Saudi Arabia moved up nine notches in the United Nations E-Government Development Index (EGDI) in 2020.

The Kingdom has improved its digital infrastructure index ranking, jumping 40 notches to the 27th globally.

The Kingdom’s remarkable achievement was attributed to the unlimited support of the leadership to the communications and information technology sector, the Saudi Press Agency reported quoting Minister of Communications and Information Technology Eng. Abdullah Al-Sawaha as saying.

Al-Sawaha said the Kingdom’s digital infrastructure witnessed qualitative leap by jumping to 8th position among the G-20 countries.

On the human capital index, the Kingdom jumped 15 notches to 35th globally and 10th among the G20 countries, while Riyadh ranked 10th in the world in terms of sub-technology index and the 31st globally in intercity competitiveness.

Al-Sawaha said this achievement is a result of the outcome of the National Transformation Program (NTP) and reflects the progress achieved by the Kingdom in its transformational journey in building a coherent present for an innovative future.

“The leaps achieved by the Kingdom in the index came as a result of the concerted efforts of many government agencies and adoption of modern digital methods by launching many initiatives and products.

All these have accelerated government’s digital transformation, in a way realizing the goals of the Kingdom’s Vision 2030,” he added.

The EGDI presents the state of E-Government Development of the UN member states. Along with an assessment of the website development patterns in a country, the EGDI incorporates the access characteristics such as the infrastructure and educational levels to reflect how a country is using information technologies to promote access and inclusion of its people.

The EGDI is a composite measure of three important dimensions of e-government, namely: provision of online services, telecommunication connectivity and human capacity.

source: zawya

Fetchr secured at least $15 million in fresh funding to expand in Saudi Arabia as part of a turnaround plan that saved the Dubai-based courier app from collapse.

The latest financing round, which still needs shareholders’ approval, could see pledges increase to as much as $25 million, according to documents seen by Bloomberg. The commitments are being made by venture capital firm BECO Capital, Saudi Arabia’s Tamer Group and French shipping company CMA CGM SA, the documents show.

Fetchr’s interim Chief Executive Officer Mazen Mamlouk confirmed the details of the financing round.

The company, which offers delivery and logistics services to e-commerce firms, late last year had to consider selling the business or filing for bankruptcy due to a “rapidly diminishing” financial performance. It was able to raise $10 million in bridge finance, which diluted existing shareholders to almost zero, according to a letter to investors seen by Bloomberg in December.

One of Middle East’s Largest Startups Narrowly Averts Collapse

Since then, the company has brought in new management, reduced the rate at which it burns cash and closed operations in Jordan, Bahrain and Oman, according to the latest documents. It also cut about 1,230 jobs.

Mamlouk will soon pass the reins to Hussein Wehbe -- the former managing director of United Parcel Service Inc.’s Middle East business - but will remain as an adviser with Fetchr, he said by phone.

Representatives for BECO, CMA CGM and Tamer Group didn’t immediately respond to emails seeking comment.

Fetchr, once one of the rising stars of the Middle East’s nascent startup scene, was valued at almost $300 million in a 2017 fund-raising round. Silicon Valley investors such as New Enterprise Associates, Nokia Oyj’s venture capital arm and Winklevoss Capital were among its backers.

Fetchr’s turnaround is overseen by prominent businessmen such as Iyad Malas, the former chief executive officer of Majid Al Futtaim, Gate Capital founder Munther Hilal and Hussein Hachem, who led logistics firm Aramex for five years.

source: bloomberg

A Dubai Chamber survey showed that giving importance to employee health, safety, and wellbeing helped the business community in responding maturely to the crisis and ensuring business continuity.

Businesses in Dubai that prioritized corporate social responsibility (CSR) initiatives have been able to better respond to the COVID-19 crisis, as per a recent study carried out by Dubai Chamber of Commerce and Industry’s Centre for Responsible Business.

The survey, conducted in May and June 2020, showed that giving importance and adhering to institutional guidelines on employee health, safety and wellbeing, has helped the business community in responding maturely to the crisis and ensuring business continuity.

This study is a follow up to an in-depth report recently published by Dubai Chamber, entitled Corporate Social Responsibility in Dubai: Current Practices, Challenges and Future Opportunities, which revealed that more businesses now consistently engage in CSR initiatives that suit and align with their business strategies. 

Referring to recent CSR activities, respondents to the survey said they considered such efforts as an obligation or “the right thing to do” as opposed to viewing them as activities that help gain better reputation for the firm.

The study also showed that other factors such as digital preparedness, advanced IT infrastructure, and technically aware employees have helped Dubai businesses in ensuring a smooth transition to remote working structures.

However, with restrictions on face-to-face meetings and events, many surveyed organizations have stated that they quickly shifted employee volunteering activities to digital platforms, to explore new ways of creating social impact and giving back to the community.

Over 70% of surveyed organizations reported that the board of directors are involved with CSR initiatives, while 68% of respondents reported advanced CSR practices with employee volunteering.

Overall, 76% of responding Dubai companies were found to be engaged in CSR initiatives.

Findings in the comprehensive report show that “improving the community” was the top motivating factor behind CSR initiatives for 80% of companies, while “improve revenue” was the least motivational factor.

source: entrepreneur

There are various forms of financing. Which one is the best for your company?

A couple of weeks ago the Dutch Chamber of Commerce announced the number of newly started companies in the first quarter of 2018.

Guess what: it was the highest number in five years’ time and there were 10% more companies opened compared to the first quarter of 2017! And what does a higher number of companies imply? More competition for available capital! So, are you looking for financing for your firm? Well, don’t worry too much…

There is more than enough funding available in the Netherlands. It won’t hurt though to do some research into which forms of financing exist. This will help you choose the source of funding that suits best with your situation and company stage. This in turn increases the chances that you will successfully raise funding. The overview below will help you make the best choice.

12 sources of finance for entrepreneurs!

1-     The founders

Explanation: have some savings left yourself? Just received a nice bonus? Why not invest it in your own company! You don’t necessarily have to invest in terms of cash. If a co-founder or a partner invests his/her hours in helping you start your business next to his/her job that is also an investment. Or what about a founder making an office, machines or a technology license available? All of these are sources of investment. Temporarily not paying yourself any wage is also an option.

When to choose this source of financing: founders can obviously invest in their own company at all times. However, you usually see this happening when the company has just been founded. When a company is set up, in many cases no revenues or external financing is available, while there are always some start-up costs to cover.

In terms of the size of the investment you can go all out (as far as your bank account allows you to). Advantage of this form of investment: it can be perceived as positive by an external financer that a founder has some “skin in the game” as well. Why would another person take the risk of investing in your company if you have never been prepared to take the risk yourself?

2. The 3F’s: family, friends and fools

Explanation: before you start approaching professional investors, it might be worthwhile to try to raise some funding within your network of family, friends and fools. These are often people from your family or social network who are close to you and mainly invest because they have faith in your idea or in you as a person/entrepreneur. As they are usually not professional investors you should not expect a professional assessment of your plans from such an investor.

When to choose this source of financing: this type of financing is often pursued to cover the costs of setting up a new company or to bridge the gap to a first round of seed funding. The advantage of this funding type is that it is a quick and cheap way of collecting cash, especially if you take into account the risk that the 3Fs take (which they are not always aware of themselves: hence “fools”).

Usually the amounts concerned with this type of investment are not too high and are typically repaid as a loan (with or even without interest) or are invested in exchange for a small equity share in the company. When the invested amounts, share percentages and the level of professionalism increase, then we speak of angel investing.

Angels/informals

Explanation: angel or informal investors are experienced entrepreneurs who have some funds available (often from previously exited ventures) and invest those in new companies to help other entrepreneurs succeed in their business. Angel investments start around €50,000 and can amount up to (more than) a million euros, as angels often invest together in groups.

When to choose this source of financing: go for an angel if you are looking for seed funding within the abovementioned range. Angels typically offer “smart capital”: so not just money, but also network and knowledge within specific sectors. Try to find an angel that fits with your company in terms of experience and sector knowledge. You can find two overviews of active angel investors in the Netherlands here and here.

4. Crowdfunding

Explanation: nowadays it is hard to imagine crowdfunding once didn’t exist in the Dutch (and international) financing ecosystem. With crowdfunding, the “crowd” finances the funding need of a company. Usually crowdfunding is performed via an online platform where entrepreneurs offer investment opportunities on one side of the platform and on the other side of the platform a large group of people invest small amounts to meet the entrepreneur’s investment need.

When to choose this source of financing: in general there are three types of crowdfunding: loans, pre-orders/donations and convertible loans. Are you looking for a loan, but is it hard to secure one from the bank because your risk profile is too high? Then try loan crowdfunding. Do you have a prototype available and do you want to test the product/market fit, but you cannot finance the production/delivery of the first batch of actual products? Then go for pre-orders/donations.

Well-known examples of suitable platforms are Kickstarter and Indiegogo. These platforms are mainly suitable for products/projects/gadgets aimed at the consumer market with a strong design element to them.

Convertible loans have the following advantages: 1) no shares are being issued, 2) valuation discussions are postponed until the moment the value of a company can be better determined and 3) it is an easier, faster and cheaper process than an actual share transfer. Leapfunder is an example of a Dutch crowdfunding platform that works with convertible loans.

Since the people that invest via crowdfunding platforms are not always professional investors, crowdfunding is better suited for propositions that are not too complex or technical and that are easily understood by the general public (that’s why it’s called “crowd” funding). Think for example of consumer products.

There are also crowdfunding platforms with a specific focus, so take that into account in your choice. Dutch crowdfunding platform Oneplanetcrowd for instance focuses specifically on sustainable projects with a positive impact. Here you can check out a list of crowdfunding platforms in the Netherlands.

5. Subsidies

Explanation: a huge number of tax/financial schemes (e.g. in the Netherlands: WBSO, InnovationBox, vouchers) and subsidies (e.g. Horizon2020, regional subsidies) exist. The aim of subsidies/schemes is typically to stimulate entrepreneurship, innovation/R&D or economic growth within a certain geographical area. That is why every region, every country and even the entire EU has its own subsidies.

When to choose this source of financing: ALWAYS, we can be very brief about that;) Subsidies are relevant during almost every company stage. From start-up to corporate, from freelancer to publicly traded company.

As mentioned before, many subsidies only focus on a certain geographical area and often there is also a specific sector focus. Therefore it is important to look for a subsidy that fits with your company. For an overview of available subsidies/schemes in the Netherlands, check out the website of the RVO.

Keep in mind that administrative and reporting requirements often apply to subsidy applications and grants. You need to be able to justify the costs for which you request a subsidy and sometimes it is mandatory to have this justification audited as well.

6. Venture capital/private equity

Explanation: private equity is the collective name for professional investment firms that invest in companies that are not publicly listed. Venture capital (VC) is a type of private equity which focuses specifically on risky investments in terms of early stage companies.

People often speak of private equity when investing in larger organizations that are existing for some time already. Venture capital on the other hand involves investing in growth capital of young companies. In general, VCs have a fund available of a specific size (e.g. € 100 million) that has to be invested within a certain period of time (e.g. 10 years) in a bunch of companies with different risk profiles to spread the risk across the portfolio. The aim is to sell the shares after a couple of years with a certain return/profit.

When to choose this source of financing: venture capital is mainly suitable for companies that have already passed the “seed stage” and are looking for series A or series B funding. This type of funding is therefore meant to help companies grow faster than when they would grow organically, for instance if a firm wants to internationalize.

VCs typically invest in the range of about €500,000 to €20 million. To raise funding from a VC a company’s product/market fit has to be proven already and steadily growing revenue streams have to exist (except perhaps in the medical sector). However, there are also venture capitalists with seed funds (starting at €200,000) that offer seed capital to companies that have not met the abovementioned criteria yet.

The advantage of VCs is that they can fund multiple rounds, where an angel or other seed investor is not always capable of doing so. VCs often also have a specific sector focus and good knowledge/network within this sector. For a list of VCs active in the Netherlands, take a look at this overview.

7. Debt financing: the bank

Explanation: even though there are a number of banks in the Netherlands that have started venture capital funds (including Rabobank, ING and ABN AMRO), banks are generally more risk averse than for example angels, seed investors and normal VCs. This does not mean that banks do not finance entrepreneurs, on the contrary!

However, they are more likely to invest in SMEs, in companies with lower risk profiles (than start-ups for instance) and when companies can offer collateral. For an early-stage start-up that does not fit in the focus of the VC funds, it can thus be difficult to secure funding from a bank. However, a number of banks in the Netherlands do have partnerships with crowdfunding platforms.

When to choose this source of financing: as mentioned, banks generally take less risk than, for example, VCs and angels. However, if you can provide collateral then the bank is a very good option. Are you thus looking for working capital financing, stock financing or financing to cover investments in buildings/machines, then the bank is a very good option to consider.

Companies generating stable income streams and that have been growing organically for a number of years (and are thus less risky) can certainly also turn to the bank. A big advantage of debt financing: you do not have to give away a part of your company in terms of equity, which means that in the long term it can turn out to be a much cheaper way of financing than for example securing funding from an angel investor or VC.

8. Factoring

Explanation: in short, factoring is a way of financing working capital by lowering the size of accounts receivable. Example: if you send an invoice to a customer, but it takes him/her 60 days to pay, then you can decide to ‘sell’ this invoice to a factoring company (against a certain payment of course).

The factoring company will pay for the invoice immediately (or provides you with a loan) so that you do not have to wait 60 days before the invoice is paid. A factoring company can also take over the risk that a customer does not pay.

When to choose this source of financing: first of all, it goes without saying that you must have clients in order to be eligible for factoring. If you do not have any paying customers, factoring is not an option. If you do have customers, factoring can be very useful if you have to deal with long payment terms.

Do you have large corporates as your customers? Then it can take a while for invoices to be paid and there is often not much you can do about it. In order to keep your working capital position healthy, factoring can be a good choice. Is accounts receivable management costing you a lot of time and effort? Do you often suffer from bad debtors? Then factoring could also be an outcome.

9. Leasing

Explanation: do you have to make large investments in assets such as computers and/or machines? Why don’t you lease instead of purchasing them? By leasing assets companies can spread payments over a longer period of time instead of having to fulfill the full payment of an investment upon the moment they decide to purchase an asset.

When to choose this source of financing: when a company is capital-intensive, meaning it is dependent on the use of (sometimes expensive) assets such as machinery.

10. Suppliers

Explanation: do you purchase a lot from suppliers? Then try to negotiate favorable payment terms with them. If your customers have long payment terms, for instance, you can try to agree to longer payment terms with your suppliers as well so that you do not run into any problems concerning your working capital. On the other hand, you could also try to discuss discounts in the event you pay your suppliers very fast.

When to choose this source of financing: choose this form of financing if you have good relationships with your suppliers or if you have a good negotiating position towards them (for example if you are a large/important customer for them).

11. Initial Coin Offering

Explanation: for an Initial Coin Offering (ICO), a company typically writes a whitepaper to pitch a certain business idea and asks the general public to finance the idea using Bitcoin and/or altcoins (other cryptocurrencies than Bitcoin). In return, the investor receives the new altcoin generated by the company during the ICO.

Usually this newly generated altcoin is at the center of the company’s business activities and thus leveraged in a way that increases its value. As soon as this altcoin becomes tradable, investors can resell it (and hopefully make a profit). The ICO is therefore very similar to an IPO (see section 12 below), but uses cryptocurrency instead of shares that can be converted into “normal money”. Here you can find an overview of cryptocurrencies currently existing.

When to choose this source of financing: it is possible to do an ICO as a non-blockchain company, but currently the majority of the companies that do an ICO are still blockchain/cryptocurrency companies. This is due to the fact that the new altcoin generated by an ICO often has a function within the company to increase its value. The speculation on the fact that the value of the new altcoin will indeed increase is what attracts investors.

12. Initial Public Offering

Explanation: the holy grail of financing: the Initial Public Offering (IPO)! An IPO is the public listing of a company, which means that it is the first time a company offers its shares to the general public. This means that practically anyone in the world (individuals or institutional investors) can invest in the company by buying shares at a certain value.

Before an IPO, a company is private, which means that it often only has a limited number of investors who have invested early-stage or growth capital. Think of the founders, angels and VCs for instance. Spotify just performed a public offering and there are rumors about the Dutch company Adyen performing an IPO soon as well.

When to choose this source of financing: for an initial public offering to be successful, a company must be able to demonstrate years of strong growth and its proposition typically includes a certain network effect/scalability. Growth can be defined in several ways. This can be turnover or profit, but also, for example, the number of customers or active users.

For example, Spotify is a loss-making company, but has been growing enormously over the past couple of years (in terms of turnover and users). A company also has to demonstrate transparency and confidence that this growth will continue in the coming years, because it has to win the trust of the general public that the value of the shares (which they buy today) will rise in the future so that they can make a profit on their investment.

For the investors who owned a share in the company already before the IPO, a public listing can turn out to be very attractive (financially). An IPO should not be underestimated though: it is a very costly process and results in many reporting requirements towards the public, imposed by strict government regulations.

source: ey

شهدت المملكة العربية السعودية في السنوات القليلة الماضية جملة من الإصلاحات الاقتصادية في إطار رؤية 2030 التي أطلقتها المملكة في عام 2016 "خطة ما بعد النفط" حيث انعكست هذه الإصلاحات على البيئة الاستثمارية من خلال اصدار حزمة من القوانين الخاصة بتنظيم الاستثمار والتجارة الى جانب العديد من المبادرات الاقتصادية والاجتماعية التي تشجع على الاستثمار وريادة الاعمال.

القى وباء كوفيد19 بظلاله على مجمل الحياة الاقتصادية- الاجتماعية في المملكة وأثار مخاوف العديد من المراقبين حول المستقبل الاقتصادي للمملكة في المدى القصير والمتوسط. نلقي في هذه المقال نظرة على وضع الاستثمار الجريء والشركات الناشئة في المملكة من خلال قراءة اهم ما جاء في تقرير "الاستثمار الجريء في المملكة العربية السعودية في النصف الأول من عام 2020" الصادر مؤخرا عن مؤسسة "ماجنيت"

المبادرات الحكومية

تركزت المبادرات الحكومية السعودية على الجانب الأكثر تأثيراً في عمل الشركات الناشئة إلا وهو الجانب المالي، ومن هذه المبادرات مبادرة مؤسسة النقد العربي السعودي لدعم الشركات الصغيرة والمتوسطة والتي تضمنت خمسة مبادرات من ضمنها تأجيل دفعات القروض، ومبادرة وزارة المالية التي منحت بموجبها تخفيضات على قيم فواتير الكهرباء، ومنح إعفاءات من رسوم الوافدين، بالإضافة الى تأجيل تحصيل الرسوم الجمركية ومدفوعات القيمة المضافة والضريبة الانتقائية. الى جانب المبادرات الحكومية العديدة المتعلقة بمسائل التمويل أطلقت مؤسسة "منشآت" مبادرة لتمكين المنشآت الصغيرة والمتوسطة من تحويل أنشطتها الى التجارة الإلكترونية، وهي الخطوة التي سوف يكون لها آثار وفوائد مستقبلية على تلك الشركات من ناحية تحقيق خطوة للأمام نحو التحول الرقمي والتعرف على بيئة الاعمال الرقمية.

تطور الاستثمار الجريء

يظهر النمو في الاستثمار الجريء في المملكة العربية السعودية بشكل جلي آثر حزمة الإصلاحات الاقتصادية التي بدأت بها المملكة في عام 2016، فلقد حققت المملكة نمواً في حجم الاستثمار الجريء فاق جميع التوقعات، فمن 7 مليون دولار في اجمالي قيمة صفقات الاستثمار الجريء في عام 2015 الى 67 مليون دولار في عام 2019 أي ان معدل نمو حجم الاستثمار الجريء في المملكة تجاوز ال850% خلال اربع سنوات فقط. اما عدد الصفقات الاستثمار الجريء فحقق نمواً بنسبة 325% ما بين عامي 2015 و2019.

وفي النصف الأول من عام 2020 ورغم الاثار السلبية الوباء كوفيد19 إلا ان قيمة الاستثمار الجريء قد فاق اجمالي قيمة الاستثمار الجريء في المملكة عنعام 2019 بالكامل حيث بلغت قيمة الاستثمارات حوالي ال95 مليون دولارا، كما ارتفعت عدد الصفقات من 35 صفقة للنصف الأول من عام 2019 الى 45 صفقة في النصف الأول من العام الجاري.

ومن الجدير بالذكر ان المملكة قد حافظت على المرتبة الثالثة في عدد الصفقات وحجم الاستثمار الجريء في الشرق الأوسط وشمال افريقيا خلف كل من الامارات العربية المتحدة ومصر.

القطاعات الخمسة الأولى

مازال قطاع التجارة الإلكترونية القطاع المهيمن من حيث عدد الصفقات وقيمة الاستثمار الجريء في المملكة إذ حافظ على المرتبة الأولى من حيث عدد الصفقات فستحوذ على ما نسبته 22% من اجمالي عدد صفقات راس المال الجريء و67% من اجمالي قيمة التمويل، وذلك بالرغم من التراجع النسبي في معدل النمو من حيث عدد الصفقات حيث انخفض بنسبة 15% عن النصف الأول من عام 2019.

اما في المرتبة الثانية من حيث عدد الصفقات فجاء قطاع التقنية المالية بنسبة 11% وبنسبة نمو 11% عن النصف الأول من عام 2019 وهي نسبة النمو الأعلى من بين القطاعات.

وفي المرتبة الثالثة أتى قطاع التعليم بنسبة 7% وبنمو 4% عن النصف الأول من العام السابق حيث يشهد الاستثمار في قطاع التعليم نمواً كبيراً، ولقد تأثر حجم النمو في النصف الأول من العام الجاري بجولة التمويل الاستثمارية لأكاديمية نون والتي بلغت قيمتها 13 مليون دولاراً.

في المرتبة الرابعة والخامسة جاء كل من قطاع الخدمات الاستهلاكية والموضة والجمال بنسبة 4% لكل منهما.

أعلى خمسة صفقات

حصدت شركة "جاهز" لتوصيل الطعام على أكبر صفقة للنصف الأول من العام الجاري حيث بلغت قيمتها 36.5 مليون دولار وهي ثالث أكبر صفقة تمويل تحصل عليها شركة ناشئة في الشرق الأوسط وشمال افريقيا في النصف الأول من عام 2020.

اما ثاني أكبر صفقة فقد بلغت 18 مليون دولار وكانت من نصيب شركة "نعناع" وهي شركة لتوصيل الحاجات اليومية ومواد البقالة أون لاين، فيما حلت صفقة التمويل التي حصلت عليها اكاديمية نون التعليمية والبالغة 13 مليون دولار في المرتبة الثالثة، اما في المرتبة الرابعة والخامسة فجاءت كل من شركة "Sary" لتجارة الجملة وشركة "ساعي" للوساطة العقارية بقيمة تمويل بلغت 6.6 و2.4 مليون دولار على توالي.

لا تظهر المعطيات السابقة التطور الحاصل في الاستثمار الجريء في السعودية خلال السنوات السابقة ومدى النجاح الذي حققته رؤية 2030 في هذا المجال فحسب لكن تظهر أيضا روح المبادرة التي يملكها رواد الاعمال السعوديين وقدرتهم على انتهاز فرصة وجود بيئة استثمارية حاضنة لريادة الاعمال، كما تظهر أيضا فعالية المبادرات الحكومة السعودية والفعاليات الاقتصادية في القطاع الخاص على تحويل المملكة لمحطة جذب لاستثمارات رؤوس الأموال الجريئة والشركات الناشئة المحلية، والقدرة على تجاوز الازمات، كما هو حاصل مع ازمة وباء كوفيد19، والمضي قدما نحو تطوير هذا القطاع من الاعمال.

قيد يهمك أيضاً: تقرير فانتك السعودية: حالة شركات التكنولوجيا المالية والتحديات والفرص التي تواجهها في المملكة

Egypt continues to be Africa’s largest recipient of foreign direct investment (FDI) flows in 2019, marking a 10.7% hike, despite the slump in FDI inflows to the entire continent to USD 45 bn (EGP 727.2 bn), Invest-Gate reports.

“FDI inflows to North Africa decreased by 11% to USD 14 bn (EGP 226.2 bn), with reduced inflows in all countries except Egypt,” read the United Nations Conference on Trade and Development’s (UNCTAD) “Global Investment Trends Monitor 2019” report, noting that Egypt posted USD 9 bn (EGP 145.4 bn) in FDIs last year.

UNCTAD highlighted that economic reforms undertaken by the Egyptian government have improved macroeconomic stability and boosted investor confidence in the country. Although FDIs were still driven by the oil and gas industry, investment in the non-oil economy was also taking place.

According to the report, communications, consumer goods, and real estate sectors have seen significant investments in 2019.

“Egypt ranked first in Africa in re-investing the profits of foreign companies by 41%, where the reinvested profits for multinational companies represent a remarkable share of foreign direct investment inflows to the economies of the countries of the continent,” it confirmed, pointing out that lowering profit expectations will have a tangible impact on investment flows to Africa in 2020.

UNCTAD revealed that global FDI flows are forecast to drop by as much as 40% in 2020, from USD 1.54 trn (EGP 24.9 trn) in 2019, bringing FDIs below USD 1 trn (EGP 16.2 trn) for the first time since 2005.

In addition, FDIs are set to decline by a further to 10% in 2021; and to initiate a recovery in 2022, the report concluded.

source: invest-gate

It would be an understatement for me to say that COVID-19 has changed the world and indeed the way many of us live. In Australia, though tragic in terms of the lives lost to date, we have been fortunate to avoid the significantly higher rates of infection and associated mortality that other nations have endured. As we have seen in the United States and Europe however, the key common thread has been the dramatic impact on local and global economies alike.

The reality is that many good businesses may not survive, and those that do will find their operations permanently changed. From small businesses in hospitality and tourism through to multinational entities, all businesses will need to reassess how they operate moving forward given the flow-on effects of global challenges such as unemployment and disrupted supply chains.

In the startup world, many have also been forced to put operations on hold or temporarily scale back their plans just in order to survive. But as we emerge from the crisis, some of these more agile small businesses and start-ups who have adapted to change may be better placed than larger less nimble incumbents to not only survive but thrive in this new world.

Evolving in Order to Prosper

While the federal government has begun implementing its three-step plan for how COVID-19 restrictions will be lifted across Australia, there will still be a lengthy transition period as global travel remains limited and other economies are at varying stages of recovery.

Startups by nature are growth minded – it’s part of their DNA. Solving problems, spending money on growth (also known as investment), and therefore creating jobs as a result, make start-ups a prime ingredient in our country’s plans for economic recovery. They adapt, they identify opportunities for change, and grow off the back of them. This will be vital for succeeding in the new, and as-yet-unknown, world we are emerging into.

But while making considerations around change, companies no matter how large or small should also keep sight of what matters and what drives them. Investor and entrepreneur Ray Dalio underlines the importance of this in his book Principles where he talks about developing strong foundational principals to guide decisions when faced with challenges and opportunities. In his book, Dalio also notes, “evolving is life’s greatest accomplishment and its greatest reward” and “adaptation through rapid trial and error is invaluable.”

Adapting to New Technologies

COVID-19 has been described by many as a catalyst for significant change. This is best illustrated in the rapid adoption of new technologies by companies in response to the changing economic and social landscape. It also demonstrates the need for companies to not only move faster to adopt new technologies but also to learn how to make decisions at pace. If you asked an Australian G8 university before the pandemic how long it would take for their entire operation to transition to an all online learning model, many would have estimated four to five years. When the crisis came, it took them a matter of weeks. If we look at healthcare with the introduction of widespread telehealth, the population has adapted and we will now likely see telehealth becoming a key component of our country’s much envied healthcare system.

Digital transformation is therefore no longer an option but a necessity. It has already been forced upon many organisations and their staff, and this momentum should be allowed to continue. Without a “reset button” –  companies will need to adjust and balance their risk aversion with the need to adopt technology to improve efficiency and ultimately deliver new ways of working.

Whether it be through addressing the needs of procurement or IT departments in organisations, the ability to move at pace and finding that right balance between risk and necessity will be a key asset to any organisation now and into the future.

Setting New Employee Expectations

The way we view work has likely changed forever.  Even as a temporary measure, remote working has opened people’s eyes and minds to a different way of operating. During COVID-19 lockdowns, people have had more flexibility and spent more time with family than ever before. As a result, employers must take this into account when anticipating what the needs and demands of an employee will be post-pandemic.

Entrepreneur and author Reed Hoffman wrote about the concept of future employers hiring someone for “a job to be done” rather than simply to fulfil a role. This is an idea that may likely come to fruition off the back of COVID-19. With a large number of employees working from home, employees are likely to have been held less accountable to what they’re doing, and hopefully more accountable to what they’ve achieved. For myself personally, I can’t see every single one of my hundreds of staff on Zoom every minute of the day, but I know they’re working well, and trust them to get the job done.

The future won’t be easy, but I am optimistic as we welcome the emergence of the “new normal” and how new ways of working will evolve. Startups provide a key ingredient to accelerate our country’s economic recovery with the opportunity for big business adapt a similar growth mind-set. Technology and innovation will sit at the centre of this shift, and companies will need to adapt if they are to not only survive, but prosper in this new age.

Investment in Middle Eastern fintech companies is expected to grow to around US$2 billion in venture capital by 2022, which will fund 465 fintech companies, an increase from $80 million that was raised by 30 fintech companies in 2017.

As a result of the coronavirus pandemic, the fintech scene has boomed in the past few months, with the world adapting to a new digital and economic environment. According to new research by financial consultancy deVere Group, the COVID-19 crisis has driven a gigantic 72% increase in the use of fintech apps in Europe alone. Meanwhile, fintech companies in Asia and the Middle East have also seen strong increases in the use of their apps.This growth comes as no surprise, since people are now having to rely on digital technology to work, communicate, and entertain themselves during the pandemic.

For the Middle East, the demand for e-commerce has particularly contributed to the rise of fintech in this region, with store closures moving purchases online. Indeed, although the COVID-19 crisis has encouraged fintech innovation to rocket across the globe, the Middle East continues to be at the forefront when compared to other countries. With one of the youngest tech-savvy youth populations, strong international talent, and significant funding from venture capital, the Middle East has the competitive edge it needs to accelerate innovation and consolidate its position on the global fintech stage.

The Middle East and North African region has the largest youth population in the world with two out of every three people being under 24. This equates to approximately 300 million young people in the region. This huge youth population presents an opportunity for the Middle East to be innovative, and to reconstruct their economy, with the number of fintech startups in the Middle East expected to exceed 250 this year. The youth are also more likely to embrace tech/digital products, presenting significant potential demand for fintech companies looking to emerge in the region.

What’s more, a young population translates into a digital native generation. According to GSMA Intelligence, a mobile industry trade body, the number of unique mobile subscribers is predicted to rise from 275 million in 2017 to 459 million by 2025. Smartphone connections are predicted to rise from 49% of all connections to 74% over the same period. This will be important for fintech companies to evolve in the Middle East.

Meanwhile, investment in Middle Eastern fintech companies is expected to grow to around US$2 billion in venture capital by 2022, which will fund 465 fintech companies, an increase from $80 million that was raised by 30 fintech companies in 2017. The Milken Institute Centre for Financial Markets reported that the fintech sector in the Middle East is growing at a compounded annual growth rate of 30% due to the acceleration of fintech and the adoption of technology in the region. The average deal size is currently at $2.5 million, with the UAE accounting for 47% of all fintech deals in the region in 2019.

Countries across the Middle East such as the UAE and Saudi Arabia are also receiving substantial support from their governments when it comes to developing the fintech sector. The largest fintech hub in the Middle East, Dubai established the Dubai International Financial Centre that launched a $100 million fund in 2017 to support fintech startups. In Saudi Arabia, the Saudi Arabian Monetary Association launched Fintech Saudi to develop fintechs in the kingdom as well as supporting fintech companies to join the sandbox, an experimental environment for fintech services.

A number of countries in the Middle East are particularly keen to attract international talent as a way of instigating fintech innovation domestically. For example, the UAE and Saudi Arabia have both established a visa system expansion scheme to make it easier for foreign nationals to reside in their countries. In addition, Abu Dhabi launched Tomorrow 2021 in 2018, a three year vision which focuses on attracting and retaining international talent. The outcome of these initiatives have resulted in many Middle Eastern countries to have populations made up of mostly foreign nationals. In fact, last year, there were 35 million international migrants in the Gulf Cooperation Council countries, transforming the region into an international talent hub.

The coronavirus pandemic has undeniably played a role in the rise of fintech across the world. The Middle East, however, still has an advantage in becoming a global fintech hub due to its large youth population, considerable venture capital funding, government support and international talent. With the MENA fintech market set to reach $2.5 billion by 2022, the Middle East is developing a fintech industry at a staggering rate.

source: entrepreneur