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Rade Jovanovic

The Middle East region has a large and growing economy, with a GDP of over $2.3 trillion if the Arab countries were a single economy. It also has a large youth population, with over half under 25 years old. Foreign direct investment in the region has been growing, reaching $26.4 billion in 2012, and individual countries have improved their business environments. Stock markets in the region saw an average 23% growth in 2013, on par with developed markets. Emerging technologies and internet usage are growing rapidly in the region. Venture capital funding of startups is also on the rise, with funds like Oasis500 and Flat6labs investing over $3.5 million in Egyptian and Saudi startups.

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Investing in Emerging Markets: Middle East
If the Arab region was a single country.. .. its 2011 GDP would have been more than $2.3 trillion, making it the worlds eighth-largest economybigger than India or Russia More than half of its population is under 25 years of age, making it one of the worlds most youthful markets
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
GCC countries attract the highest FDI projects in value FDIreached$26.4billionin2012 Increaseinflowshavealsobeenfacilitatedbythesignificantimprovementsmadebyindividualcountriesintheeaseofdoingbusiness:UAErankedat23accordingtoWorldBankEaseofDoingBusinessIndex
Middle East equities are too big and liquid to be ignored The general indices of stock markets in the Arab region recorded an average growth of 23.13 per cent in 2013 The performance of GCC markets was on par with developed markets and better than emerging markets
Dow Jones Arabia Titans 50 Index (1 year): recorded an average growth of 30.2% in the last 12 months Source: djindexes.com
Dubai Financial Market General Index (1 year) Since the start of 2013, the Dubai stock market has registered a near 200% gain to become the best performing financial market in the world.
UAE and Qatar were upgraded to Emerging Markets status by MSCI An estimated capital inflow of US$ 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 Chinaand Brazil
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 AsiacellCommunications, Iraqi telecom operator, raised $1.3 billion in the biggest IPO in the region since 2008 AsiacellsIPO, doubled the stock market capitalization from $4.6bn to $9.2bn
Its a story of growth.. beyond oil Number of internet usersworldwidedoubled between 2007 and 2012 from 1.15 billion to around 2.4 billion The Middle East had the 2ndbiggest 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 millionpeopleactively using social networking technologies
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
Smartphones & tablets penetration in Middle East Smartphonespenetrationintheregion: UAE: 62% KSA: 60% Jordan: Around 50% Egypt: 26% 20.9% of cellular users in KSA and UAE own a tablet
JordanLebanonEgyptUnited Arab Emirates With rising levels of connectivity, entrepreneurialactivity and access to inexpensive technologies, the Arab region is a hub for innovation, disruption and growth
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
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
Yahoo!Maktoob: One acquisition boosting the tech industry Sold to Yahoo in 2009 Raised 100M after Maktoobdeal, created 8 new companies Jabbar& SouqGroups employ 1000 people More than 2000 jobscreated (including Jabbar, Souq, Maktoob, MarkaVIPand others)
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: SaudiArabia, UAE& Egypt
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..
Emerging e-Commerce startups Launched in January 2013 andis targeting a market of $5-8 billion in regional home decorand 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 Worlds 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 countriesincluding Turkey, the US, and the UK Raised first round of $400K after 7 months of launching, raised another $600K and now raising series A
e-Health services The total addressable market for eVisitsin the GCC is about $2-3 billion SaudiArabiasIntegratedandComprehensiveHealthProgram(ICHM),thelargeste-Healthnetworkintheworld Connectingmorethan3,500healthcarefacilitieswithabout70,000bedsthrough1400virtualserversunderasingleintegratedandautomatedpatientinformationsharingnetwork
UAEMinistryofHealth(MoH),thecountrystelecomoperatorsEtisalatanddutodevelopandimplementthecountryswidermHealthprogram DubaiHealthcareAuthoritys(DHA)recentlylaunchedSmartHealthcareInitiativeinconjunctionwithSamsungDataSystems(SamsungSDS)andINDEXHoldingintroducesasuiteofnewsmarteHealthservicesforbothhealthcareprofessionalsandpatients
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, Menaversitylaunched in November 2013, offering AMOOCs on professional and practical skills In Jordan, QRF partnered with MIT and Harvards edXto 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 Courserahave also penetrated the Middle East through partnerships formed with local entities Silatech(Qatar) and Taghreedat(UAE)
Other emerging industries E-payments & Financial services Digital Content B2B Enablers Wearables Ed-tech Mobile Apps
Rise of Startup Financing Earlystagefunding:
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
Venturecapitalfunds Corporate venture capital Investmenttie-ups
.. and more funds are launching WamdaVentures: $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
Not only funding.. also large corporations are drawn to the Arab regions fast growing market and sophisticated talent

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03fadighandouraramex final-140626184136-phpapp02

  • 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 worlds eighth-largest economybigger than India or Russia More than half of its population is under 25 years of age, making it one of the worlds 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 FDIreached$26.4billionin2012 Increaseinflowshavealsobeenfacilitatedbythesignificantimprovementsmadebyindividualcountriesintheeaseofdoingbusiness:UAErankedat23accordingtoWorldBankEaseofDoingBusinessIndex
  • 5. Middle East equities are too big and liquid to be ignored The general indices of stock markets in the Arab region recorded an average growth of 23.13 per cent in 2013 The performance of GCC markets was on par with developed markets and better than emerging markets
  • 6. Dow Jones Arabia Titans 50 Index (1 year): recorded an average growth of 30.2% in the last 12 months Source: djindexes.com
  • 7. Dubai Financial Market General Index (1 year) Since the start of 2013, the Dubai stock market has registered a near 200% gain to become the best performing financial market in the world.
  • 8. UAE and Qatar were upgraded to Emerging Markets status by MSCI An estimated capital inflow of US$ 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 Chinaand 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 AsiacellCommunications, Iraqi telecom operator, raised $1.3 billion in the biggest IPO in the region since 2008 AsiacellsIPO, doubled the stock market capitalization from $4.6bn to $9.2bn
  • 10. Its a story of growth.. beyond oil Number of internet usersworldwidedoubled between 2007 and 2012 from 1.15 billion to around 2.4 billion The Middle East had the 2ndbiggest 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 millionpeopleactively 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 Smartphonespenetrationintheregion: UAE: 62% KSA: 60% Jordan: Around 50% Egypt: 26% 20.9% of cellular users in KSA and UAE own a tablet
  • 13. JordanLebanonEgyptUnited Arab Emirates With rising levels of connectivity, entrepreneurialactivity 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 Maktoobdeal, created 8 new companies Jabbar& SouqGroups employ 1000 people More than 2000 jobscreated (including Jabbar, Souq, Maktoob, MarkaVIPand 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: SaudiArabia, 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 andis targeting a market of $5-8 billion in regional home decorand 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 Worlds 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 countriesincluding 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 eVisitsin the GCC is about $2-3 billion SaudiArabiasIntegratedandComprehensiveHealthProgram(ICHM),thelargeste-Healthnetworkintheworld Connectingmorethan3,500healthcarefacilitieswithabout70,000bedsthrough1400virtualserversunderasingleintegratedandautomatedpatientinformationsharingnetwork
  • 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, Menaversitylaunched in November 2013, offering AMOOCs on professional and practical skills In Jordan, QRF partnered with MIT and Harvards edXto 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 Courserahave 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 Earlystagefunding:
  • 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. Venturecapitalfunds Corporate venture capital Investmenttie-ups
  • 27. .. and more funds are launching WamdaVentures: $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 regions fast growing market and sophisticated talent