Inside MENA’s start-up ecosystem
* Start-up investments in 2016 were 42 per cent more than 2015
* Funding predicted to reach $1bn within next two years
* UAE had largest number of start-ups, funding and transactions in 2016
Investments in MENA start-ups reached an all-time high in 2016, crossing $870 million, recording an overwhelming 42 per cent increase from 2015, a new research found.
The new MAGNiTT research, a leading online engagement platform for start-ups in the MENA region, outlines the state of MENA start-ups funding for the 2016.
MAGNiTT’s founder, Philip Bahoshy predicts that funding will reach $1 billion within the next two years.
According to the findings, e-commerce platform SOUQ and transportation network app Careem – both successful start-ups born in the region, were the source of $625m of 2016’s funding, providing $275m and $350m respectively.
UAE: start-up hub
In fact, 54 per cent of the funding to start-ups in Lebanon, Iraq, Egypt, Saudi Arabia and Morocco, among other MENA countries, came from businesses in the UAE.
“The UAE cements its position as the start-up hub of the region with largest number of start-ups, funding and transactions in 2016,” Bahoshy said in a statement.
He noted that “on average, 42 per cent of the disclosed funding stems from follow-on rounds of previously funded start-ups,” pegging the question of whether there is a mismatch between those being funded and what is actually in need to grow in the ecosystem.
It seems that there is a preference towards “more mature, later stage investments,” the research finds.