Riyadh: Mohammed Fathi
Startups in the MENA region experience more bold investments than ever, as shows a report issued by Magnitt outlining the reality and future of entrepreneurship in the Middle East and North Africa, under the topic of “Emerging Enterprises in the Middle East and North Africa,”
The report monitored the increasing number of supportive organizations, government supported programs and by donors. The report indicated that the business environment has become one of the focused regards of policy and decision makers, but despite the creation of a favorable environment for entrepreneurs, the challenge facing the majority of entrepreneurs remains the start or launch of a new business, due To the deficiency of the competent authorities and those interested in spreading the culture of self-employment.
Michael Liani, founder and CEO, said at the launching ceremony of the report: “The main reason behind the acceleration in the deals is that technology companies in the region have begun to expand, and have become a magnet for global strategic investors. Secondly, there are growth rates in the Gulf countries such as those registered in emerging markets without any risk associated with currency fluctuations, because most of the currencies of these countries are linked to the dollar. He then explained that the average value of transactions in the region increased significantly last year, which enabled local investors to carry out acquisitions, such as our acquisition of the jrd group worth $ 120 million”.
According to the report, the year 2019 was a record year with a total of 564 deals, representing a greater number of registered investments in the MENA region. It is also noted that although the UAE continues to occupy the top place as the largest market in which companies receive bold investment funds, but Egypt has overtaken all countries in the region in terms of number of bold investment deals, and the Kingdom of Saudi Arabia witnessed the fastest annual growth rate driven by the efforts made to achieve the 2030 vision.
Funding institutions
The year 2019 witnessed more investors in the emerging companies existing in the region, more than ever, and the startups500 company controlled the number of deals, while the flat6lab2 program that has 6 acceleration programs was considered the most active program among startups in the early establishment stages; according to the report.
The number of investors in startups in the Middle East and North Africa reached 212, startbus500 was the highest in terms of number of deals, while flat6labs was the highest among the accelerator programs in terms of number of transactions.
The report believes that the year 2020 will witness five major trends for emerging companies with the continued growth of the emerging projects system in the Middle East and North Africa region, including investing more than one billion dollars in emerging projects in the region, in light of the increasing number of emerging companies seeking to raise funds to boost their growth, and Governmental initiatives such as funding and matching programs to come into effect.
The report also shows that the year 2020 will be another record year, in terms of the number of deals, in light of the severe fragmentation witnessed by many sectors in the region, including electronic commerce and transportation, explaining that investors and emerging companies are looking to merge and to gain a competitive advantage. It also expected that an increase of investors from outside the region will facilitate stabling startups, guided by the experience of “cream, market, harmonica”.
Among the trends of emerging companies in this year, according to the report, more international emerging companies are direct regards towards the opening of branches in the Middle East and North Africa, to take advantage of the proposed and encouraging initiatives to support startups in the region, as the report expects more investors from outside the region to attract a number of startups.
Despite the report figures a prosperous future for entrepreneurship in the region, but it also expects the failure of a number of emerging companies backed by bold investments. It recalls, “As long as we learn collectively from experiences, the failure of one of the experiences is not a bad thing, so we must strive to spread the culture of work Free, we encourage corporate founders to seek entrepreneurship. ”
The report sees the necessity of spreading the culture of self-employment by teaching the basics of business in schools and universities, to provide the education system with the necessary knowledge and skills needed by the entrepreneur, and the need to improve the business environment by facilitating government policies and procedures and the strong need for financing, especially from alternative sources.
