With ArabNet, the premiere conference for digital business in the Middle East, rapidly approaching, organizers have stressed the high growth potential for digital start-ups across the region.
Commenting on the 3rd UAE edition, Omar Christidis, CEO of ArabNet, stated; “Today more than USD 400 million is available for start-ups in MENA, highlighting the increased availability and rising interest of Venture Capitalists (VCs) and Angel Investors in the capabilities and potential of local and regional businesses. As a result, digital businesses now have access to much needed funding that will enable them to rapidly scale up, meet consumer demand and capitalize on the high potential of growing regional economies.”
Christidis highlighted key trends in the opening up of funding for young businesses, stating that the region’s leading corporate ventures have increased their presence and involvement in start-ups over the past five years.
“The most striking example is of Careem, a leading car booking service in the region, which recently received an investment of USD 10 million from the Al Tayyar Travel Group. Majid Al Futtaim Ventures also recently announced a landmark investment in Beam Wallet, a mobile commerce and rewards platform developed and launched in the UAE in 2012. What these investments show us is that the large scale organizations are willing to fund innovative start-ups that match their investment portfolio,” he added.
This sentiment is echoed by the CEO of MAF Finance, Rasool Hujair, who added: “We believe that mobile technology is at the core of the consumer shopping experience, and our investment in Beam Wallet further enhances our ability to provide a holistic experience.”
A similar change has also been witnessed in KSA markets where INET, the financial payment solution provider that connects and operates 90 per cent of point of sale machines on behalf of banks, invested in Gate2Play, a regional e-payment solution provider.
“VC funds, accelerators and other initiatives are springing all over the region, marking the rise of Corporate Venture Capital funds. This can specifically be witnessed in the telecommunications sector where well-established corporations including STC, Mobily, and Zain are increasingly investing in high-potential start-ups,” added Christidis.
Last February, STC Ventures invested USD 5.5 million in Modanisa.com, the dominant Islamic clothing online retailer in the world, based in turkey. Similarly, Mobily launched its own VC fund, Mobily Ventures, and has invested in 2 large start-ups. Zain, on the other hand invested USD 30 million with MEVP.
Zain Group CEO Scott Gegenheimer said, “By investing in MEVP’s latest fund, Zain is increasing its exposure to the digital economy and becoming an active participant in this new digital age.”
Governments are also becoming increasingly involved in the field by putting forward large funds. The Kuwaiti government has dedicated USD 7 Billion to the National Fund for SME development and more recently, in Lebanon, the Central Bank backed an initiative of Circular 331 to unlock USD 200 million for investments dedicated to entrepreneurship in 2015.
Christidis concluded: “The market for start-ups is extremely competitive. Not only are we seeing regional players take interest but there is now also increased attention from global VCs who are looking to invest in the region as they believe there is large untapped potential. This trend will be one of the highlights at the 3rd UAE edition of The ArabNet Digital Summit, which will be hosting, among others, Silicon Valley’s 500 Start-up, one of the leading VCs and accelerator in the world. 500 Startups partner Mathew G. Johnson and distribution hacker in residence Tammy Camp, will run a full workshop track during the Summit– an exciting opportunity for budding digital entrepreneurs and investors alike.”
The ArabNet Digital Summit, takes place from May 27-28 at Atlantis the Palm, Dubai, and is set to be attended by more than 1000 participants, 70 exhibitors and 100 other speakers, featuring the Start Up Track, the Match-up, the Digital Showcase, 500Startup track, the NEXT track, Ad+Tech Academy and a plethora of global and regional industry leaders.