What to expect in 2018? More exits, more family businesses, and more from KSA

During Wamda’s finale Mix N’ Mentor of the year, we spoke to several participating mentors and experts to gauge their input and highlights on what the MENA ecosystem is expecting to witness in 2018.

The event, which was the eighth of the year, took place on December 14, at the newly launched Youth Hub X space at the Emirates Towers, with the presence of some 60 entrepreneurs and 22 mentors.

Samih Toukan, chairman and CEO at Jabbar Internet Group

On the startups front, 2018 will witness more quality companies and one or two good exits from the region, in addition to an acceleration of exists.

On the VC side, bigger funds will be raised with brackets up to $200 million.

More family businesses will join the ecosystem investors’ stakeholders.  

2018 will probably be the year of Saudi Arabia, where the startups movement is growing faster than before. The Kingdom will become one of the startups centers.

Education is probably one of the traditional industries that hasn’t fully moved into the tech scene yet. We’ll see a lot of activities happening there.

Fares Ghandour, partner at Wamda Capital

We will see more acquisitions of tech businesses by traditional family-led corporates in the region. It is not yet a trend, but it will happen more and more starting 2018.

The outcome of the domestic situation in Saudi Arabia will significantly affect the ecosystem in one way or another.

Fintech solutions will be the next big thing over the next two years in terms of opportunities. We will start to see a trend in financial inclusion and payments and access to capital.

Issa Aghabi, investment officer at the International Finance Corporation (IFC)

As IFC, Egypt will be a strong part of the ecosystem and a significant part of our pipeline. Morocco and Tunisia will gain more strength and come into play in the MENA ecosystem.

From a geographical perspective, certain markets, such as Jordan, which have been dormant for a while will come back into play, especially with the government facilitation happening recently.  

In Saudi, entrepreneurship will flourish more and we will be witnessing the ‘birth of the Saudi entrepreneur’.

From a sectoral perspective, tech innovation will start growing in the Middle East, but won’t become very strong yet as we lack the right R&D culture and the deep tech culture. However, I think we will start seeing more disruptive innovative businesses such as autonomous driving.

Roland Daher, COO at Astrolabs

“2018 should be the year of proper uptake of capacity building at large for entrepreneurs and startups, people, and those who want to think and work like a startup.

Saudi Arabia will definitely see a big uptick in 2018 but if it doesn’t come with a massive upgrade on skills and entrepreneurial mindset, it will be less than the optimal momentum. In order to achieve that, the government and corporations should step in.

Good content providers should also step in. Mature startups which have learned a lot of tricks should be brought in to innovative programs provided to people of the region who are either graduating students or looking for jobs or looking to create jobs, starting or joining startups.”

Will Hutson, founder and CEO at LMTD

“We are going to see consolidation, maybe packaged up in exits, but we’ll see competitors merging for example.

There is a lack of exits and liquidity in investments which will make more LPs pressure on VCs to find better deals; in the hunt for that we are going to see startups doing bridge rounds at $3 or $4 million valuation.

Putting this in perspective, if you’re a business owner or a startup in 2018, monitor your cost: have five to seven months cash backup in the bank, if not think how to keep your money in the business and find efficient ways to grow and capture more leads.”

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