How the Arab startup ecosystem grew in 2012 [Videographic]

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In the past year, the startup ecosystem in the Arab region took a leap forward, with several new launches, a few major acquisitions, and a few large funding rounds, especially from external investors; overall, investment in startups went from an estimated US $10 million in 2010 to US $72 million in 2012. 

Startappz Media has released a new videographic, produced in collaboration with DDArabia, that takes a quick look at the changes.

Some of the major acquisitions include Thompson Reuters' buyout of Zawya; several VCs also upped their ticket rounds, with MEVP in Lebanon investing US $1 million in Cedar Books, and online travel club TravelerVIP raising US $1 million in a round led by BECO capital. STC also made major investments in ikooAcadox and Gengo. Namshi and Souq.com, both of which took on investment from firms based outside the Middle East, accounted for 80% of investments made this year.

A few regional players also acquired local players, such as Ecommerce SEA acquiring Mallna; and traditional media stepped into online investment, with MBC Ventures investing in Falafel Games, Aranim Media Factory, and SuperMama.

Several incubators, accelerators, and support organizations launched, including Cloud5, Vodafone Xone, Turn8, and Beirut Digital District; Flat6Labs also expanded to Jeddah.

The second segment of the video demonstrates the growth of mobile and tablet devices, social media, e-commerce, and ad spend; unfortunately, we found it extremely difficult to read, given its tiny font size, so we're writing out the statistics for you here:

  • 1 billion smartphones will be shipped worldwide in 2013.
  • Up to 20% of smartphone buyers will not use their phone to access the internet, while 80% are connected.
  • The tablet market in the Middle East and Africa grew by 90% year on year, closing with 1.36 million units in the fourth quarter of 2012.
  • Digital ad spend in the Middle East will grow at an annual growth rate of 35% by 2015, reaching 10% of total ad spend.
  • Only 2 to 3% of the digital budgets of Middle Eastern companies are allocated to mobile and tablet advertising.
  • In 2012, Facebook users in the Middle East grew by almost a third, reaching 45.4 million users.
  • The Arab region has close to 2.1 million active Twitter users, posting 17 million tweets per day, with 1.5 billion characters.
  • LinkedIn reported 4 million Arab users in 2012. 
  • Saudis are the fastest growing group on Twitter with an increase of 3,000%.
  • E-commerce sales grew 45% in 2012 reaching US $15 billion; 20% yearly growth is expected for the next 3 years.
  • The current total value of offline retail is approximately US $425 billion, which is over 28 times as much as current online revenue; the opportunity is ripe for going online.

Check out the full videographic below; let's see what the final quarter of 2013 brings.

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