The contents of the 100+ page report are:
Hear from Philip Bahoshy, CEO of MAGNiTT:
What a start to 2019! The first 6 months of the year have proven to be extremely busy and interesting at the same time, all of which is extremely positive for the regional ecosystem. The momentum of 2018 has successfully flown into 2019, which has been reflected in the number of deals and the amount invested in MENA-based startups.
Of course, to round this all off, MENA saw its first unicorn exit as Careem was acquired by Uber for $3.1B. I would like to again congratulate the founders, their teams, investors and government support in making this landmark deal a reality, but also a path to success for many founders that will follow. In fact, we are seeing an acceleration in the number of exits in the region. While they may not all be so-called “unicorns”, this is a key sign of maturity of the ever evolving ecosystem. H1 2019 has seen 15 startup exits take place, an increase of 5 compared to H1 2018 – we expect this to continue, and for 2019 to be a record year in startup exits.
A massive positive is that we will see a new wave of founders and stories emerge from across the region. Ex-Careemers now have the know-how, expertise and financial means to start their own startups, which is essential to grow the next phase of local startups. Egypt’s Swvl is a great example, which was co-founded by ex-Careemer Mostafa Kandil. The bus transportation startup has grown quickly, raising $80M in 3 funding rounds in the last 3 years.
There has also been no shortage of initiatives, meetups and conferences in the first half of the year. Governments across the region are being more transparent than ever before. You are slowly seeing a decrease in the barriers to enter new markets. If there is one thing that the success of Careem and Souq highlights, it is that scale is the name of the game. Founders must recognize the importance of looking outside of their home markets, developing regional aspirations, if not international ambitions, for their companies.
One theme I have repeated at all conferences is that governments have a role to play in supporting this. While funding keeps getting highlighted as the key challenge for many startups, I don’t believe it is necessarily the role of governments to solve this. Where they can play a big role is in facilitating the environment for startups to prosper. Create a cost-effective environment for startups to set up, fail and still be incentivized to try again.
Many government officials I have had the pleasure of meeting and interacting with have somewhat of an insular perspective on how to support startups. How can we become a hub? How can we drive more startups locally? I continue to press that encouraging startups to scale into your country will have a positive externality on the wider ecosystem. Articulating clear propositions for companies to set up in multiple geographies, whether that is the UAE, Saudi Arabia, Lebanon, Jordan, or any countries across the region, will result in more scalable and successful startups like Careem in the future.
I hope you enjoy the H1 update, as we look forward to the second half of the year to continue to break records.