Sindibad Business, an online business portal covering entrepreneurship in the Arab world, recently released a new report that covers all investments made into the Internet and Technology sectors in the region. The report compiles information between January 2010 and end of November 2012 from published news and reports, sources from within studied companies, in addition to estimates based on market research.
It is worth taking into consideration that while the report is a valiant effort to shed light on a rather dimly lit subject, we did find some discrepancies in certain areas. Anghami for example received a 1 million dollar investment in 2012 from MEVP, the report however fails to accurately reflect this and instead indicates that Anghami acquired 50 thousand dollars. Cinemoz is another instance where the reported number seems to conflict with other sources. In any case, according to the report, from 2010 onward the region has witnessed...
Less investments, more value
A quick look at the results of the report show that 2012 saw a fewer number of funded startups than 2011: 49 versus 67. The total value of the investments made over the 3 years however has radically increased notably during 2012, starting with around 10 millions in 2010, up to 18 in 2011 and all the way to 124 in 2012.
Jordan leading number of investments, the UAE leading value, KSA & Egypt exhibiting fastest growth... and Lebanon shrinking
Out of the 18 investments that were made in 2010, Jordan was joint 2nd with Lebanon with 4 investments each, the UAE lead the pack with 6. Fast forward 2 years and Jordan currently holds the highest number of investments, 61, almost 3 times as much as the UAE who dropped to second with 21. Egypt, which had 1 investment in 2010, rose up to 3rd place with 17. Meanwhile Lebanon joined Saudi Arabia in 4th position this time with 12 investments each.
The total number of investments made throughout the 3 years stands at 134.
In terms of value, aside from 2010 the UAE has lead Jordan and the rest. Saudi Arabia and Egypt, 3rd & 4th respectively, witnessed the fastest growth. Lebanon meanwhile regressed in 2011, made up some ground in 2012, but remained below its 2010 performance.
Overall, the UAE and Jordan dominate the investment landscape with an overall estimate of 87% of the total investment flow made over the course of the 3 years (48.8% & 38.1% respectively).
Foreign money is shifting the scales
The report also notes that the region entered into the “eight digits” investments phase. 10, 20 and 40 million dollar deals with Kammelna, Namshi.com, Souq.com and Zawya.com lead by PeakGames, JP Morgan & Blakeney, Naspers and Reuters made up more than 85 percent of the total value of investments for 2012.
These ‘serious investments’ however came from outside the region. This indicates that regional VCs and institutional investors still don’t realize the true value in big ticket investments or that they lack the necessary expertise to take projects to the next level according to the report.
The report also notes that investments spiked during the 1st quarters of the 2011 and 2012, punctuated by a less pronounced increase in Q3 of 2011.
The report also estimates that the number of jobs created by these investments is between 1500 and 2000 jobs.