Wamda, a platform to empower entrepreneurs in the Middle East / North Africa (MENA), has published an excellent study on the funding / entrepreneur eco-system in the region. The very good news is that startup funding is growing in the MENA countries with growth expected to accelerate in coming years. In fact this study, compared to a previous study back in 2009, showed over 3 times the companies receiving investment. The not so good news is there is still a long way to go but then you could say the same of just about any country on the globe.
The MENA region is “home to one of the highest unemployment rates globally” and creating an innovation / startup dynamic is incredibly important. As we all know small businesses are the engines of job creation around the world and to get small businesses started you need to have entrepreneurs that are will to take the necessary risk AND find the funding to get their ventures off the ground. There will always be challenges and hurdles but identifying the barriers and addressing them is the obvious approach.
Within the MENA region Jordan is the center of much of the positive activity along with Egypt, the UAE and Lebanon. The study notes that just 5 years ago business accelerators, VC funds, Angles AND crowdfunding platforms, such as Eureeca, were “minimally present” but that is changing today. The report indicates that funders are expected to expand their presence substantially in Saudi and the UAE over the next one to two years.
— Eureeca (@eureecamoment) October 31, 2014
The most prominent areas of entrepreneurism is Ecommerce /online, software and then telecom and mobile. So mainly in the digital realm. Interestingly most funded companies are young and run by male entrepreneurs but a good number are founded by females (22%) with 38% having at least one female founder.
While there are very encouraging signs and growth in access to capital the study acknowledges there is much work to be done. The report states that funders see a need for entrepreneurs needing better strategic planning and financial literacy skills. It was also noted that 70% of the entrepreneurs indicated that finding the right talent was very challenging when building a team.
To close the authors state that entrepreneurs and funders tend to agree that more capital is needed, but there are multiple ﬁnancial and non-ﬁnancial challenges that underpin this need.
The study included data from 254 entrepreneurs throughout the region who had accepted equity investments. The is a subset of a larger group of 768 MENA entrepreneurs the balance having not received equity investment. For any follower of the region this is a must read document as there is much potential but still much work to be done for the MENA countries.
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