2014 was certainly a year of impact for the entrepreneurial scene of the Arab region. From increasingly accessible money in the streets, to startups scaling in the right direction, to more awareness of the ecosystem’s needs being met by startups themselves.
In addition to that, the year witnessed another big turnaround: more corporates working with startups, and a fair amount of successful exists.
Below are four of the major changes that occurred to the entrepreneurial ecosystem in the Arab region.
- Big funds announcements
We saw more funds launched to target growth stage startups, versus early stage ones. Which means there will be more money in the market available for funding.
Some of the main big funds that were launched were the Impact Fund by Middle East Venture Partners (MEVP), Mobily Ventures, Badia Impact Fund by Silicon Badia and the Wamda Fund by Wamda Capital. For more details check our end-of-year article on the region’s biggest 2014 funds.
- New payment startups boosting
The e-commerce sector in the Arab region continues to grow into a healthy one, month on month, adding varying and increasing online payment solutions.
While global funding payment companies decreased in 2014, and investors like Bain Capital Ventures‘ Matthew Harris believes this slowdown in funding to be a natural evolution of what had been a relatively young market, the Arab region witnessed a surge in payment services.
While Paytabs is growing in Saudi, Jordan witnessed a slew of online payment services such as HayperPay (who also expanded to the UAE), Cashbasha, Cashi, Cashna and Hyper. Egypt also contributed its own share with its first government launched payment service Fawry, in addition to e-wallet ElMasary.
In Lebanon, we’ve also witnessed the launch of Yellow, the first bitcoin payment processor.
With six successful exits this year, it woud be fair to say that the MENA region is on the right track.
Arabic content for women got the biggest share of exits, with Lebanon's recipe portal Shahiya being acquired by Japan's Cookpad for $13.5M USD, plus the acquisition of digital Arabic content producer Diwanee by Paris-based digital publishing company Webedia.
Dubai based daily deals platform Cobone, was acquired by Middle East Digital Group and online publishing, content, and services company. As a private transaction the cost of the acquisition was not released. This acquisition comes more than a year after Tiger had acquired Cobone from Jabbar Internet Group in March 2013 for a reported $40M USD.
Jordan's food ordering platform, ifood.jo became the fourth brand to join Yemeksepeti’s expanding portfolio, alongside Yemeksepeti.com, foodonclick.com, and clickdelivery.gr. The leading Turkish food ordering site acquired majority shares in the startup for an undisclosed amount.
Pozitron, the Turkish mobile commerce technology company founded in 2000 by Fatih Isbecer, was acquired in February 2014 for $100 million USD, by Monitise, a leading UK-based mobile payment solutions company.
- Corporates looking to work with
In the context of Corporate Entrepreneurship Responsibility (CER), many corporations from the region expressed their intentions and interests in working with startups. In spite of the foreseen challenges, many committed to share their resources with young local startups. Some are helping with direct investment while others offer incubation, mentorship and direct services.
There were six success stories for the region with Aramex, Zain, CISCO, DP World, Vodaphone Egypt, The Zubair Corporation. Check details of their activities here.
Additionally, Wamda also announced in the end of December, the launch of its latest program, Traxn, meant to help startups scale through corporations. Zain is the first corporation to pilot Traxn and launch it under their CER activities.