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Does a potential GCC funding crisis loom despite these 4 start-ups raising capital?

Are GCC start-ups facing a funding crisis due to market dynamics shifting investment priorities to tech?

Abu Dhabi-based NymCard, a card issuing and processing platform, has secured $7.6 million in capital Cairo-based proptech start-up Sakneen has raised $1.1-million in a seed funding round l The PIF fund plans to make 10 to 12 investments of between $15 mn and $50 mn over the next 8 years

Two UAE and two other Egyptian start-ups managed to raise fresh money.

While the Saudi Public Investment Fund (PIF) is ready to finance regional companies with a $300 million Sharia fund, are GCC start-ups facing a funding crisis due to market dynamics shifting investment priorities to tech?  

NymCard – UAE

Abu Dhabi-based NymCard, a card issuing and processing platform, has secured $7.6 million in capital through a Series A funding round.

The banking-as-a-service (BaaS) provider confirmed that the investment round was led by Shorooq Partners and the firm’s latest round now takes its total funding to date to $12 mn.

NymCard aims to offer the best card issuing and processing solutions for financial institutions, banking platforms, and Fintech firms in the MENA region. The NymCard platform has been designed to fully digitize the payment card experience end-to-end, helping to lower overall costs and to help launch customer-focused solutions.

Play:Date – UAE

Developed and launched in the UAE, kids’ social networking App Play:Date announced it received growth investment worth $100,000 from Boopin, one of UAE’s fastest-growing digital marketing agency.

 The investment is a combination of cash and cash equivalents, that will enable Play:Date to fuel continued growth, innovation, and expand the reach of the app.  

Play:Date promises to create a convenient way for parents to build their kids’ social circle and provide families with affordable experiences that can be enjoyed altogether as one.  

Dileny Technologies- Egypt

Dileny Technologies secured a $160,000 non-equity grant from the Information Technology Academia Collaboration (ITAC) program.

The funding will be used to expand and develop its current AI-enabled platform that is focused on breast cancer detection.

Founded in 2018, DilenyTech develops solutions for medical imaging analysis, breast cancer risk assessment, and structured reporting in several medical applications. 

Healthcare professionals can access the online platform anytime/anywhere and reduce patients’ suffering due to long waiting time as well as inaccurate diagnosis. 

The health-tech start-up was awarded a US patent for a novel AI-enabled image analysis technology last year.   

The health-tech start-up has reportedly launched the first worldwide bi-lingual AI-enabled breast cancer risk assessment tool in Arabic and English.

Read: Additional Arab start-up funding in December and India’s 2020 investor appetite in start-ups

Read: Ending 2020 with millions in expansion funding for 5 Arab businesses and start-ups

Sakneen – Egypt

Cairo-based proptech start-up Sakneen has raised $1.1-million in a seed funding round led by Algebra Ventures.

Omar Khashaba, Principal at Algebra Ventures said: “Sakneen brings unique efficiencies to the real estate market, which despite heavy VC funding, hasn’t seen enough disruption. Trying to find a home online today is often a frustrating experience, plagued by inaccurate listings and overzealous brokers. We believe Sakneen can meaningfully differentiate itself by re-inventing the search experience and managing the supply side in novel ways.”

The proptech start-up graduated from the Y Combinator program held in August 2020. 

With many homebuyers inundated with options, Sakneen’s online portal aims to simplify the process as it offers categorized home selections based on a user’s lifestyle, from bachelor pads to a getaway experience in a home. Additional filters for search optimization include the most affordable properties and more.

Not only can home buyers search for property on the portal but homeowners are also able to list and sell their house on the innovative platform. 

By partnering with Coldwell Banker Egypt in November 2020, Sakneen has developed unique digital capabilities and offerings for both sellers and buyers.

$300 million Sharia credit fund 

Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), will be the anchor investor in a new $300 mn Sharia credit fund.

The fund has been designed to provide capital solutions to mid-market companies across the Middle East.

The fund plans to make 10 to 12 investments of between $15 mn and $50 mn over the next eight years.  

The funding is open to private sector companies in Saudi Arabia, the UAE, and the wider GCC, and whose assets are under $5 mn and which have a history of good profitability and growth prospects. 

The fund aims at annual cash profits of between 8 and 10%. 

Is GCC funding drying up?

The pandemic-hit GCC start-up funding ecosystem is experiencing a slowdown, with investors choosing more carefully where to place their bets in the wake of the market seeing a correction in valuation, according to experts and venture capital players.

There has also been a switch within the investor community of late, with some of the private equity (PE) firms looking into the venture capital (VC) space to join the fast emerging technology sector, experts told Arabian Business.

“There has been a decline to some degree in new investments at a very early stage as it has been difficult to have in-person meetings with the founders, which is an important criterion to evaluate the founders’ capability to run the company in the long run,” said Anvita Varshney, managing director of AV Capital Partners.

However, she added that sectors such as health-tech, food tech, e-commerce, and ed-tech are still attractive to investors.

Market players said VCs preferred to top-up their existing portfolio companies rather than look for new investments.

According to a recent report, of the total $959 million investments raised by 50 start-ups in the Middle East in H1 2020, more than half of it was raised by the top 10 start-ups.