With a definitive struggle on cards, UAEs start-ups held on to their nerves as they lure up and amass investments from both native as well as abroad sources within the COVID-19 Pandemic.
As per the latest report published via MagNITT, the Venture Capitalists poured an outflow of over $1Billion within the native Start-Ups the preceding year, that also signalled out a huge investor confidence, despite a certain scare from global COVID-19 Pandemic.
There is no doubt that within few of the territories the Start-Ups have borne the brunt of the COVID-19 Pandemic, that has unearthed a huge havoc out within the global markets. There is no denial that although Middle Eastern Start-Ups have also not been left untouched, however, they have hugely worn out the storm that brewed up there in the best manner possible.
As per the MagNiTT’s- the start-up data platform for emerging venture markets report, 256 investors that also included global Venture Capitalists within the Middle Eastern and North African territory (MENA), invested their finances within the native Start-Ups. A quarter of investors were founded outside the territory, with 11 percent base in the US.
Philip Bahoshy, MagNiTT, founder and CEO, further stated that: “Despite Covid-19, we saw continued interest from international investors and new funds investing in MENA based start-ups. As the ecosystem continues to mature, and as Magnitt further expands into Emerging Venture Markets, we expect to see increased cross pollination across markets like Turkey and Pakistan, as well as increased international interest in the MENA region.”
Founder and Chairman of OQAL Angel Investors Network, Faris AlRashed, stated that “2020 had a noticeable impact on founders’ and investors’ behaviours. We have witnessed an increased number of newly formed start-ups in strong founder markets and a larger window of opportunity being presented to MENA investors, with growth start-ups securing funds amidst the pandemic. The MENA market evolution has attracted international investors, with more funds investing and participating, especially at growth stage financing.”
The MagNiTT report also stated that within the initial half of 2020, around a total net worth of $659 Million was held up in balance, representing around 95 percentage of overall venture investments as looked up from the preceding year, and around 251 investment deals that were initially held up.
FinTech emerged as one of the best popular sectors for investors within the year 2020, with around 63 firms contributing their share in form of investments within the Mobile as well as online Payment resolutions.
For an Illustration: – A Dubai-UAE-based tech firm, Seafood Souq had held up robustly to their ecosystem and globalized Seafood trade that witnessed an upsurge of 615 percent within this fiscal year, and as well as had both the native and global investors to cater to their expansion within the preceding year 2020.
The CEO as well as Co-founder Seafood Souq, Sean Dennis, stated that
: “As we expanded internationally, local and international investors saw the value proposition that we bring to the global Seafood supply chain and the direct impact we have in the UAE as our home market.”
With the better requirement for digitizing supply chains becoming more seeming, he further added that fundraising during the pandemic was no dissimilar than in other years as COVID-19 emphasized inefficiencies in the supply chain.
For another Dubai-based Start-up Seez, a digital automotive platform, funding during the COVID-19 pandemic has been recognized thought-provoking, despite native trends. While the start-up completed raising Series A funding in Feb. 2020 as the pandemic hit, they have obligated to adapt to the times.
“Since [the pandemic hit] we had massive growth on product and partnerships, especially as we pivoted into the B2B digitalisation and FinTech space, but that hasn’t translated into revenue yet because of the economic situation,” Seez CEO Tarek Kabrit stated.
Kabrit also a venture partner alongside Nuwa Capital stated that: “So now we’re raising funds again, but rather than a Series B round we’ve opted for a smaller bridge round because we’re expecting our valuation to grow sizably in the next six months, and we don’t want to raise a large round at a low valuation. Investors want to see growth, and a bridge round gives us time for these projects to materialize into revenue so that we can get a higher valuation when we do raise our Series B.”
According to Crunchbase, the number of Venture Capital arrangements for start-ups in the Gulf deteriorated in the first quarter, but the total value of funding improved slightly. Venture capital deals declined by 22 percent, MagNiTT stated in March; in disparity towards the quantity of venture capital rounds in the US had been dropped by 44 percent around the same time.