Investing in Emerging Markets: Middle East
Foreign Direct Investments in the
Middle East
In 2011, 928 new projects in 7.8% more than in 2010
Source: E&Y 2012 attract...
GCC countries attract the highest FDI
projects in value
• FDI reached $26.4 billion in 2012
• Increase in flows have also ...
Middle East equities are too big and
liquid to be ignored
The general indices of stock markets in the
Arab region recorded...
Dow Jones Arabia Titans 50 Index (1 year): recorded an
average growth of 30.2% in the last 12 months
Source: djindexes.com
Dubai Financial Market General Index (1 year)
Since the start of 2013, the Dubai stock market has registered a near 200%
g...
UAE and Qatar were upgraded to Emerging
Markets status by MSCI
An estimated capital inflow of US$ 3 billion into
the regio...
The Middle East is not a story of turmoil,
political conflicts and wars
One of the biggest tech IPO in the world in 2012
(...
It’s a story of growth.. beyond oil
Number of internet users worldwide doubled between
2007 and 2012 from 1.15 billion to ...
High growth of mobile penetration and
mobile broadband
Mobile penetration in the Arab region is around 110%
71 million mob...
Smartphones & tablets penetration in
Middle East
Smartphones penetration in the region:
• UAE: 62%
• KSA: 60%
• Jordan: Ar...
Jordan
Lebanon
Egypt
United Arab
Emirates
With rising levels of connectivity,
entrepreneurial activity and access to
inexp...
Emerging tech trends: Digital Arabic
Content & Advertising
Digital Arabic content is estimated at $18 billion
in 2011, pre...
In 2010, more than 75 percent of all Arabic
content was hosted by three major portals:
Maktoob, d1g and Jeeran
Today, more...
Yahoo!Maktoob: One acquisition boosting the
tech industry
Sold to Yahoo in 2009
Raised 100M after Maktoob deal, created 8 ...
Rise of e-Commerce in the region
e-Commerce in the Middle East has grown from almost zero in
2008 to a $9 billion market i...
Significant investments of ~$250 million since 2010
with leading companies including MarkaVIP, Namshi, and Souq
Investors ...
Emerging e-Commerce startups
• Launched in January 2013 and is targeting a market of
$5-8 billion in regional home décor ...
e-Health services
The total addressable market for eVisits in the
GCC is about $2-3 billion
• Saudi Arabia’s Integrated an...
• UAE Ministry of Health (MoH), the country’s telecom
operators Etisalat and du to develop and implement
the country’s wid...
Ed-tech startups and MOOCs
In Egypt, Skills Academy
(formerly known as
eduudle) was launched in
early 2013 and now has
ove...
Other emerging industries
E-payments & Financial services
Digital Content
B2B Enablers
Wearables
Ed-tech
Mobile Apps
Rise of Startup Financing
Early stage funding:
Oasis500 & Flat6labs in numbers
• 27 waves of entrepreneurs; trained over 1500
entrepreneurs;
• Invested in more than 71 p...
Venture capital funds
Corporate venture capital
Investment tie-ups
.. and more funds are launching
Wamda Ventures: $75M, invest $1 - $3M in tech
growth-stage businesses
Rocket Internet and ...
Not only funding.. also large corporations are
drawn to the Arab region’s fast growing market
and sophisticated talent
[PREMONEY 2014] Aramex >> Fadi Ghandour, "The Global VC: Middle East"
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[PREMONEY 2014] Aramex >> Fadi Ghandour, "The Global VC: Middle East"

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[PREMONEY 2014] Aramex >> Fadi Ghandour, "The Global VC: Middle East"

  1. 1. Investing in Emerging Markets: Middle East
  2. 2. If the Arab region was a single country.. “.. its 2011 GDP would have been more than $2.3 trillion, making it the world’s eighth-largest economy—bigger than India or Russia” More than half of its population is under 25 years of age, making it one of the world’s most youthful markets
  3. 3. Foreign Direct Investments in the Middle East In 2011, 928 new projects in 7.8% more than in 2010 Source: E&Y 2012 attractiveness survey, Middle East
  4. 4. GCC countries attract the highest FDI projects in value • FDI reached $26.4 billion in 2012 • Increase in flows have also been facilitated by the significant improvements made by individual countries in the ease of doing business: UAE ranked at 23 according to World Bank Ease of Doing Business Index
  5. 5. Middle East equities are too big and liquid to be ignored The general indices of stock markets in the Arab region recorded an average growth of 23.13 per cent in 2013 The performance of GCC markets was on par with developed markets and better than emerging markets
  6. 6. Dow Jones Arabia Titans 50 Index (1 year): recorded an average growth of 30.2% in the last 12 months Source: djindexes.com
  7. 7. Dubai Financial Market General Index (1 year) Since the start of 2013, the Dubai stock market has registered a near 200% gain to become the best performing financial market in the world.
  8. 8. UAE and Qatar were upgraded to Emerging Markets status by MSCI An estimated capital inflow of US$ 3 billion into the region a year after the upgrade (by June 2015) Both countries now considered by MSCI to have the same investment status as the likes of China and Brazil
  9. 9. The Middle East is not a story of turmoil, political conflicts and wars One of the biggest tech IPO in the world in 2012 (& the biggest in MENA since 4 years) was in fact.. in Iraq Asiacell Communications, Iraqi telecom operator, raised $1.3 billion in the biggest IPO in the region since 2008 Asiacell’s IPO, doubled the stock market capitalization from $4.6bn to $9.2bn
  10. 10. It’s a story of growth.. beyond oil Number of internet users worldwide doubled between 2007 and 2012 from 1.15 billion to around 2.4 billion The Middle East had the 2nd biggest increase of internet users (294%), after Africa (317%) Today, there are more than 135 million individuals using the Internet in the Middle East & North Africa (MENA) and more than 71 million people actively using social networking technologies
  11. 11. High growth of mobile penetration and mobile broadband Mobile penetration in the Arab region is around 110% 71 million mobile broadband subscriptions: 19% regional penetration In 2013, mobile data traffic in Middle East and Africa grew 107%, Asia Pacific showed 86% growth, North America 77%, and 57% in Western Europe
  12. 12. Smartphones & tablets penetration in Middle East Smartphones penetration in the region: • UAE: 62% • KSA: 60% • Jordan: Around 50% • Egypt: 26% 20.9% of cellular users in KSA and UAE own a tablet
  13. 13. Jordan Lebanon Egypt United Arab Emirates With rising levels of connectivity, entrepreneurial activity and access to inexpensive technologies, the Arab region is a hub for innovation, disruption and growth
  14. 14. Emerging tech trends: Digital Arabic Content & Advertising Digital Arabic content is estimated at $18 billion in 2011, predicted to hit $28 billion in 2015 With a population of 28.3 million, Saudi Arabia ranks #1 globally in YouTube views per capita Comparing total YouTube views, the Middle East ranks second, behind the US
  15. 15. In 2010, more than 75 percent of all Arabic content was hosted by three major portals: Maktoob, d1g and Jeeran Today, more and more content startups are emerging and filling this space
  16. 16. Yahoo!Maktoob: One acquisition boosting the tech industry Sold to Yahoo in 2009 Raised 100M after Maktoob deal, created 8 new companies Jabbar & Souq Groups employ 1000 people More than 2000 jobs created (including Jabbar, Souq, Maktoob, MarkaVIP and others)
  17. 17. Rise of e-Commerce in the region e-Commerce in the Middle East has grown from almost zero in 2008 to a $9 billion market in 2012. Projections point to strong growth to $15 billion in 2015, a 2x increase from 2011 • In 2012, over 30 million people shopped online, an increase of 65% from 2011 • 100% growth in e-commerce shipments from 2012 to 2013 from cross border e-commerce in MENA • 20% shipments growth from international e-commerce Largest markets: Saudi Arabia, UAE & Egypt
  18. 18. Significant investments of ~$250 million since 2010 with leading companies including MarkaVIP, Namshi, and Souq Investors in these companies have included Naspers, Rocket Internet, Summit Partners, Tiger Global Management, J.P. Morgan, and others..
  19. 19. Emerging e-Commerce startups • Launched in January 2013 and is targeting a market of $5-8 billion in regional home décor and furnishing • Net incoming orders grown by 484% from January 2013 to April 2014, despite reduced marketing spend • Generated over $2 million of net bookings year-to-date • Raised a total of $9.3 million since October 2012 • World’s largest Arabic online bookstore offering more than 10 million titles from 30,000 publishers in both English and Arabic • Customers in Saudi Arabia, Jordan, Kuwait, the UAE and 65 other countries including Turkey, the US, and the UK • Raised first round of $400K after 7 months of launching, raised another $600K and now raising series A
  20. 20. e-Health services The total addressable market for eVisits in the GCC is about $2-3 billion • Saudi Arabia’s Integrated and Comprehensive Health Program (ICHM), the largest e-Health network in the world • Connecting more than 3,500 healthcare facilities with about 70,000 beds through 1400 virtual servers under a single integrated and automated patient information sharing network
  21. 21. • UAE Ministry of Health (MoH), the country’s telecom operators Etisalat and du to develop and implement the country’s wider mHealth program • Dubai Healthcare Authority’s (DHA) recently launched “Smart Healthcare Initiative” in conjunction with Samsung Data Systems (Samsung SDS) and INDEX Holding introduces a suite of new smart eHealth services for both healthcare professionals and patients
  22. 22. Ed-tech startups and MOOCs In Egypt, Skills Academy (formerly known as eduudle) was launched in early 2013 and now has over 8.1 million users In Saudi Arabia, Rwaq, a platform developing and disseminating local academic expertise online has already attracted tens of thousands of local users since its launch in September 2013 In Lebanon, Menaversity launched in November 2013, offering AMOOCs on professional and practical skills In Jordan, QRF partnered with MIT and Harvard’s edX to form Edraak, a new MOOC platform whose objective is to educate over one million Arab youths by 2018 International MOOC providers such as Alison, Khan Academy and Coursera have also penetrated the Middle East through partnerships formed with local entities Silatech (Qatar) and Taghreedat (UAE)
  23. 23. Other emerging industries E-payments & Financial services Digital Content B2B Enablers Wearables Ed-tech Mobile Apps
  24. 24. Rise of Startup Financing Early stage funding:
  25. 25. Oasis500 & Flat6labs in numbers • 27 waves of entrepreneurs; trained over 1500 entrepreneurs; • Invested in more than 71 portfolio companies in 3 years • Portfolio companies created more than 400 direct jobs and over 1,500 indirect job • Invested in 57 companies; 46 in Egypt and 11 in Saudi Arabia • Estimated number of jobs created to date: 300+ in Egypt and 50+ in Saudi Arabia • Seed funding of $3.5M in Egypt and Saudi • 50% of companies raise another round funding upon graduation
  26. 26. Venture capital funds Corporate venture capital Investment tie-ups
  27. 27. .. and more funds are launching Wamda Ventures: $75M, invest $1 - $3M in tech growth-stage businesses Rocket Internet and MTN to invest around $400M in e-commerce startups MEVP: $50M, focused on companies in ICT and creative industries i360 signed up to a $100M global fund of which 25 per cent is allocated to the region
  28. 28. Not only funding.. also large corporations are drawn to the Arab region’s fast growing market and sophisticated talent

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