VC investments are on the rise in the Arab region which is a great trend that hopefully continues. I thought it would be interesting to look at small sample size of existing investments and breakdown investments by opportunity. Here is my method
2. Broke down the companies into the following sectors: E-commerce, Mobile, Digital Content, Software or Other - this was based on the description of the startups. Note that others include startups in the service or hardware sectors.
3. Took a the total number of startups into account including any exits.
Here are the results:
Not surprisingly, E-commerce represented almost a 1/3 of the investments. However, it worth noting that the digital content space was represented in the highest proportion at 33%. This is an exciting area of investment since online digital Arab digital content represents ~2% while the Arabic speakers online represent close to 9%.
When breaking down the investment by investors there were some interesting geographic trends. Oasis500, based in Amman, invested almost equally in Digital content and E-commerce. Flat6Labs, based in Cairo and recently Jeddah, had a stronger focus on mobile compared to any of the other investors or accelerators in this study. MEVP, based in Beirut, and Wamda Capital which is based in Dubai, had a more even distribution amongst E-Commerce, Digital content and Software.
Clearly, the E-commerce and Digital content space dominated the investments in this small study. However, it is interesting to see a more focus on mobile technologies in Egypt which is the most populous Arab country but not as much of a focus on E-commerce. This could be due to the lower disposable incomes available in Egypt. In would expect E-commerce to eventually settle since there are clearly a few big players that will likely dominate the region. However, mobile and software startups will likely continue to increase and will complement the E-commerce space.
What do you think? Would you like to see a bigger study on these investment sectors. Do let me know.
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