"The Global VC: Middle East"

1. Investing in Emerging Markets: Middle East

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. 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. 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. 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. Dow Jones Arabia Titans 50 Index (1 year): recorded an
average growth of 30.2% in the last 12 months
Source: djindexes.com

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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. • 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. 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. Other emerging industries
E-payments & Financial services
Digital Content
B2B Enablers
Wearables
Ed-tech
Mobile Apps

24. Rise of Startup Financing
Early stage funding:

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. Venture capital funds
Corporate venture capital
Investment tie-ups

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. Not only funding.. also large corporations are
drawn to the Arab region’s fast growing market
and sophisticated talent