H1 2020 MENA Venture Investment Report - Insights in discussion with Fadi Ghandour

Join us for our latest webinar session between MAGNiTT's CEO and Founder, Philip Bahoshy, and Executive Chairman of Wamda Group and Founder of Aramex, Fadi Ghandour, in a fireside chat around the findings of our H1 2020 MENA Venture Investment Report and to discuss what lies ahead in 2020 and beyond for the venture space in the region.

Check out the full discussion, and watch the Webinar below:

They explored several topics, including:

If any insights from the H1 report were surprising or unpredictable

Fadi mentioned that there were no dramatic results that worried him. Egypt and the UAE are continuing as previously seen. Egypt is coming back strong as expected. Saudi Arabia will be a fantastic growth market, as it is the largest market in the region.

What governments can do to help

Fadi says that in some countries, the government did step up. For example in Jordan and Saudi Arabia, programmes were created. Fadi believes that the government should create a safety net and look at this situation as an investment where they can build businesses, and create consumers. It is an investment in the long-term. He also states that tech is building the next economy, the tech companies have been our heroes, for instance, they have kept everyone in the world in contact. Fadi is interested in helping SMEs also, these are the brick and mortar type companies, they may not be disruptive, earth-shattering businesses, but they still have employees and make a living. We haven’t seen in the region the type of support that has been provided in the UK or Germany etc. When governments start to become digitally enabled, this is when ecosystems will also flourish.

If there will be a mass exodus in the region

There will be a lot of pain, Fadi states. Many people will go, it is inevitable, but the situation also shows how essential it is to be digitally enabled, these are the next generation of people who will build the next economy. There were a lot of skeptics, a lot of people who said that we will be digitally enabled in the future and that it is a luxury but now, it is vital to your existence. There will be short term pain, but long term massive gain and opportunities. This is an experiment that we could have never dreamed of, everyone is testing the digital landscape and it has accelerated everything that we have been calling for. Life is going to be pre-COVID and post-COVID. The new normal is digital, and there is still a lot to build.

If there will be a shift with regards to mindset in the region of sustainable businesses over hypergrowth

Fadi shared that everything he learned in Aramex was built around crises. Unfortunately, we live in a region where we have crises often. Founders should stick to what they have learned. People will remember how you ran your businesses in the crisis, so take the lessons and carry them forward

If now is a time to be looking into exits

Philip mentioned that 50% of MENA startups are looking to delay exits. Fadi says that now is not a good time for exits, as valuations will not be great. So, focus on continuing to grow first. 

Views on hospitality and tourism

Restaurants and hospitality will return, but there will be a new normal. What will capacity, food safety, and distancing mean? Fadi asks. They will need to re-emerge. You need to think offline and online. You need to pivot and think about new things. Fadi states that when the weather is great, the captain doesn’t do as much, when it is stormy, the creativity of the captain and the crew becomes impressive. This is what is happening now, disruptive, people will be doing things differently.

If a new founder sees an opportunity, what they should now think about when building their proposition in this climate

Fadi asks, what is relevant? What you’re building has to be a relevant problem post-COVID-19 also. You shouldn’t assume. You need to think about your team and what your team is capable of doing.

He also talked about the number of investments in the region. We have a trickle of what gets invested in other regions ($659 in H1). We need the trickle to double. We haven’t seen any serious investments in the tech space when comparing globally.

How North Africa’s ecosystem compares to the rest of the region

It is behind in the number of startups, amount of money, and development, Fadi states. Morocco is more advanced and Tunisia is coming of age. If you want to have an ecosystem, you need to have an ease of business and a startup-friendly world, which he believes isn’t being seen yet in North Africa.

Other topics included if now is a good time for M&A, what can be done to support Lebanese startups, if the investor community has rallied together, bets on what industries will flourish, and more.

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Despite the current crisis, H1 2020 has seen $659M invested in MENA-based startups, which is already 95% of total funding full-year 2019. Discover more data, including country and industry trends by purchasing our H1 2020 MENA Venture Investment Report