More than 45 start-ups valued at a minimum of $1 billion are expected to emerge from the Middle East and North Africa by 2030, led by Saudi Arabia, a report from STV showed.
The acceleration of the start-up ecosystem is being driven by a growing talent pool, technology infrastructure and consumer adoption, as well as broad macroeconomic and regulatory reforms, all catering to Mena's growing technology-driven population, the Saudi technology venture capital fund said in the study released on Tuesday.
The kingdom, the Arab world's biggest economy, is "undoubtedly the gravitational centre" of the broader Mena catchment area, and its appeal is primarily driven by two factors — the size of its gross domestic product and the depth of its stock market, which increases opportunities for initial public offerings (IPOs), it said.
"The opportunity to exit through an IPO positively impacts the strategy and the level of ambition of Mena tech ventures that are moving from developing a specialised and conventional offering to become attractive acquisition targets for global players, to developing solutions tailored more to the regional market with the vision to become self-sustainable regional leaders," STV said.
Start-ups have grown exponentially over the past few years as they use innovation to address consumer needs, and they increasingly seek funding from global investors to accelerate their development.
The are more than 1,100 unicorns — start-ups with a valuation of at least $1bn — around the world, with a cumulative valuation of more than $3.83 trillion, private equity company CB Insights has calculated.
Three are hectocorns, or those worth at least $100bn — TikTok parent ByteDance, Elon Musk's SpaceX and e-commerce platform Shein.
Some of the world's biggest companies used to be unicorns, including technology majors Facebook and Google, and home rental company Airbnb.
STV said venture capital deployment in Mena more than doubled to $2.58bn last year from $1.09bn in 2020. In Saudi Arabia alone, it almost quadrupled to $548 million last year from $148m in 2021, it said.
A separate study last month from start-up data platform Magnitt and Saudi Venture Capital showed that capital funding in the kingdom, surged more than three-fold to $584m in the first half of 2022, surpassing the total for the whole of 2021, as the kingdom continues to accelerate its digital transformation projects.
Start-ups in Mena, meanwhile, raised $105m from 44 deals in July, the lowest amount of monthly funding so far this year as global macroeconomic trends dampened investor sentiment, according to venture capital platform Wamda.
STV's report said Mena's young and fast-growing population has high spending power and is keen to utilise technology for their activities, including for shopping, transactions, learning and socialising.
More than 55 per cent of the region's population is younger than 30 years and they are avid consumers of digital media with an average daily social media consumption of 3.5 hours, it said.
"These statistics set Mena apart in comparison to any other region across the world," STV said.
This, in turn, translates into strong demand for digital products and services across industries. STV said this "attractive user base" is an opportunity for technology ventures to cater to their demands and "achieve accelerated growth and deliver strong unit economics".
However, the STV report said the ratio of venture capital development to gross domestic product in Mena was still much lower than that registered by other countries and regions, showing that yearly invested capital still has room to grow at least five to 10 times more before catching up with peer regions.
“The start-up ecosystem in the Mena region is at an upward tipping point," Luca Barbi, general partner and chief operating officer at STV, told The National.
"Furthermore, benchmarks show that there is a clear opportunity to create more than 45 unicorns by 2030.
"We look forward to working with the founders of our current and future portfolio companies, as well as the wider ecosystem, to make this prediction a reality.”
Of the at least 45 unicorns STV is predicting to be created by 2030, one is forecast to have a valuation of about $20bn and become a decacorn, or a start-up with a value of at least $10bn. Five are predicted to be valued at $5bn by 2030, while 13 are seen with $2bn, it said.
Despite these projections, STV still believes that the next seven years will see the development of more decacorns.
STV's study analysed unicorn data in markets with GDP and/or population comparable to Mena, such as Brazil, Germany, India, South Korea, the UK and the US.
In May, STV joined forces with Facebook’s parent company Meta to support technology start-ups in Saudi Arabia and the wider Mena region.
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
The specs
Engine: 3-litre twin-turbo V6
Power: 400hp
Torque: 475Nm
Transmission: 9-speed automatic
Price: From Dh215,900
On sale: Now
Killing of Qassem Suleimani
THREE
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Jetour T1 specs
Engine: 2-litre turbocharged
Power: 254hp
Torque: 390Nm
Price: From Dh126,000
Available: Now
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
The Bio
Hometown: Bogota, Colombia
Favourite place to relax in UAE: the desert around Al Mleiha in Sharjah or the eastern mangroves in Abu Dhabi
The one book everyone should read: 100 Years of Solitude by Gabriel Garcia Marquez. It will make your mind fly
Favourite documentary: Chasing Coral by Jeff Orlowski. It's a good reality check about one of the most valued ecosystems for humanity
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THE DEALS
Hamilton $60m x 2 = $120m
Vettel $45m x 2 = $90m
Ricciardo $35m x 2 = $70m
Verstappen $55m x 3 = $165m
Leclerc $20m x 2 = $40m
TOTAL $485m
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PRISCILLA
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Why seagrass matters
- Carbon sink: Seagrass sequesters carbon up to 35X faster than tropical rainforests
- Marine nursery: Crucial habitat for juvenile fish, crustations, and invertebrates
- Biodiversity: Support species like sea turtles, dugongs, and seabirds
- Coastal protection: Reduce erosion and improve water quality
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
Dust and sand storms compared
Sand storm
- Particle size: Larger, heavier sand grains
- Visibility: Often dramatic with thick "walls" of sand
- Duration: Short-lived, typically localised
- Travel distance: Limited
- Source: Open desert areas with strong winds
Dust storm
- Particle size: Much finer, lightweight particles
- Visibility: Hazy skies but less intense
- Duration: Can linger for days
- Travel distance: Long-range, up to thousands of kilometres
- Source: Can be carried from distant regions
UK-EU trade at a glance
EU fishing vessels guaranteed access to UK waters for 12 years
Co-operation on security initiatives and procurement of defence products
Youth experience scheme to work, study or volunteer in UK and EU countries
Smoother border management with use of e-gates
Cutting red tape on import and export of food
Ads on social media can 'normalise' drugs
A UK report on youth social media habits commissioned by advocacy group Volteface found a quarter of young people were exposed to illegal drug dealers on social media.
The poll of 2,006 people aged 16-24 assessed their exposure to drug dealers online in a nationally representative survey.
Of those admitting to seeing drugs for sale online, 56 per cent saw them advertised on Snapchat, 55 per cent on Instagram and 47 per cent on Facebook.
Cannabis was the drug most pushed by online dealers, with 63 per cent of survey respondents claiming to have seen adverts on social media for the drug, followed by cocaine (26 per cent) and MDMA/ecstasy, with 24 per cent of people.
Need to know
When: October 17 until November 10
Cost: Entry is free but some events require prior registration
Where: Various locations including National Theatre (Abu Dhabi), Abu Dhabi Cultural Center, Zayed University Promenade, Beach Rotana (Abu Dhabi), Vox Cinemas at Yas Mall, Sharjah Youth Center
What: The Korea Festival will feature art exhibitions, a B-boy dance show, a mini K-pop concert, traditional dance and music performances, food tastings, a beauty seminar, and more.
For more information: www.koreafestivaluae.com
UAE currency: the story behind the money in your pockets
Company profile
Date started: Founded in May 2017 and operational since April 2018
Founders: co-founder and chief executive, Doaa Aref; Dr Rasha Rady, co-founder and chief operating officer.
Based: Cairo, Egypt
Sector: Health-tech
Size: 22 employees
Funding: Seed funding
Investors: Flat6labs, 500 Falcons, three angel investors
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