Technology Venture Capital Firms Gear Up to Create and Exit Regional Unicorns

BECO Capital, a venture capital firm focused on technology investments in the MENA region and the startups success GCC in particular, said today that over 10 local technology start-ups are expected to exit in the next three to five years, with a handful of them having the potential to break the one billion dollar valuation ceiling, forming the first regional “unicorns” and creating a virtuous cycle for the start-up ecosystem.

The time taken to build enterprise value in a start-up has significantly been reduced. This is driven by regional market fundamentals such as economic growth, demographics, online and smart phone penetration, which are some of the highest in the world, and an increase in venture capital, will all contribute to the creation of such regional unicorns.

Amir Farha, Co-founder and Managing Partner at BECO Capital who is speaking at the STEP Conference today, says: “While many of these online ventures are experiencing strong growth and possess solid business models, a few of them will actually receive unicorn valuations, meaning raising funds at a valuation of US$1 billion or more.”

Over 1000 technology entrepreneurs, start-ups, investors and businesses are meeting at the STEP Conference in Dubai to discuss the industry’s trends. Entrepreneurs will have the opportunity to showcase their businesses to investors, for the “next-round” of fund raising for their ventures which many of them hope to grow into those US$ 1 billion endeavors.

The exit market for start-ups continues to improve, and the future looks very promising, with momentum continuing to pick up each year. Exits before 2005 took anything between seven to 11 years to materialise, and this has dropped to between four and eight years, at similar or higher valuations.

“We will see many exits coming at relatively high valuations of over US$ 100 million or more, but what will put the region on the world map of venture capital will be the first US$1 billion exit, whether through a trade sale to strategic company or even through an IPO. We see some regional companies that have this potential, and we are thrilled to be part of their exciting future,” Amir Farha says.


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