Digital Investments In The MENA Region Are Booming & There Is More To Come

Spread the love

Total investments in the technology space the UAE have grown more than 20 times from $35 million in 2013 to $799 million in 2016, according to a report.

In 2016, 90% of all dollars invested in MENA region went into the UAE, according to the report titled ‘The State of Digital Investment in MENA 2013-2016,’ which was released on Wednesday last week.

This trend is set to continue, driven by the fact that growth stage companies are increasingly Dubai-based, noted the report launched by Arabnet in partnership with Dubai SME.

Over the past four years, the UAE has outranked all other countries in the region, holding the highest proportion of deals among the top five countries, said Omar Christidis, founder and CEO of Arabnet.

The UAE has grown its share of deals from 28% in 2013 to 41% in 2016, according to Christidis.

Souq and Careem contributed to this increase, both in the UAE and across the MENA region, according to him.

The two companies, which raised $275 million and $350 million, respectively, in 2016, accounted for 78% of all dollars invested in the region last year, Christidis said.

When it comes to the number of deals per country over the past four years, the UAE recorded a total of 234 deals.

This is more than double the amount of deals recorded in Jordan, Egypt, Lebanon and Saudi Arabia, which together reported less than 120 deals, according to the report.

The country closest to the UAE in terms of the number of investment deals for the period was Jordan with 118 deals recorded, said Christidis.

He noted that the investor community in the MENA region continues to be heavily concentrated in a few countries.

The UAE houses about one-third of all investors, while Saudi Arabia and Lebanon combined account for another third, according to Christidis.

Lebanon also has a high number of funds for such a small country, and Egypt, on the other hand, has a relatively low number of funds for such a large country with so many startups, he added.

The number of tech investors in the Mena region has been growing exponentially, with the ecosystem adding on average around 10 funds per year between 2009 and 2012, accelerating to about 20 funds per year in 2013-2014, and then jumping to about 30 funds per year in the past two years, the report found.

Of the 30 funding institutions founded in 2016, 40% are based out of the UAE.

Christidis said the UAE continues to build a robust investor community, capturing a slightly increasing share of the overall investor market.

Lebanon and Saudi Arabia also attracted a rapidly growing proportion of the investor community.

The share of the three markets combined grew from 55% to 64% of investors over the period from 2013 to 2016, Christidis said.