By: Mohammed Shabani

Supy, UAE- based B2B food company, has announced that it has raised more than $8 million in a seed funding round, from BECO capital with many participations include Valia Ventures, COTU ventures, Global Ventures and AMK investment Office. According to the founders The fresh funds will be used to improve its technology, as well as strengthen its product offering, scale- out its Sadia Arabia presence, and launch its settlement and payment solution to help suppliers reconcile invoices while allowing restaurants to better manage their payables and cash flow.

Supy in brief

Supy was co-founded in February 2021 by Dani El-Zein and Ibrahim Bou Ncoula, and works on digitizing the communication process between restaurants and suppliers.

Their software is available on web and mobile and helps restaurants improve profit margins by providing them with insights on their purchasing trends at both an ingredient level and a supplier level.

Supy Aiming to reach Global

In his comment on the lasts funding round, Dani El-Zein, Co-Founder and CEO of Supy said “We are on a mission to become a global leader in this space, and our growth since our pre-seed funding round is a testament that we are on track with the right set of partners” and about his company new aim to reach to the Saudi Arabia market, He said “KSA is the perfect location for our first international expansion outside the UAE and into the global market. Supy was created to solve a crucial problem for one of the most dynamic industries, and we can’t wait to expand our software offerings to our customer base”.

source: News

 Translated by: Fairouz Alnajem

May witnessed start-ups' funding decline in the Middle East and North Africa by about 40% compared to April, as the mentioned start-ups earned only $176 M, in return, the number of start-up transactions rose by 31% over the same period.

Geographical Distribution of Start-Ups' Deals in Size and Number

For the first time, Egyptian start-ups raised the largest funding in the Middle East and North Africa. Egyptian start-ups' funding amounted to about $81 M, as a result of 11 transactions held in May, this also placed it at the forefront of the region's start-ups for the number of transactions.

While Saudi and UAE start-ups were ranked second and third with $46 M and $45 M respectively. In the same order, Saudi and UAE companies came in the 9th and 8th respectively in the number of transactions.

The Egyptian startups' lead was influenced by the Paymob transactions, which successfully raised $50 million in a Series B funding round, which is a huge increase in the funding for this year's leading financial services company, with a 135% increase compared to last year.

The ranking of start-ups on the list of the most collectible funding companies for May was also influenced by the big transaction in which financial technology activist Hyperpay collected $36.7 M funding.

For the amount of funding received by Egyptian, Saudi and UAE start-ups, the total amount collected by startups in other countries is no more than $5 M! That is, its share of funding rate for May is about 3%. This obviously indicates the continuous concentration of funding for startups in Egypt, Saudi Arabia and the UAE, which is worth mention as it often creates the false impression of the average size of finance transactions. by excluding other countries' startups, the average transaction size is about $6 M, on the other hand, the average size of the transaction for startups, excluding Egyptian, Saudi and UAE companies, is about $ 360 K!

Sectoral distribution of size and number of startups' deals

The sectoral distribution was not far from the influence of the transactions collected by the aforementioned start-up. While the fintech sector came first with about $ 112 M as a result of 6 funding transactions, the most important of which was Paymob's transaction, which collected to the sector $ 50 M. The second was logistic services, with about $15.7 M followed by the mobility sector with about $12.6 M

Investment Stages in Start-Ups

Early-stage investment has captured about 28% of total start-up financing in May, with 10% increase compared to April. On the other hand, recent-stage investment witnessed a significant decline compared to the same period.

Distribution of transactions by gender

For the second month on row, female-and-male-run start-ups were able to obtain more than 12% of the total start-ups' funding transactions. However, male-run companies continued to dominate the start-ups fundings, reaping 87.4% of the total funding, compared to 0.04% for women-run companies.

Translated by: Pirween B. Sido 

Startups in the Middle East and North Africa succeeded in obtaining investments worth 297 million dollars from 29 deals in April this year. The volume of investments represents a growth of more than 60% compared to the same period last year.

Geographical distribution of the number and size of startups' deals

There is nothing new in April in terms of the geographical distribution of the value and number of deals. Saudi Arabia, the UAE and Egypt, respectively, continue to lead the startup financing scene in the region. These countries collectively reaped a total of $195 million, or more than 65% of the total value deals. In terms of deal distribution, UAE, Saudi Arabia and Egypt have captured about 82% of the total deals, which is a large concentration in terms of number and volume of deals for April compared to previous periods. On the other hand, there has been significant difference in the volume of deals acquired by Saudi companies compared to startups in other countries, reaching more than $195 million. In terms of investment trend in the startups, it has been observed unprecedented increase in the average transaction size, as it recorded more than 10.2 million dollars in April, which is twice the average transaction size for 2021.

Sectoral distribution of the number and size of startups' deals

The sectoral distribution of the volume of deals for startups was affected by a few huge deals, most notably FOODICS, a platform specialized in financial technology and restaurant management. This company raised more than 170 million dollars in April, and given that the company’s specialization is classified as “service software.” This sector took the lead with $171 million from two deals. The e-commerce sector came in second place with $37 million, also affected by the second largest financing deal, in April, of the UAE company Millennial Brand, which raised $35 million. The real estate technology sectors came in the third place, with $20 million in funding, followed by the agricultural technology sector, in the fourth place, which received $18 million in funding. On the other hand, the financial technology sector fell to the fifth place with $9.8 million funding, from 4 deals. Although the financial technology sector came in the fifth place in terms of the volume of deals, it is in the first place in terms of the number of deals, which indicates that financial technology companies have maintained a significant share of deals, in spite of its relative decline compared to other sectors in terms of the volume of deals.

Stages of investment in startups

Although seed and pre-seed financing phases acquired most of the deals of startups in April, with 58% of the total number of deals, the largest volume of financing went to deals in advanced stages, of which the most important is the category (C) financing phase, that is the funding that went to the FOODICS startup, which raised $170 million, as mentioned earlier.

Distribution by gender

Startups founded by men still dominate the startup financing scene in the region. They obtained about 87% of the total deals of startups in April, while the funding obtained by female startups did not exceed the 1%. On the other hand, the jointly managed startups succeeded in obtaining 12% of total funding thanks to the Millennial Brand’s deal.

2021 can be described as the year of startups par excellence, as it was an exceptional year for startups at all levels. Despite all the difficulties and challenges related to the spread of the Corona virus epidemic, what startups in the Middle East and North Africa achieved in 2021 did not achieve in all previous years!

In this article, we will take a comprehensive look at the state of startups in the region, and tell you everything you need to know about the state of startups in the Middle East and North Africa in 2021.

First: the development of investments in start-ups

During more than a decade, the business environment for emerging companies has developed in the Arab region, especially in the Gulf Cooperation Council countries, specifically the United Arab Emirates and Saudi Arabia, which have worked to develop the business environment to incubate entrepreneurship through a wide range of incubators and accelerators of the business sector and the governmental sector. Egypt has also witnessed a remarkable development in the business environment. The development in the Arab entrepreneurship ecosystem is reflected in improving the legislative and legal environment and in launching a large number of startup incubators, including Flat6Labs, Falak and Injaz Egypt.

The development in the business environment for startups in the region has translated into a huge increase in the number and size of investment deals in startups, as the total volume of deals for start-ups increased by more than 1280% between 2013 and 2021, and with a growth rate of 312% compared to 2020, which witnessed a slowdown in the growth rate due to the direct repercussions of the spread of the Corona epidemic.

In terms of the number of investment deals in startups, it also increased significantly between 2013 and 2021, and while the number of deals for startups in 2013 did not exceed 148 deals, in 2021 it amounted to 561 deals. The following figure shows the development of investment in companies in the region between 2013 and 2021 in terms of the volume and number of investment deals.

As shown in the figure, the volume of investments in 2021 alone is equivalent to the volume of investments in emerging companies in the region during the period 2017 and 2020 combined. This indicates the significant development that occurred in 2021.

Second: Startups in the Middle East and North Africa for 2021

The following chart shows the volume of deals for startups during 2021 and their growth on a monthly basis. The figure shows the upward curve of investment in startups throughout the past year. The quarterly growth of the volume of deals for startups reached 48%, 32% and 104%, respectively, while the growth rate for the last quarter of the same year decreased by 74%. This decline can be explained by the exceptional rise in the third quarter of the year, specifically in July, when the total volume of deals reached more than 632 million dollars. As for the semi-annual growth level, it reached about 91%. In general, the data before us heralds new levels of investment in start-up companies. The number of startup deals in the second half of 2021 also increased by 28% compared to the first half. This rise is accompanied by a growth in the average size of one deal, which rose from about $3.7 million in the first half to more than $5.6 million in the second half.

Third: Distribution startups financing by country for 2021

The Emirati startups continued to dominate the scene in terms of startup financing, as Emirati companies accounted for about 52% of the total investments received by emerging companies during 2021, followed by the Saudi startups, which came in second place with 24% of the total investments, then Egypt with 15%, and in fourth place, came Jordan with 4% of the total investments. Despite the continued dominance of the UAE in the forefront, and then Saudi Arabia and Egypt, in terms of investments in startups in the Arab region, this year witnessed the entry of new countries to the list, which was limited to 7 to 9 countries at best in the past. The list expanded to include 15 Arab countries , the most recent of which was Sudan, which ranked last on the list. In terms of absolute figures, new regions showed remarkable growth, specifically the Maghreb region, the Levant countries, specifically Jordan and Palestine, in addition to Iraq, which is witnessing a growth in the volume and number of deals for startups.

Fourth: Distribution of the number of startup deals by country 2021

In contrast to the distribution of the volume of investments by countries, which shows a strong concentration on the UAE, the distribution of the number of startup deals shows less concentration on the UAE, which despite issuing the largest number of startup financing deals, about 72% of the deals are distributed to emerging companies from outside the UAE, most notably Egypt, which came in the second place with 25% followed by Saudi Arabia with 24%, then Jordan with 7%, Morocco with 4%, and Tunisia and Bahrain with 3% each.

Fifth: The annual average of the volume of deals for startups by countries for the year 2021

The size and number of startups deals is reflected in the average size of a single deal, and while it is a good indicator of the development of investments in startups, it must take into account the anomaly value that may mislead the reader, as we can see from the graph that the highest rate of average one deal size is for Algerian startups at $15 million per deal. However, this number hides the significant decrease in the number of deals for startups in Algeria, which was limited to only two deals! While the average size of one deal in the UAE can be considered more reflective of the development and growth of the volume of investment in emerging companies, in which the size of one deal amounted to more than 8.8 million dollars. The same applies to the case of Saudi startups, whose average transaction size is about $4.8 million.

Sixth: Distribution of startup investments by sector for 2021

2021 was a distinguished year in terms of distributing the investments of emerging companies by sector. The food technology sector appeared for the first time to top the list of investments distribution, with 26% of the total investments, followed by the financial technology sector with 21%, a sector that has witnessed steady growth since the year 2019, while the e-commerce sector ranked third with 16%, this sector is experiencing a relative decline, as we have indicated on more than one occasion. The decline of the e-commerce sector is due to the state of saturation that the main Arab markets have reached, although this does not mean that this sector has completely disappeared. E-commerce in the Arab region still needs more expansion and development, but competition in this sector has become more difficult with the rise of many companies that occupied large sectors of the market, and finally the entry of the e-commerce giant Amazon to the most important Arab markets (Saudi Arabia and the UAE) and last year it entered the Egyptian market.

Seventh: Distribution of the number of startup deals by sector for 2021

In contrast to the distribution of the volume of deals of emerging companies that focus on food technology, the distribution of the number of deals for emerging companies was less concentrated among the main sectors on the one hand, and on the other hand, the large number of sectors in which startups succeeded in obtaining financing rounds are, most notably the agricultural technology sector, artificial intelligence, environmentally friendly technology, and other sectors. This distribution indicates the existence of promising opportunities for emerging companies that are active in areas far from the main sectors that have always reaped the largest share of funding, and perhaps the most evidence of this is the decline of the e-commerce sector in favor of the financial technology sector in the past two years, and the displacement of the food technology sector by the technology sector, which took the lead in 2021. So it will not be surprising that companies operating in different sectors are competing for funding this year.

Eighth: Investment stages for start-up companies during 2021

Investment deals in start-up companies in 2021 focused on the initial funding stage (1), with more than 32%, and in the pre-incorporation stage by about 15%, an increase of 2% over the first half of the same year, while the stage of “accelerated growth companies” came in the third place with 15%, and fourthly, financing of category “A” with approximately 9%, while the pre-financing stage of category “A” (2) accounted for about 7%.

Ninth: Distribution of investments by startup companies for 2021 by gender

The share of funding received by startups founded by females is still small compared to the companies founded by males, as the share of funding received by companies founded by females to the total funded startups did not exceed 1.2%. The year 2021 made significant progress, as a number of distinguished financing deals for women-led companies emerged, perhaps the most important of which were the iMile and BitOasis deals, through which the two companies raised $40 million and $30 million, respectively. It is worth noting that the UAE ranked first in terms of the volume of funding and the number of deals of women-led startups, as Emirati startups received investments worth $187 million through 46 deals. Saudi Arabia ranked second, where startups founded by a team of men and women succeeded in raising about $14 million through 9 deals. Egypt came in third place, with total investments of nearly $12 million through 20 deals.

Explanatory notes:

• Initial financing or financing coming from family and friends, is one of the ways of offering securities, where some parties related to the new startup invest an amount that enables the startup to start its business and continue in the market, until it reaches the stage of being able to finance itself or being able to creating value that makes the startup attractive for investors to invest in. It should be noted that seed funding may be a form of crowdfunding.

• Series A Financing, also known as A Round Financing. It is the first round of financing offered to a startup company in which venture capitalists participate, and it comes after the seed round stage. This is usually done when outside investors are given ownership of the company for the first time. This financing is usually provided in the form of preferred shares, and may include anti-reduction provisions in case of more financing being provided, or in the form of common shares or preferred shares in the future.

Sources:

- Press releases issued by start-up companies.

- Wamda Foundation.

Jordan-based Arabic mobile games publisher Tamatem Games, has raised $11 million in a Series B funding round led by South Korea-based video game developer KRAFTON Inc.,with participation from Venture Souq, Endeavor Catalyst and existing investors including Wamda and 500 Global.

Founded in 2013 by Hussam Hammo, Tamatem works with international game developers to localise and publish mobile games in the Arabic-speaking market. The startup has leveraged 100 million game downloads, one million monthly active users and over 50 published games.

The investment will be used to fuel its expansion strategy across the region with initial focus on Saudi Arabia where it will hire local talent.

Plans of launching a gaming academy to train, educate and elevate employment in the industry are also on the horizon for Tamatem.

Press release:

Tamatem Games, leading Arabic mobile games publisher, raises $11 Million in Series B funding round led by South Korean video game developer KRAFTON, Inc. The round that was led by KRAFTON, Inc., makers of the phenomenally popular battle royale game PUBG, also saw participation from Venture Souq, Endeavor Catalyst and existing investors.

Tamatem has seen great successes since its launch, leveraging over 100 million game downloads and gaining widespread international recognition for its publishing efforts in the region.

With the investment in play and following its previous publishing successes, Tamatem plans on amplifying its efforts even further by bringing a wider selection of games with bigger and more popular titles to the Arabic speaking market. “The demand for relatable and enjoyable mobile games is higher than ever and our mission is to provide our region with the best gaming experience possible” CEO & Founder Hussam Hammo.

MENA’s leading publisher will also carry out its growth strategy of increasing its presence in the region by expanding offices in Saudi Arabia to hire local Saudi talent and have a stronger foothold in the country that harbors 70% of its users. Alongside its expansion efforts in Saudi Arabia Tamatem also plans to expand into more countries in the region.

Plans of launching a gaming academy to train, educate and elevate employment in the industry are also on the horizon for Tamatem in pursuit of pushing market growth and maturity. “Big things are happening for the mobile games industry in the region, we are reaping the rewards of our past successes and pushing forward with more experience and more grit.

We are at the tip of the iceberg when it comes to the massive potential of mobile games in MENA and I am always super elevated when more people invest in the industry and the region” - CEO & Founder Hussam Hammo Tamatem is recognised as one of the most funded gaming startups in the region, raising over $17 million in funding since its establishment in 2013.

Commenting on the investment, Anuj Tandon, Head (India and MENA), Corporate Development, KRAFTON, Inc. said, ‘We see huge potential in the MENA region and are happy to have started our investment journey here with a prolific publisher like Tamatem. We are committed to the MENA region and willing to take more bets in the overall Media and Entertainment Sector, and this investment is aligned with our efforts to strengthen our commitment to the startup ecosystem.

This is just the beginning of our many investments in this region.’ He further added, ‘As we continue our focus to provide the best experience for our MENA users of our various games including PUBG:NEW STATE, Tamatem’s deep understanding of the local landscape and this collaboration will be very helpful.’

Source: Wamda

Translated by: Hayat Hernández

The ramifications of Covid-19 epidemic has generally affected MENA countries economies, but the uncertainty along with other negative economic repercussions, had a significant impact on the venture capital financing sector in the MENAin particular.
In this article we will take a glance at the recently released report "Venture Capital in the MENA in 2020" by Magnitt foundation.

Venture Capital Investments

The VC investments volume broke a one billion dollar barrier in the MENA for the first time in 2020, reaching a growth rate of 13% in comparison with 2019. Although Covid-19 repercussions had a noticeable impact on the volume of VC investments, it was subsidized by the midterm growth of 2020 when the epidemic ramifications were less critical on the MENA economies.

Magnitt’s report data on the VC investments volume geographical distribution in the MENA were not surprising, as the UAE ranked first with 56% of total VC investments with a 4-point decline in its share of total VC investments in the Middle East. Meanwhile, Egypt ranked second with a 17% reaching a growth rate of 31% compared to 2019, and an increase of 2 points in the share.

While Saudi Arabia ranked third with a 15% ratio and an increase in the share of VC by 4 points, which is considered to be the highest increase regarding share distribution. Furthermore, it reached an annual rate of growth of more than 55% which is the second highest growth rate for venture capital investments compared to Bahrain as it attained 200% of growth, and with a ranking increase of one point in the MENA in terms of VC, ranking by that the seventh.

Venture Capital Deals

The number of VC deals decreased by 13% compared to 2019, as it reached 496 deals. This decrease subtended with also a 13% increase regarding the investments volume indicates an excess in the volume of a single deal in terms of the rate, as the size of a single deal in 2020 reached more than two million dollars on average, while it was about 1.6 million in 2019, indicating an increase of more than 400,000 dollars per deal. Consequently, the deal size average in 2020 is the highest in three years.

In contrast to the volume of VC investments which were concentrated in the UAE, Egypt and Saudi Arabia at an attribution of approximately 88%, VC deals in 2020 were less concentrated while maintaining their positions order in the first three places, as the UAE acquired 26% of the total number of deals, followed by Egypt with 24% and thirdly Saudi Arabia with 18%, which also witnessed the highest growth rate in the number of deals as it reached 35%, as well as Lebanon and Oman, both witnessed a rise in the number of deals reaching 23% and 18% respectively. While Lebanon witnessed a significant decline of nearly 64%, which led to eliminating it from the list of the top seven countries in terms of VC deals number in 2020.

Allocating Venture Capital Investments by sectors

Perhaps the most prominent impact of the Covid-19 epidemic was on the sectorial distribution of VC investments. This effect is indicated by the sectorial focus of investment deals on E-commerce, Financial Technology, Health Care, Delivery and Logistics Services, all of which witnessed an increase in demand in 2020 and received most of the VC transactions.
As for the sectors ranking regarding the share of total VC investments and the volume of invested capital in 2020, they came as the following:
E-commerce ranked first with a growth rate of 24%, and an increase in the participation share to total investments by one point. Followed by The Real Estate Sector with an increase of 54% and a growth of 4 points. Ranking third, The Financial Technology sector demonstrating a rise by 19% with an increase by one point.

Followed by The Food and Beverage Sector having a growth rate of 265% and an 8-point increase in its share.

As for The Health Care sector, it occupied the fifth place with a growth rate of 280% and an increase of 5 points. While The Transport Sector ranked sixth with a decline in growth by (-32%) and a decrease in the share by 4 points. Finally, came The Delivery and Logistics Sector with an increase in growth reaching 3%, with neither a decline nor a progress in the VC investments participation rate.

How would it be in 2021?

It is too early to talk about our expectations on what the situation will be in the following months of this year, but the last quarter data of 2020 indicate a remarkable improvement regarding the deals number and volume, as their number increased by 17.5% compared to the third quarter.
In addition to the improvement in the number and volume of VC transactions in the last year final quarter, the number and volume of the deals announced in the first month of this year also indicate a relative improvement in VC investments compared to how they were in the third quarter of the last year when the epidemic ramifications were significantly noticeable.

Some good examples of those deals might be the investment tour of AZOM foundation, as its value attained about 9 million dollars, as well as Foodex which was estimated at 20 million dollars, Tamara with 5.8 million dollars, and also Salasa with about 8.5 million dollars, accomplishing a total value of 43.3 million dollars.

 All of those deals have been conducted from the beginning of the year until the first week of February in this year. In addition to those investment rounds and many others that we did not mention, the number of undeclared deals constituted 17% of the total volume of VC investments, according to 2020 data.

Based on the above, an improvement in the venture capital investments in MENA can be anticipated in the foreseeable future.

Digital connectivity in the time of COVID-19 is no longer about traditional communication and the search for information; it has become a lifeline for using data, consuming content and engaging in digital applications by individuals, governments and businesses to ensure continuity of economic and social activities in light of social distancing and the complete lockdown in most countries of the world.

In the MENA region, the demand for broadband services and data has increased significantly during the pandemic. 

 Countries that are not ready for the surge of demand have seen network congestion, decline in average Internet speed and deterioration of service quality even in relatively mature markets.

Unequal access to quality broadband connectivity may jeopardize stability and increase social inequality between those who can use digital connectivity to secure business continuity and observe social distancing and those disadvantaged groups, including the refugees, without adequate access to the Internet to hook up to the new normal.

Network congestion during COVID-19 was a serious concern for many countries.

There are five main reasons why networks were not able to cope with the pent-up demand:

1. Intensive use of the network during daytime in residential areas (networks were not designed for peak-time service). This led to congestion of "last mile" networks that provide access to the user
2. Increasing demand for video and other high-bandwidth entertainment services
3. Increasing demand for videoconferencing and cloud services
4. Distance learning by students of all ages
5. Lack of sufficient capacity for consumers through international gateways (i.e., access points where Internet enters the country).

Actions taken by MENA Governments to improve broadband network and services

Governments in the MENA region have been fast to act to respond to the need for improved broadband networks and enhanced internet services.

Several examples actions include flexibility of payment to prepaid users allowing them to pay after consumption (Egypt, Tunisia and Palestine).

Some countries increased the bandwidth of Internet packages and speeds for users without additional cost (Lebanon, Iraq and Bahrain), others covered the additional cost of upgrading monthly packages for subscribers (Egypt). Moreover, some countries have unblocked Voice over Internet Protocol (VoIP) applications (UAE and Oman), others provided more spectrum to telecom companies (Jordan and Saudi Arabia), and secured free cloud applications for companies (Vodafone in Egypt).

In the Kingdom of Saudi Arabia (KSA), the government has managed to secure continued access to various e-government services thanks to its continuous investment in modern digital infrastructure and digital government platforms over the past two decades.

Improving e-learning platforms and online education: E-learning platforms have been developed in many countries of the region, like in KSA, where the national education portal "Ain" has become the main channel of education for more than 6 million users.

This digital education platform has provided 30,000 devices for students in need, in addition to providing more than 100,000 interactive digital learning hours for undergraduate students. The Egyptian, Saudi and Palestinian governments have also provided free Internet services to university professors and free SIM cards for students to access learning platforms through their devices. In Tunisia, Morocco and Bahrain, operators have provided free access to online education platforms. In Jordan, new platforms have been developed in the wake of the pandemic to host teaching materials such as "Darsak," "Idrak," "Jo Academy" and "Abwab".

In countries where network conditions were not able to handle the surge of e-learning applications, governments have used Television to broadcast lessons to students to ensure that the kids' education is not impacted.

Main digital connectivity challenges faced by the region

Despite these government solutions and initiatives, there are several bottlenecks that the sector witnessed during the pandemic and several risks that need to be addressed. These include

• Inability of several telecom operators to continue their business for operations, requiring physical presence of their employees at work sites as they needed to respond to lock down requirements.
• Disruption of global trade, especially with countries exporting telecom equipment, affecting the availability of devices and equipment for broadband networks and services,
• Increasing incidents of theft and vandalism of communications equipment
• Increasing cyberattacks, fake news and incidents of digital fraud that exploit the public panic and uncertainty surrounding the COVID-19.
• Privacy and personal data protection concerns for the use of CDR and mobility data for contact tracing and tracking to flatten the curve and prevent the spread of the virus.

Priorities for MENA to leverage digital solutions for recovery

With the transition to recovery and countries re-opening slowly and cautiously, and as economic activity picks up again, MENA countries should work to increase the capacity of broadband connections, manage network congestion, ensure continuity of vital public services and enhance digital financial technologies.  This is important as demand for electronic services such as health care and mobile payment systems, food delivery services and e-commerce are likely to rise significantly.

This is why the World Bank continues to emphasize the importance of digital inclusion both in terms of universal access to affordable high-quality broadband internet, and in terms of financial inclusion as part of the Marrakech commitments ahead of 2021.

Governments of MENA countries should reinforce their efforts to achieve the following objectives based on the COVID-19 early lessons:

• Objective 1: Increasing capacities and reducing network congestion to prevent disconnection and ensure sustainability
• Objective 2: Ensuring continuity of public services to enable citizens to make use of digital technology to complete their transactions
• Objective 3: Developing electronic financial services such as digital payments and cash transfers from governments to individuals to support companies and the poorest and most vulnerable groups, while emphasizing the importance of providing beneficiaries with proof of identity (IDs) to ensure their access to services
• Objective 4: Promoting e-learning initiatives to ensure education continuity.

As the Governments continue to work on creating an enabling environment to increase network capacity, improve service quality, and develop innovative services following global best practices, a number of priority actions in the short, medium and longer terms are important to emphasize. These include:

• Eliminating obstacles to private sector investment and facilitating entry of new operators into the telecommunications market by encouraging competition, reducing licensing fees and sharing revenue
• Regulating corporate tariffs
• Promoting regional cooperation to establish new submarine cable systems
• Facilitating access to basic infrastructure
• Adopting open-access policies to connect all operators to communication infrastructure on a non-discriminatory basis
• Sharing infrastructure by operators, including in the transport, energy and telecommunications sectors
• Allowing use of globally common services such as VoIP

In conclusion, it is important that governments look at digital development more broadly than the ICT sector. 

Digital technologies bring about fundamental transformations in our economies and countries and affect all sectors of the economy such as agriculture, education, health, government and financial services. 

 Reaping the benefits of digital transformation requires an ecosystem approach focusing on digital infrastructure, digital platforms, digital skills, and applications in vital use cases across the economy, while ensuring protection of personal data and aiming for a truly inclusive digital economy for all.

source: worldbank

Middle Eastern fund managers plan to increase investments in Saudi Arabia in the current quarter, according to a Reuters poll, betting on the kingdom's ability to bounce back from the coronavirus and low oil price shocks.

The region, which has imposed strict lockdown measures as it deals with the outbreak, is home to many oil producers, who have seen the price of their main resource tumble as they spend to help support their economies.

Half of the eight fund managers polled by Reuters said they would increase their allocations in Saudi Arabia, the Gulf's largest economy.

While Saudi Arabia's main stock index <.TASI> is down 11% this year, it is up 3.25% this quarter. In a separate Reuters poll this month, the oil producer's GDP was seen shrinking 5.2% this year, before rebounding next year.

"We are looking for opportunities ... across sectors less impacted by both the oil price slump and the pandemic," said Jai Lawrence, asset management analyst at Almal Capital.

While some large companies in Saudi Arabia have taken a hit, the country is "a more diversified market with stock-specific opportunities available, which could be drivers of portfolio returns," said Emirates NBD's Dipanjan Ray, citing the potential merger of the kingdom's banks NCB and Samba.

Overall, fund managers said they were keeping their allocations in the UAE unchanged, because while the pandemic has hurt sectors such as real estate and tourism, the diversified nature of its economy could boost recovery.

"At this stage we believe the Dubai market has already discounted a lot of the negative consequences of the current crisis and there is medium to long-term upside," said Mohamed Jamal of Waha Capital.

Three of the managers polled increased allocations for Kuwait, drawing on its inclusion in the MSCI emerging markets index in November.

They said the timeline of the recovery was uncertain but Emirates NBD's Ray said he expected economic activity to normalise across all sectors over the next 12 months.

He said his firm had invested defensively going into the pandemic crisis, but "we have rotated into high-quality recovery-oriented names."

source: money.usnews

$277M was invested in 108 startup investment deals in MENA, an increase of 2% in total funding from Q1 2019 to Q1 2020

Despite the COVID-19 crisis, MENA's startups saw an increase in funding in Q1 2020, according to a special Q1 2020 MENA Venture Investment Report launched by MAGNiTT.

This 67-page report includes Insights into 28 industries, with a deep-dive into top industries by deals and total funding including rankings and trends of 17 countries, with a deep-dive into top countries by deals and total funding.

The report also highlights funding trends of MENA-based startups, including the top 10 deals, pre-money valuation by stage with average pre-money valuation at Seed & Series A.

Moreover, while the funding in Q1 2020 has slightly increased compared to Q1 2019, it can be seen that the majority of the top 5 funding rounds were announced before the crisis forced many countries into lockdown.

While investors highlighted to MAGNiTT that they are still actively looking to invest, the true ramifications of the crisis are not expected to be seen until several months after the start of the crisis.

The fundraising exercise often takes several months for founders and investors, delaying the impact of the current situation.

March saw a significant slowdown in number of deals, which is expected to continue over the next few months as the ramifications of COVID-19 come into play.

"Historical data highlights that investment rounds across MENA tend to take, on average, 6 months to come to fruition,” explains Philip Bahoshy, MAGNiTT’s founder & CEO.

“We will most likely not see the full impact of COVID-19 on the venture funding space yet for a few months. However, early indications have already shown a slowdown in funding announcements, as startups and investors re-evaluate their positions in this new environment.”

source: sme10x

If there is one pastime that people in the Middle East are unlikely to give up, it is watching television. In 2018, the daily time spent watching TV per capita in the region was 6 hours and 20 minutes according to Statista, more than double the global time of 2 hours and 48 minutes.

But this is set to decline to 6 hours this year as users in the region switch from watching their shows on traditional television sets to streaming them online.

Between 2013 and 2019, the number of people watching television offline dropped from 98 per cent to 86 per cent in the Middle East and North Africa (Mena) according to the Media Use in the Middle East report.

This drop has been driven by cheaper and faster internet connectivity and the rise of video on demand (VOD) and streaming services, also known as over-the-top (OTT) players.

As a result, the space has become more competitive, but the penetration of these services in the region pales in comparison to other parts of the world.

Starzplay, a UAE-based subscription VOD service partly owned by Lionsgate, launched in 2014 in response to rising demand for good quality content. Now, the company has the biggest market share in the subscriptions market with 29 per cent compared to US-based Netflix which has the second largest share in Mena with Wit24 per cent, according to the IHS Markit in its Pay TV & Online Video Report Mena 2019.

Netflix arrived in the Middle East in 2016, giving the industry a boost and bringing with it a sense of credibility and awareness of subscription-based streaming services.

Telecommunication and pay TV operators like OSN have launched their own OTT services as a way to maintain market share, while the parallel launch of Apple TV+ and Disney+ into the streaming television space last November in the US poses the threat of even more competition once they are launched in Mena.

“It is not a ‘one player wins it all’ business, different providers complement each other. OTT subscription prices allow customers to have more than one service.

It is a great time to watch content,” says Danny Bates, co-founder and chief commercial officer at Starzplay. 

The online subscription video market is pursuing the same growth pattern that the pay TV market had followed in the region.

By 2023, online video subscriptions will reach almost five million, while revenues will reach $416 million according to the IHS Markit report.

Much of the demand for streaming services is coming from the UAE and Saudi Arabia which together account for 49 per cent of the total subscriptions in Mena. The demand for online streaming subscriptions is likely to overtake pay TV subscriptions like OSN and beIN by 2025.

However, streaming services need to have premium content from the biggest studios in the world in order to stand a chance to compete and bring customers on board, and content remains an expensive product.

Additionally, the significance of telling relevant stories catering to Mena audiences is becoming key, hence the surge in investment in original content production.

Earlier this year, Shahid, MBC Group’s streaming platform relaunched, announcing a partnership with Disney and Fox to bring more than 3,000 hours of content to the biggest streaming library of Arabic content.

“Over the next two years, we aim to substantially increase the size of our investment into drama productions, thus increasing them fourfold, of which the majority will be original and exclusive content,” says Marc Antoine d’Halluin, group chief executive at MBC Group.

Netflix has also increased its original content offerings for Arab audiences while Starzplay recently announced a partnership with Academy Award-winning media and entertainment company, Image Nation Abu Dhabi, to create its first original content series.

Jawwy TV, an OTT platform launched in 2018 for the Mena region through Intigral, a digital provider of sports and entertainment, is seeking to make an impact in the way content is consumed in the region.

“Our roadmap is very intense, and we are trying to develop a product in order to match all the major OTT players in the world, but it will be dedicated for Mena content,” said Tony Saab, vice-president of products and content at Intigral.

The service continues to explore agreements with numerous players, in addition to creating original content and acquiring Arabic content.

As more users begin to consume content online, competition will no doubt intensify. One casualty of this growing competition was Malaysia-based iFlix, which pulled out of the Mena region two years after its launch in 2017, unable to replicate the success of its core market in South East Asia.   

“Streaming services have just scratched the surface of the market in Mena, despite all the [high] numbers,” says Bates who believes that the market is still establishing itself, and businesses will have to continue to evolve and strengthen their product to meet the rising demand.

According to Bates, “iFlix never really came into the region, they had success in Asia, but they came to Mena with the exact model, while it is a different territory, people, culture and ways of doing business”.

For him, it was not about lack of market demand that caused iFlix to exit, it was unfit execution, something that every OTT player should bear in mind.

source: wamda