2. Arab World Stats: A High Growth Emerging Market with High Potential & Resources
Key Stats (2012E) Key Promising Markets (Population, GDP (PPP)) (2012E) Key Internet Stats (2012E)
•% Youth: 60% •KSA (26.5m, $733bn) UAE (5.3m, $268bn) •Total Users: 100m
•Total GDP (PPP): $2.9 Tri •Egypt (83.7m, $534bn) Lebanon (4.1m, $64bn)
•Yearly Growth (Est.): 20%
•GDP Growth (Est.): 4.4% •Morocco (32.3m, $171bn) Jordan (6.5m, $38bn)
•Unemployment(2) (Est.): 14% •Penetration rate (Est.): 24.7%
•KSA (Penetration:44%, growth: 19%)
•Egypt (Penetration:26%, growth: 20%)
•UAE (Penetration:71%, growth: 8%)
Reforms & Social Characteristics Key Mobile Stats (2012E)
• Aggressive liberal economic & social
•Total Users: 286m
reforms
•Growth (Est.): 5.2%
•Arab spring: political reforms
•Penetration rate (Est.): 85.7%
•One language and close dialects
•3G penetration rate (Est.): 38%
• Similar cultural, artistic &
entertainment references •KSA: (Penetration:168%, growth:2%)
•Egypt: (Penetration:86%, growth:3%)
•Intensified circulation of humans and
capital •UAE: (Penetration:267%, growth:16%)
Note: Latest available data
(2) Calculated out of total Arab labor force on a weighted average basis
2 Source: MEVP, IMF, Worldbank
3. Arab Internet & tech sectors overview
Selected tech segments with high growth potential
Software &
E-payment / Mobile
ICT (non Gaming Streaming Ecommerce Portals
E-banking apps
internet)
Market • $180bn GCC • $150m (GCC • Nascent • $21bn • $238m (ad • $4bn mobile • $15.65bn
Size (2012) estimates apps) (broader e- market GCC & payment 2013E in
• $400m (Arab commerce, Levant) across GCC &
MMO in inclusive of e- MENA Levant
2014E) government)
• 8%-10% in • 100% 2009- • High • 31% • 10% • 75% • 46% (2011/
Growth GCC, 2010E 2014 CAGR prospects (2012/2013) (2012/2015 (2011/2012) 2015) CAGR
for MMO CAGR) for Mobile in KSA
games payments
Opportunity • Growing • Need for • Lack of legal & • Only few • Increase of • Nascent • Overall growing
businesses Localized & comprehensive players awareness market market
with IT needs: target content offering that is operational for
pan Arab with strong international • High interest • Increasing smart
• Financial • Content up to performance brands to for financial phone penetration
institutions date with invest (after institutions to
international • Structural Arab spring) upgrade • Recent
• ERPs key markets challenges to technology introduction of 3G
with high be resolved • Need for in various
• SMEs spending (8ȼ (e-payment, local content countries
daily ARPU in logistics, etc.)
GCC)
3 Source: MEVP, Nordic Industries Development, Arab Media Outlook, eMarketer July 2012
4. Challenges
Main Challenges Market Trends
• Internet infrastructure: Payments, • More solutions to be developed for payment
(heavy reliance
Infrastructure • Shipping & Logistics
On cash on delivery for ecommerce)
• Lack of e-regulations • Involvement of local and international players
(Aramex, DHL, etc.)
• Lack of local content (5% of world • Increase of online content addressing the Arab
Local population speaks Arabic, 1.5% of world in Arabic language
content content is Arabic) • Increased data analytics on Arab consumer
• Requires better understanding of behavior and interests
customers needs and segments
• Lack of technology expertise • Tendency for startups to outsource technology
Internet
• Most teams in MENA tend to lack internal tech
talent
support
• Heavy legal structure non-adapted to • Increased awareness in MENA countries
Legal innovation accompanied with Arab spring and market
liberalization
• High corruption and long processes
• Political instability in the region • Arab spring and potential liberalization of political
Political systems
• Unclear vision • According to MENA PE Association, 58% of firms
don’t think that political unrest has an impact on
their investment decisions
4 Source: MEVP
5. VC Industry in MENA
Funds raised by VCs (in $M) VC transactions by country since 2006
32 VC firms in Morocco
2011 Tunisia
11%
318 (Est.) 20% active Average
Jordan
300 9% Investment
223 Lebanon size:
194 $1m to $3m
164 6% UAE
Egypt
9% 57%
34 Others
3%
5% Total: 182
2006 2007 2008 2009 2010 2011
Number of VC transactions in MENA Sector concentration since 2006 by transactions
46
38 34%
36 IT and software
21 46% Industrial Manufacturing
20 21
Telecom
Others
7%
2006 2007 2008 2009 2010 2011 13% Total: 182
5 Source: MENA Private Equity Association
6. 3 examples of promising startups in MEVP portfolio
Music Streaming E-payment Job Search
• Mobile music and web music • E-payment aggregator • Job search engine with an
Description streaming service with premium (offering of prepaid, credit and intuitive user interface and
Arabic and foreign music content mobile payments solutions) higher relevancy
Location Lebanon Jordan UAE
• Senior expert from music & • Senior experts from MENA • Serial Entrepreneur (founder
Team mobile tech industries online payment and pre-paid of Zawya)
Leaders card industries
• Pan Arab • Pan Arab • GCC initial stage
Target Market
• Provide one of the first mobile & • Address structural problems; • Innovation in profiling and
Opportunity web music experience across the enabling e-merchants to matching job seekers to employers
Arab world monetize their business in and careers professionals
MENA
• Major Arabic & English labels • Launched in 2011; witnessing • Aggressive growth
Progress signed (c.2M songs) high growth from e-merchants
• Imminent launch of mobile willing to do business in
products MENA
6
7. Thank you
MEVP Portfolio Companies
Mobile Payment
E-payment Music Streaming
Arab Mobile Games
Job Search
E-commerce Treasury Management
Software
Food Portal
Cedar books Crowdfunding
Retail E-commerce
Arab MMO
7
