i­cally in the United Arab Emi­rates, Egypt, Le­banon, Jor­dan, Saudi Ara­bia, Morocco, Kuwait, Pales­tine, Al­ge­ria, Tu­nisia, and Bahrain. The re­port also ag­gre­gates in­for­ma­tion from pub­licly avail­able data such as those listed on Crunch­base, CB In­sights, An­gel­list, and Eureeca, among oth­ers. The re­port also col­lected data from star­tups through sur­veys and an­a­lyzes a to­tal of 768 re­gional in­vest­ments (all in­vest­ments an­a­lyzed in the re­port are for eq­ui­ty­based in­vest­ments only, and there­fore in­sti­tu­tions that pro­vide grant/non-eq­uity fund­ing have not been in­cluded in the anal­y­sis).

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