How startups can benefit from Expo 2020 Dubai - Magnitt CEO
Entrepreneurship is high on the government's agenda to diversify the economy, says MAGNiTT CEO
Expo 2020 will have an indirect impact on all startups in Dubai and the wider region as they will be able to showcase their brand and product to the 25 million visitors expected to visit Dubai for the event, Philip Bahoshy, the CEO and founder of MAGNiTT, told Zawya in a video interview.
“It’s very difficult for all startups to see a direct effect from the Expo. There will be an influx of visitors, potential customers and investors. That will be your opportunity to shine. Showcase your product so that visitors will remember your brand and potentially become customers of your product,” Bahoshy said.
MAGNiTT is an online platform that connects 13,500 MENA-based startups with investors and mentors. Regional startups attracted investments worth more than $700 million in 564 deals last year, according to MAGNiTT’s 2019 MENA Venture Investment report. In these deals, 30 percent of investors came from outside the region and were predominantly interested in Series B or growth-stage investment in later-stage startups.
“We are seeing a lot of interest from Southeast Asian and Chinese investors, who see many similarities in [terms of] the startup ecosystem between Asia and the Middle East,” Bahoshy said. “There is also interest from Europe- and Africa-based investors.”
The infrastructure industry is always disrupted first in emerging markets, he said, citing the examples of Careem yielding to Uber and the growth of transport companies such as Truckr.
However, the fintech industry accounted for the highest number of investment deals last year. Bahoshy observed that “as the ecosystem matures, you will also see the likes of healthcare tech, education tech and other industries receive funding.”
The CEO of MAGNiTT is optimistic about the UAE’s prospects as a startup hub in the region. The country ranks first in innovation in the Arab world, according to the Global Innovation Index, and early-stage startups make up nearly 50 percent of all companies registered in Dubai and contribute over 47 percent to the UAE’s annual GDP, per the Dubai Statistics Centre.
Besides its first-mover advantage, the UAE hosts the headquarters of some of the region’s top-funded startups. “From a government perspective, entrepreneurship remains high on their agenda to diversify the economy. Therefore, I expect many of the legislative challenges to be addressed to try and make it easier for entrepreneurs to be able to start up, potentially fail and still be incentivised to start again. I continue to expect an influx of funds into UAE-based startups,” Bahoshy added.
For startups to effectively partner with the right investor, he suggested opting for investors who commit smart capital (intellectual capital, knowhow, market access, contacts and funding), signing on a good lawyer to avoid any punitive terms, and always keeping investors informed and avoiding surprises. “If something is wrong, tell them upfront so that they can address it,” Bahoshy added.
Referring to the immediate impact of coronavirus on SME businesses in the region, he noted the effects of restrictions on travel, cancellation of events, a drop in tourism and retail activity. “The full impact will reveal itself if there is a slowdown in revenue growth in the months to come,” he said.
Last year, Egypt saw more deals, funding, investors and exits than ever before! Are you interested in keeping up with the story of one of MENA’s hottest startup ecosystems? Purchase our 2019 Egypt Venture Investment Report HERE