MENA Exits 2022: Mission Acquisition
2 months into Q1'21 and MENA is already aiming to break full-year records. This week we explore the top 2 trends from MENA's Exits in 2022 YTD
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With an abundance of growth capital available across Emerging Venture Markets we’ve seen the gradual, and in some cases expedited, growth of startups across geographies. Last year, and as recorded in our State of Startup Funding-2022 Emerging Venture Markets public report, we’ve seen an unprecedented surge of capital nearing the $7Bn mark across MEAPT. Compared to European markets which saw funds cross the $110Bn mark in 2021 as recorded by Pitchbook, the value of capital remains outstanding if we factor in two key elements in EVMs: the arbitrage component and the YoY growth rate. While Egypt surpassed Saudi Arabia in number of deals over 2021, KSA raised more funds; and while the UAE surpassed Saudi Arabia by a mere 16 deals, UAE-based startups secured more than $600M in VC investment. On one end, this is due to the value of money and the cost of operation in each market. Nonetheless, startups across EVMs observed more than 200% YoY growth in funding, while over in Europe VC funding growth was slightly north of 100%.
As we VC ecosystems across MEAPT grow exponentially along with the expansion of local and global VC mandates, we’ve also witnessed established startups ready for regional growth. Even more, we now have two tech startups listed on public exchanges, Fawry on EgyEx and Jahez on Nomu while the infamous Anghami has successfully listed on NASDAQ. The variables in this VC environment allude to the maturity and intricacy of the startup ecosystem in MENA and across EVMs. Surely, with that, we can expect the emergence of regional players through acquisition- the number one liquidity event which reached a record-high in 2021. Today, we explore two themes in MENA’s 2022 Exits to date:
Market Expansion
MENA has recorded 12 Exits in 2022 to date traversing industries and strategic approaches. To put this into perspective, the 12 Exits closed in the first two months of 2022 are 4 Exits short of full-year 2020 and mark a 300% increase compared to Q1 2021. On surface value, it seems like MENA-based startups are following a natural trajectory of consolidation, building on the staggering momentum of Exits in 2021. A deeper dive into the most anticipated Exits of 22’ YTD we observe the evident motivation of market expansion. To that effect, one great example could be KSA-based and GCC prevalent Foodics acquiring Jordan-based POSRocket earlier this year to consolidate markets as well as take a market leadership position in Egypt, Kuwait, Oman, and Jordan. Another market expansion move through acquisition could also be linked to the Saudi B2B E-commerce player Sary acquiring its Egyptian counterpart Mowarrid in an opportunistic play to tap into the North African market. Lastly, while we saw startups like MENA-based TruKKer move into Pakistan in 2021, this year we saw content marketing platform Walee acquiring UAE-based social monitoring platform Mirror.
Product Development
Surely, as the new entities consolidate their tech stack, talent, and support networks, the boosted output is set to enhance the product offering. However, some acquisitions introduce extra verticals and technologies that could add depth to the overall product. Some acquisitions came in the form of complete product adoption which is the case of US-based JumpCloud acquiring Lebanese Tech startup Myki while others preferred product integration which is the case of Saudi-based Taker acquiring its local counterpart Brisk Delivery. Other highlights from product-boosting acquisitions include MENA-based COFE App acquiring online marketplace Sippy Beans to launch its first E-commerce platform for coffee, as well as MENA-based Huspy acquiring Home Matters Mortgage Consultancy startup to add a financial leg to its home-buying proposition.
Access more data in our recently released MENA 2022 Venture Investment Report
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