UAE – Emerging venture markets to see increased interest fro…

(MENAFN- Khaleej Times)

Published: Wed 23 Feb 2022, 8:26 PM

Emerging venture markets which span the Middle East, Africa, Pakistan, and Turkey will continue to be a hotbed for venture capitalists, experts said at the Step 2022 conference.

Speaking at the event, Philip Bahoshy, CEO and founder of MAGNiTT, said:“We saw almost a triple amount of capital being recorded into startups that come from these geographies. Last year, we saw more number of transactions invested in these regions than ever before, and this is a sign of increased appetite from investors.”

According to MAGNiTT’s research, a record-high funding volume of $6.8 billion was raised across 1,329 deals, marking a growth of 228 per cent in funding and 267 per cent in deals when compared to 2020.

Bahoshy also revealed that Fintech was the leading industry across all emerging venture markets and the industry of choice for VC investments, indicating increased innovation and digitalisation of the financial services sector.“Fintech startups were responsible for 21 per cent of all VC deals across emerging venture markets in 2021.”

Similarly, he pointed out that there were a record number of exits in the emerging markets space last year.“2,500 deals took place in the last five years in the Middle East and North Africa, and yet, only 160 exits have taken place. This means that only six per cent of all transactions have led to a liquidity event; compared to the US where we saw a record number of liquidity events, we are only beginning to scratch the surface of return on investments.”

Looking ahead, Bahoshy offered several predictions for 2022 such as more foreign companies coming into the region, and a growing number of cross pollination acquisitions. He noted that it was clear that the true potential for startups in emerging venture markets lies in the cross-pollination across geographies. This scaling resulted in the creation of regional players which emerge organically through expansion or inorganically through cross-market acquisition.

Jehan Ara, founder and CEO of Katalyst Lab, also spoke about how cross border collaboration is a very healthy sign for the industry. Highlighting the market in Pakistan, she noted that a sizable volume of young talent is making its way back into the country from destinations such as the US and Europe. Many of them, she said, are eager to translate their experiences in international markets into Pakistan in sectors such as Fintech, Edutech, and Healthtech.

“This is what is exciting about the industry today,” she said.“There is disruption that comes from growing digitisation, as well as interest in collaboration that goes beyond borders.”

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