MENA's Publicly Listed Startups: Then vs Now
The tech IPO market plummeted in 2022. How did MENA's recently publicly listed startups fare?
In sync with the global economic downturn, the stock market had a turbulent year in 2022. The S&P 500 stock market index peaked in January 2022, but come September, it experienced its largest drop since and ended the year down nearly 20%. The end of the pandemic, the Russia-Ukraine war, the global supply chain crisis, rising interest rates, and the looming fear of recession had quite an impact on the tech ecosystem. This included tech stocks too.
Tech-focused indexes including Dow Jones U.S. Technology Index and NASDAQ were down over 30%. Rewinding a little to the year before, many startups cashed in on the high valuations wave and 2021 was a record year for IPOs globally. However, 2022 came as a reckoning as the tides turned owing to the wider macroeconomic challenges. Major global tech players like Instacart pulled back on their plans to go public during the year and those who had gone public like India’s Zomato, saw their stocks plummet.
A similar story was seen in emerging markets. Many startup founders aspire to an IPO be it a direct listing, a SPAC-led deal, or a traditional IPO, but few are able to realize their dream. Since MENA’s Network International, a Dubai-based FinTech, listed on the London Stock Exchange (LSE), a number of startups from the region have gone public. Anghami and Swvl listed on NASDAQ via much talked about SPAC mergers. Jahez, the online food delivery platform, became the first Saudi startup to list on a public exchange. Egypt’s Fawry listed on The Egyptian Exchange (EGX) after ten years since it was founded.
These startups went public right before the emerging markets started seeing the first signs of the economic downturn. We take a look at where the IPO startups now stand since they first started trading publicly.
Access our suite of FY2022 reports covering MENA, Africa, Pakistan & Turkey.
Fawry
Fawry, an Egypt-based digital transformation & FinTech platform founded in 2008. The company was initially acquired by Egyptian American Enterprise Fund and Helios Investment Partners in 2015 at a valuation close to $100M. In the summer of 2019, the company listed on The Egyptian Exchange (EGX) at the price of EGP 6.46. The shares soared 31% on the first day of trading giving the company a market cap close to $366M. In the first half of 2022, Banque Misr announced that it had raised its stake in Fawry by buying an 8.85% stake in an EGP 1.47Bn transaction, giving the startup's shares a slight upward push on the charts. However, following the trends in the stock market, Fawry’s shares started their downward trajectory as 2022 progressed and reached their lowest mark in July. Over the past few months, the shares have been on a path of recovery and Market Screener reported a 6.57% increase in the past week. Fawry has been an active investor in Egyptian startups for the past few years and has invested in startups like mylerz co and Brimore.
Jahez International Company
Launched in 2016, Jahez International Company is the first Saudi tech startup to list on a public exchange. It was launched as an online food delivery platform and listed its shares on the Saudi Exchange’s Parallel Market (Nomu) at the start of last year. Jahez debuted on a public exchange a few months before the economic downturn and in the past year, its shares have lost over 30% of their value and recorded their lowest mark at end of 2022. However, the startup has been on a recovery path since the start of 2023 and has reported a 10% increase in the past week. Jahez has invested over $150M in Saudi startups including MEGA round raiser Nana. It also completed its acquisition of Marn | مرن, a FinTech based in the Kingdom, for $16M in October last year after signing a nonbinding offer in April.
Source: Google Finance
Anghami
Anghami was founded in Lebanon in 2012 as a streaming platform for international and Arabic music. The music platform has raised over $20M in disclosed funding from the likes of Middle East Venture Partners and SHUAA Capital. After operating in Lebanon for 10 years, Anghami partnered with ADIO to shift its global headquarters to the UAE's Abu Dhabi. The same year Anghami listed on NASDAQ at a $220M valuation under the tickers "ANGH" and “ANGHW” after a merger with Vistas Media Acquisition Company Inc.
Anghami soared when it first debuted with its shares opening at $17.91. Since then, the stock price has dipped 81% with a turbulent trajectory. The startup announced in May last year that its revenue had grown on a year-on-year basis, the same day its share saw a decline of 4%. Toward the end of the year, the startup also went through layoffs to “focus on profitability”. A few weeks before the job cuts, there was news of Spotify being in talks to buy Anghami. The stocks saw Anghami’s share increase by 6% on that day. In the first week of March, Yahoo Finance reported that the share price was up 23%. Overall, Anghami’s share value has dipped by almost 84% in the last year.
Source: Google Finance
Swvl
The mass transit startup has had quite a journey since it first launched in 2017. Swvl raised over $100M in disclosed funding and expanded across the board after recording acquisitions in Spain, Argentina, and Germany. In the summer of 2021, Burj Khalifa went red to announce that the Middle East’s first $1.5 Bn unicorn is to list on NASDAQ. The company listed its shares at $10 on the NASDAQ in March 2022 through a merger with USA-based blank check company Queen’s Gambit Growth Capital. The listing came right before the investment in the venture capital ecosystem began to dry up. In the coming months, Swvl had to terminate its planned acquisition of UK-based Zeelo. The startup also had to halt its acquisition of Volt Lines as according to the CEO of the Turkish company, the deal had to be revoked because Swvl’s current market cap was below the acquisition price of Volt Lines. Swvl also went through a series of layoffs with Techcrunch reporting that the startup reduced its headcount by almost 50% in November last year. During this time, the publicly listed company also shut its operations in Pakistan entirely.
A year since the startup went public, the company’s shares have dropped more than 99%, and the once-billion-dollar valuation has tanked considerably. The year did not start off well for the startup as it received its second delisting notice from Nasdaq after its market value dipped below the benchmark. The first came in November after its shares continued to trade below $1.
Source: Google Finance
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