Wamda has published an excellent study on the funding / entrepreneur eco-system in the region. The very good news is that startup funding is growing in the MENA countries with growth expected to accelerate in coming years. In fact this study, compared to a previous study back in 2009, showed over 3 times the companies receiving investment. The not so good news is there is still a long way to go but then you could say the same of just about any country on the globe. Investors are bullish about investing in Jordan which is considered the silicon valley of the region, UAE and Egypt.
- More funding activity: Over three times as many companies in sample received investment in 2012 than in 2009.
- ICT focus: Most (69%) funders in our sample focus on companies in the information and communication technology industries, though a third are also invested in the education and health care sectors.
Companies that received funding are also growing:
- Signs of scaleups: 60% of companies surveyed with 3-year compound annual growth rates (CAGRs) are scale-ups.
- Scaleups are companies over 3 years old with job growth at, or above, 20%.
- Employment growth: In WRL’s sample of funded MENA companies, 74% with 3-year CAGRs are growing.
- Expanding across borders: 76% of companies in the #WamdaResearch study plan to open new offices in the next 1-2 years, especially in KSA & UAE.
Funding activity has grown and continues to rise:
More investments in MENA: The #WamdaResearch Lab found the number of investments in MENA startups increased from 28 in 2009 to 99 in 2012.
Funding Sources for MENA Startups
The survey identified 50 funding sources for MENA entrepreneurs in 2013, compared to fewer than 20 in 2008
While there are very encouraging signs and growth in access to capital the study acknowledges there is much work to be done. The report states that funders see a need for entrepreneurs needing better strategic planning and financial literacy skills. It was also noted that 70% of the entrepreneurs indicated that finding the right talent was very challenging when building a team.
Click here to download the entire report.