What’s your fav marketplace?

What’s your fav marketplace?

It’s time we dust off our marketplace analysis. Also because we’ve recently invested in one (Retailo) and the startup news of the past days didn’t talk about anything else (almost). So this month we reviewed 200 of them.

 

The next stop of our Seed_2021 program is Egypt. Book your pitch slot here.

 

By the way,
Have you heard of the HR wizards who will build your HR department? WizHRD works with tech startups and SMEs. How about hiring a dedicated HR manager starting $299/month?✨

 


 

AVC MENA Marketplace 2021 Collection

 

Groceries, food & bev, general retail, services…

 

In 2020, direct-to-consumer (DTC) e-commerce growth reached 500% for some regional players.

 

Buyers have developed new habits. They became more digital-savvy. 8% of GCC households bought goods online (up from 2%), however the figure for developed markets (like US, China or Germany) is around 25%. The online retail boom in the GCC (and MENA) is only at its beginning.

 

Buyers also like to shop regionally. Cross-border shopping now accounts for two-thirds of all sales. Kearney forecasts the GCC e-commerce sector growth at 20% this year, while reaching a value of $50 billion by 2025. Very possible at this pace.

 

We present you AVC MENA Marketplace 2021 Collection.

 

200 MENA marketplaces. 12 categories. 12 countries.

 

 

Geo reach: Bahrain, Egypt, Jordan, Kuwait, Lebanon, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Tunisia and UAE

 

More than a third of the reviewed startups is present in the UAE market (71), followed by Saudi Arabia (39), Egypt (34), Kuwait (17) and Jordan (12).

 

Markets that we see having a significant room for growth are Lebanon, Jordan, Qatar and Bahrain.

 

Though Groceries and Food & Bev fall under Retail, we decided to present each separately.

 

Fashion retail is set to grow 18% on a yearly basis. We reviewed 33 retail marketplace startups that include not only fashion (Noon, Maison du Maillot, Boutiqaat) but also baby products (Mumzworld, Baby Souk), toys (Yallatoys), pre-owned items (Cartlow, Melltoo), (Floranow, Floward), cars (CarSwitch, Seez), automotive spare parts (Odiggo, Speero), artisan produce (Sharqi Shop)…

 

Services is a broad term and, in our collection, it covers areas such as home services (Ajeer, Rizek), car services (Carcility, Srvme), parking (Yalla Parking), pet care (Vetwork), cleaning & laundry (JustClean, Justmop, Washmen), HR (Ogram, Passioneurs, Ureed), marketing (Keepface) and web design (Lvendr).

 

 

There are only 17 B2B marketplaces in our collection. We @ArzanVC see a huge potential in this segment. Hence our investment in Retailo. It’s a nascent sector

Globally, B2B e-commerce is expected to grow 70% by 2027. By 2025, majority of B2B transactions will happen online (80%).

And apart from B2B, there are other untapped areas: art, legal counseling, pet care, sports…

 

 

TL;DR (too long; didn’t read)  
Arzan VC's MENA Marketplace 2021 Collection presents 200 marketplaces in 12 countries of the Middle East. We split them into 12 categories. Groceries, food & beverages, general retail and services are the leading marketplace sectors. We see a great space for growth in B2B e-commerce, which is expected to grow 70% by 2027.

 

Family Postcard

 

What’s for dinner tonight?

iKcon was named “Cloud Kitchen Business of the Year” by Entrepreneur Middle East.

 

The rainmaker

Cartlow was recognized as one of the movers and shakers powering the growth of the UAE’s startup ecosystem by Gulf Business.

 

 

100 astronauts

POSRocket started with 5 astronauts in 2016 and now it is a family of 100!

 

 

1.4 million pieces of jewelry

Mejuri soared past 1.4 million jewelry pieces sold and it launched a higher-value, more luxurious collection.

 

About your Instagram

CrowdAnalyzer published the State of Social Media 2021 report about social media penetration, popular influencers and analytics of popular posts and behavior based on sectors across Bahrain, Egypt, KSA, Kuwait and UAE.

 

+1 marketplace

Zid launched an app marketplace that will allow merchants on Zid’s platform to access solutions and services built by third-party developers.

Latest Jobs @ArzanVC Family

 

  • Senior Software Engineer (Ruby on Rails) atQoyod (Cairo)

  • Graphic Designer at Citron (Dubai)

  • Photographer at Citron (Dubai)

  • Business Development Specialist at Armada (Saudi Arabia)

  • Product Manager atArmada ((Tunisia / Kuwait / Bahrain)

  • Senior Full Stack Developer at Armada (Tunisia)

 

So, what are your most fav marketplaces?

 

Hasan

 

Twitter     Medium     Website     LinkedIn     YouTube     Email    

Received this from a kind friend? You can subscribe to our newsletter too.


Copyright © 2020 ArzanVC, All rights reserved.

Want to change how you receive these emails?
You can update your preferences or unsubscribe from this list

We need a drone emoji for logistics

We need a drone emoji for logistics

It’s been a crazy couple of weeks. Good crazy. You probably heard the buzz around our new investments in Zid and Citron (few more to come very soon). We also finished our #AMMAN_Seed_01 last week and we’re onto… Kuwait (May 4-5) and Bahrain (May 9-10).
 
So, how many of you already forgot about the recent Suez bottleneck? This month we dived into the world of MENA’s 60 supply chain & logistics startups to see how they’re improving supply chain around the region (and helping prevent bottlenecks 🤞). Including the world’s first electric last mile delivery platform and untapped areas.
 


 

60 supply chain & logistics startups in the MENA

 

Delivery & logistics was the 4th most active sector in 2020 in terms of the number of deals (25 deals in total), generating a 67% YoY growth. The total amount of funding was less than in 2019, but 2021 seems to be already making up for it as the sector received $37.6 million in March alone.

 

We selected 60 startups operating in supply chain & logistics in 11 countries of the region (i.e. Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Morocco, Oman, Qatar, Saudi Arabia and the UAE). Next—we classified them into 6 categories based on their function:

 

  • delivery drop-off & storage – delivering to a pick-up point as an alternative to home delivery, e.g. smart lockers     
  • e-commerce fulfillment – helping e-commerce businesses with storage, processing orders, packing boxes and final delivery 
  • freight management – managing the transport of cargo of any size (we included trucking here)
  • on-demand/express delivery (last mile delivery) – picking up and delivering items to the client’s doorstep
  • on-demand storage/warehousing– storing furniture and other personal belongings

The outcome of our dive is that almost half of the reviewed startups is active in on-demand/express delivery, followed by freight management and e-commerce fulfillment. In terms of the number of active startups, the UAE, Saudi Arabia and Egypt top the chart.

 

 

Under delivery drop-off & storage we got Fodel (UAE) providing pick-up and drop-off for e-commerce parcels as an alternative to home delivery. In Egypt, Voo recently launched a pick-up point service for last-mile delivery.

 

In the delivery management category Emdad (Qatar) helps companies create and manage high-performing, resilient supply chains. Grid Supply Chain (UAE) is a SaaS platform for a better management of logistics and transportation flows by sea, air, road and rail.

 

E-commerce fulfillment is spearheaded by Salasa (KSA), R2S (Egypt), AHOY, iMile and Jeebly (all UAE).

 

We classified Shipa as a freight management startup (Shipa Freight) although Shipa has 2 more divisions: Shipa Ecommerce and Shipa Delivery. Other freight management startups include Lorryz (UAE), Trella (Egypt), Freterium (Morocco) and Homoola (Saudi Arabia). And, of course, our favorite TruKKer (UAE), a portfolio company that is operating in 5 different countries and just passed the threshold of 500,000 truck loadings.

 

 

The busiest category—on-demand/express delivery—comprises Armada (Kuwait), another portfolio company that just began operating in Bahrain, MRSOOL (Saudi Arabia), Bosta (Egypt), Hi-Express (Iraq)… and the world’s first electric last mile delivery platform: Solva (UAE).

 

On the other hand, on-demand storage/warehousing turned out to be the least busy category. Here we got Boxit (UAE), an on-demand personal storage startup originally from Kuwait.

 

Markets that we see having a significant room for growth are Lebanon, Jordan, Qatar and Bahrain.

 

Areas such as sourcing & procurement and warehouse automation remain largely untapped. Autonomous logistics, too—although Fetchr did partner with Eniverse Technologies and Skycart back in 2017 to develop the first autonomous drone delivery service in the region. Last year Dubai took the initial steps in drawing up the framework for commercial drones that would one day be used for last mile delivery and others. Perhaps a year or two from now, a drone will land by your house door to drop off your Amazon order… or drop you off.

 

 

TL;DR (too long; didn’t read)  
We reviewed 60 supply chain & logistics startups operating in the MENA (majority in the UAE, Saudi Arabia and Egypt) and learned that on-demand/express delivery, freight management and e-commerce fulfillment are the most active sectors. Untapped areas include autonomous logistics as well as warehouse automation and sourcing & procurement.

 

Family Postcard

 

Huwaei assisting startups

Both FittiCoin and MUNCH:ON are benefiting from Huawei’s startup program. Find out how.

 

10-fold increase

Michael Truschler of FlexxPay told Arab News that he expects 10-fold increase in platform transactions over the next 6 months.

 

Micro influencers & celebrities

Crowd Analyzerknows the types of influencers who have joined Clubhouse in the MENA region in March. Check the results.

 

 

New kid on Clubhouse

Zidlaunched Zid Talk on Clubhouse. Every Sunday at 9.30pm..

 

Gamification x SaaS

Gameball ‘s CEO and founder Ahmed Khairy talked on Minimally Viable about bringing gamification into SaaS.

Latest Jobs @ArzanVC Family

 

  • Operations Officer at Armada (Kuwait)

  • Product Manager at Armada (Kuwait)

  • Senior Full Stack Developer at Armada (Tunis)

  • Digital Marketing Manager at Zid (Riyadh) (Riyadh)

  • Creative Content Creator atCartlow (Cairo)

  • Vendor Manager at Cartlow (Dubai)

 

Ramadan Kareem 🌙

 

Hasan

 

Twitter     Medium     Website     LinkedIn     YouTube     Email    

Received this from a kind friend? You can subscribe to our newsletter too.


Copyright © 2020 ArzanVC, All rights reserved.

Want to change how you receive these emails?
You can update your preferences or unsubscribe from this list

61 exits

61 exits

This month we reviewed 61 MENA startup exits that happened from 01/2018 till now. The results of our analysis show that e-commerce and fintech witnessed the biggest activity and so did the UAE. Strategic acquisitions were the dominant exit type. More below.

 

VIMP:

Following its success in Saudi, we are launching #AMMAN_Seed_01!

 

If you’re a team from Jordan, we invite you to book your slot here. April 4 till 8

🤑

 


 

Analysis of 61 MENA startup exits (01/2018-03/2021)

 

A startup exit is a term referring to when the founders make a return on a startup by selling everything (or a stake) or going public (IPO).

 

We’ve closely analyzed most of the MENA startup exits* that happened in the period from 01/2018 until 03/2021.

 

The available data reveals that:

 

  • 2021: 3 exits (to date)    

  • 2020: 16 exits ($361 million+) 

  • 2019: 27 exits ($3.61 billion+) & 1 startup IPO
  • 2018: 17 exits ($104 million+)

The above numbers confirm that 2019 was a stellar year with the exits by far outnumbering any other year—also in terms of the total value. While 2018 saw exits worth “only” $104 million, the value of exits in 2019 surpassed $3.6 billion. Well, that was mainly thanks to Uber acquiring Careem for $3.1bilion—the first MENA unicorn 🦄 exit.

 

Let’s dissect now through 61 MENA startup exits that occurred during the above period. (You can check out the A-Z list at the end of the newsletter.) We present you the results in terms of sectors, countries and exit types.

 

 

The deals we analyzed spread over 20 sectors. E-commerce (e.g. Namshi and Wadi ) tops the sectorial analysis along with fintech (including the IPO of Fawry ). Adtech and real estate also witnessed a considerable number of exit deals.

 

 

Nearly half of the analyzed MENA startup exits happened in the UAE. So had the exit of unicorn Careem.

 

The deals can be further categorized as acquisitions and IPOs. The acquisitions were either full (82%) or partial (18%).

 

 

Almost 84% of the analyzed exits were strategic acquisitions (e.g. GIG acquiring a stake in Yallacompare or Emaar Malls acquiring Namshi), out of which 25% were acquisitions by a direct competitor (e.g. Ureed acquiring Nabbesh or Trella acquiring Trukto. Many of those strategic acquisitions were acquihires or struggling companies with usable products.

 

Only 14.8% of the acquisitions were by a holding group / PE—for example, B3Bar Holdings’ acquisition of NAR.AI or Helios Investment Partners’ acquisition of TPAY Mobile.

 

There has been just 1 startup IPO over the past 3 years. So, to finish off on a very good note, we’re excited about Anghami soon becoming the first MENA startup to be listed on the Nasdaq stock exchange. Back in January, we pretty much whined about not having any MENA startup IPOs… it seems like 2021 is catching up quite well.

 

* Note: In our analysis, the label “MENA startup exits” covers data on 17 MENA countries: Algeria, Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Syria, Tunisia, United Arab Emirates and Yemen.

TL;DR (too long; didn’t read)  
Our analysis of 61 MENA startup exits (01/2018-03/2021) revealed that most of the exits happened within the realms of e-commerce and fintech, followed by adtech and real estate. Not surprisingly, the UAE was the hotspot with 30+ exits. Only 1 startup IPO took place during the analyzed period and the majority of the remaining deals were strategic acquisitions (83.6%).

 


 

Family Postcard

 

Flexxing $3M

FlexxPay raised $3M in a Pre-Series A funding round, led by JIMCO and Target Global. 

 


 

On TV

Tamatem’s CEO Hussam Hammo was interviewed on Asharq News الشرق.

 

5G in Bahrain

Dalooni partnered up with STC Bahrain to facilitate the access to 5G technology in the kingdom.

 

 

For marketers

Breakdown of Mejuri’s marketing strategy. A very insightful read .

 

Breaking the glass ceiling

Shopify featured Gameball among the “Global Staff Picks”.

 


 

Latest Jobs @ArzanVC Family

 

  • Group Finance Manager at TruKKer (Dubai)

  • Corporate Sales Manager at Swvl (Jordan, KSA, UAE)

  • Category Buyer at Cartlow (Dubai)

  • Telesales Executive at Cartlow (Cairo)

  • Junior HR Generalist at iKcon (Dubai)

 

 

Jordan, get ready for #AMMAN_Seed_01!

 

Hasan

 


 

 


 

Twitter     Medium     Website     LinkedIn     YouTube     Email    

Received this from a kind friend? You can subscribe to our newsletter too.


Copyright © 2020 ArzanVC, All rights reserved.

Want to change how you receive these emails?
You can update your preferences or unsubscribe from this list

One bounced cheque, one big crash. 39 years ago and now?

One bounced cheque, one big crash. 39 years ago and now?

The Magnificent Nine,The Cavaliers… ever heard of them? Well, they didn’t star in a Western film. Rather a Gulf reality show of early 1980s.

 

I’ll give you a hint: one bounced cheque would lead to a collapse of the third largest capital market in the world at that time.

 

The Souk Al-Manakh crash. Nearly 4 decades ago, but its notorious story continues to provide very important lessons. Especially when it comes to today’s overvaluations.

 

P.S.

📣 📣 📣

 

We got a super exciting announcement: we are launching Seed_2021 with $2.5 million up for grabs in 2021! 🤑

 

If you’re from Saudi, register your team and book your slot. We begin on March 7 🔥

 

 

 


 

 

The fate of the most popular casino in the Arabian Gulf

 

Hollywood or not, the Magnificent Nine of Kuwait were big stars. They allegedly accounted for $55 billion (some say 60) in cheques that proved worthless.

 

Let’s rewind back to the beginning.

 

In the late 1970s, Kuwait was the Switzerland of the Arabian Gulf. The new-found wealth of that era (due to oil crises and rising oil prices—and incomes) led to a new-found appetite for investment.

 

Boursa, the official stock exchange of Kuwait, was founded in 1977 and it laid down strict listing rules for companies. A year later, as a result of the existing stocks scarcity, an air-conditioned parking garage was turned into an informal market for new, innovative stocks. It became known as Souk Al-Manakh. Or the place of unparalleled stock speculation.

 

Souk Al-Manakh (source: MIT Library)

 

Unlike at Boursa, the participants at Souk Al-Manakh could trade in shares of unregulated foreign companies. At least 46 local and 38 foreign companies traded their shares there. The government permitted it as long as it ensured that this informal exchange was isolated from the formal financial system. Yet, a perfect isolation was impossible: many individuals took up loans from banks to finance their trades at Souk Al-Manakh. More so, rising oil prices subsequently increased the prices of Souk stocks, and the money from the region rushed into Kuwait.

 

 

The financing needs of the Souk were met by spot purchases of stocks by forward postdated cheques. The premiums were reaching up to 400% of the initial stock value. Moreover, these cheques would often mature in a year time. So, in the meantime, they’d be used to buy more stock and thus acted as money. The collateral was the future delivery of a stock (whose price was continuously on the rise). No bank balance was required; the whole transaction was based on mutual trust between the traders as well as their firm belief that the stock prices wouldn’t stop climbing. In fact, shares were doubling by hour. No wonder that one of the Magnificent Nine allegedly bought $14 billion in stock.

 

The traders simply assumed these cheques could never be defaulted. And if anything bad really happened, everyone counted on the Kuwaiti government to save them like they did in 1977.

 

By 1982, Souk Al Manakh became the third largest stock market in the world, topped only by the US and Japan.

 

Yet the price of oil was on a sharp decline in early 1982, which negatively impacted the value of the Souk. People were expecting a market correction…

 

… until one bounced cheque triggered its unavoidable crash in August 1982. People hurried to cash out their cheques – in vain. The created wealth was fictional. 29,000 worthless outstanding cheques with a total value of $93 billion.

 

 

There were over 350 bankruptcies (in the region’s perspective, this was a large number). All Kuwaiti banks except for one became insolvent and the government stepped in and bailed them out (amongst other rescue measures). The financial disruption that followed lasted more than a decade (then it was superseded by another disruption—the Iraqi invasion).

 

Souk Al-Manakh serves as an excellent example of a speculative craze. It was a place of too much money chasing too few actual investment opportunities.

 

The Souk was an unprecedently overvalued market with barely any tangible value. Billions of Kuwaiti Dinars were invested into companies with little assets and profits—so-called paper companies. Only about half of the listed companies produced annual reports. Some firms were purely fictional.

 

Souk Al-Manakh was innovative and it incited a rapid change, but the massive injection of liquidity only skyrocketed the value of many small, unpromising companies as if they were healthy, profiting business giants.

 

Overvaluations are dangerous and the resulting fall can be instantaneous, sharp and painful. Let’s watch out. (Though, it seems, the mankind can never completely learn from the past lessons of market collapses.)

 

TL;DR (too long; didn’t read)  
Souk Al-Manakh was short-lived informal stock market in Kuwait (1978-1982), which grew as sharply as it collapsed. Its story reminds of the dangers of unregulated stock playgrounds, lack of data, stock speculations and, of course, greed. Massive injections of liquidity and resulting overvaluations can have shattering consequences.

 


 

Family Postcard  

 

New App on the block

 

What started as PointCheckout’s Covid relief product for SMEs is now ThePayLink App, a way for small and micro businesses to accept online payments.

 

Say bye to e-waste

 

Cartlow is helping
reduce the e-wastein alignment with UAE Vision 2021, which set a target of diverting 75% of municipal solid waste away from landfill.

 


 

Flying to the moon

 

POSRocket’s Chief Executive Astronaut Zeid Husban was questioned about his entrepreneurial endeavors. Read the interview here.

 

Trend takeaways

 

CrowdAnalyzer released a report on 2021 social media trends. Download it here.

 


 

Innovating management consultancy

 

SubsBase appeared on The Startup Pill’s list of 101 Best Management Consultancy Startups.

 

 


 

Latest Jobs @ArzanVC Family

 

  • Product Manager a MUNCH:ON (Dubai)

  • Product Manager at POSRocket (Amman)

  • eCommerce (Digital) Performance Marketing Manager at Cartlow (Cairo)

  • SRE Senior Software Engineer II at Swvl (Cairo)

  • Front-end Developer at Zid (Riyadh)

  • Multimedia Designer at Tamatem (Amman)

 


 

 

Ready for Seed_2021?

Hasan

 
 

Twitter     Medium     Website     LinkedIn     YouTube     Email    

Received this from a kind friend? You can subscribe to our newsletter too.


Copyright © 2020 ArzanVC, All rights reserved.

Want to change how you receive these emails?
You can update your preferences or unsubscribe from this list

WANTED: startup IPOs in the Middle East

WANTED: startup IPOs in the Middle East

Hope you stepped into 2021 with the right foot.
 
January is nearly over, so we will go directly to the heart of the matter: why are there no IPOs in our region? And what should be done so we have more of them?
 
We got a lot of startups with a small market cap and consolidation of the market through acquisitions is nowadays trendier than IPOs. Creating one unified startup market across the region could be a solution.

 


 

Middle East vs. startup IPOs

 

Globally speaking, startup IPOs definitely didn’t take any sick leave last year. On the contrary—it was a wild ride: Airbnb, Snowflake, DoorDash… Well, the 3 biggest tech IPOs ever happened in 2020. Compared to 2019, last year brought a strong IPO flurry. To be followed by more flurry in 2021. Why?

 

There are countless tech companies spread across many sectors and industries, each offering a solution to a problem. Globalization and digitization are their driving forces. As a result, their growth can’t go unnoticed by investors.

 

What’s happening on the international scene is that many tech startups are receiving higher valuations than they would have in the past and if they remained private. Investor confidence is there and the perceived risk is small. For now.

 

When it comes to the regional IPOs, Saudi food delivery startup Jahez is planning to go public this year. Still, I think it’s fair to say that our region is rather failing at incubating and nurturing business giants. So, here’s the puzzle to kick off this year: how come we don’t have (startup) IPOs in the Middle East?

 

Let’s look at the puzzle piece by piece:

 

  • Age matters. Most of our regional tech startups are simply too young to go public.

  • Type of ownership.Family-owned businesses constitute a big part of the private sector in the region… and they prefer to remain private.

 

 

    • Internal governance. Startups must be well-structured and provide immaculate and transparent reporting. They must be able to handle the demands of going public.

    • Adequate management. International investors have a certain standard for who should be in the company management and what kind of education/experience these individuals should possess.

    • Market outreach. If we consider our region as one whole market, it is still very fragmented which negatively impacts the startups’ abilities to scale up. Including regional stock markets in international indices will help provide the required exposure.

    • Regional politics & economy. Political instability and unclear economic planning push international investors away.

    • Profitability. Though IPOs by unprofitable companies (such as Uber or Airbnb) are nowadays very common, many regional markets around the Middle East doesn’t allow listing unless the business achieved profitability.

    • It’s expensive. Right now, there is so much capital available at cheaper rates that opting for an IPO may simply not be worth it for the business.

    • Illiquidity in secondary markets. The very low liquidity in existing secondary markets in the MENA may deter investors to invest in companies that plan to list in those markets.

    • Regulators & responsibilities. There is a lack of benefits when listing companies due to the ongoing and growing burdens/responsibilities that listed companies have to go through. Plus, headache from regulators. Panadol won’t fix that. (P.S. That’s not to say that our local regulators are stricter than their international counterparts.)

 

 

    • Protecting secrets. When listing and going through the required reporting process, startups’ details such as their “secret sauce” are exposed and competitors can take advantage of this…

 

Healthy IPOs will start happening in the Middle East more often if we (and our governments) allow ourselves to nurture and support companies that address local/regional problems and needs. And we got plenty of such companies.

 

A possible solution are small cap IPOs—IPOs of companies with a relatively small market cap ($50m – $1bn). The profitability requirement should not be adhered to, since many of the tech startups are focused on growth until scale is achieved (only then profitability arrives). Many investors want to invest when those startups are at the hyper growth. More risk, more return. For all that, we need to educate investors and show the opportunities in the listed companies.

 

A MENA small cap market would bring startups from around the region in one place, thus creating one unified startup market for all MENA countries where it would be easy for investors to invest. There would be a good volume of startups (options to invest in) and investors would be not only local but regional. What do you say?

 

TL;DR (too long; didn’t read)  
We see a lot of startup IPOs internationally but barely any in the Middle East. How come? This is an emerging market with startups of a small market cap. Also, there is so much available capital that going public is a very expensive option compared to other sources of liquidity. However,promoting small cap IPOs as well as creating one unified startup market across the region could finally bring some IPO flurry into the Middle East.

 


 

Family Postcard  

 

👏 for Qoyod

 

Qoyod closed $2.1M Series A investment by Merak Capital and other investors.

 

Largest-ever venture-debt deal

 

TruKKer secured $10M venture debt from Silicon Valley’s Partners for Growth (PFG). This is described as the largest-ever venture-debt in the Middle Eastern tech history.

 


 

Hello from Lebanon

 

To meet a 10-fold increase in demand for its services, FlexxPay launched itsTelesales Center in Lebanon.

 


 

Toronto’s top fashion

 

Mejuri appeared on the listof top fashion companies in Toronto.

 

Loyalty is priceless

 

Gameball discussed how loyalty & rewards apps help create customer retention.

 

 


 

 

Latest Jobs @ArzanVC Family

 

  • Group Finance Manager at TruKKer (Dubai)

  • Product Manager at Crowd Analyzer (Cairo)

  • HR Recruiter at iKcon (Dubai)

  • Senior iOS Developer at POSRocket (Amman)

  • Technical Support Engineer at Swvl (Cairo)

  • QA Specialist at Tamatem (Amman)

 

 


 

 

 

Happy and healthy from ours to yours!

 

Hasan

 
 

Twitter     Medium     Website     LinkedIn     YouTube     Email    

Received this from a kind friend? You can subscribe to our newsletter too.


Copyright © 2020 ArzanVC, All rights reserved.

Want to change how you receive these emails?
You can update your preferences or unsubscribe from this list

Popping bubbles in 2021

Popping bubbles in 2021

At last, 2020 is at its close (sigh). There are many ways to describe the last 12 months but let’s stay diplomatic—they were very eventful.
 
On the bright side, all that happens to us—good or bad—is an opportunity to learn and grow. We just have to grasp it. And that’s no cliché.
 
We @ArzanVC got together to detect the weak points of the startup & VC ecosystem in the Middle East. We present them to you as bubbles

 


 

Bubbles of overvalued rounds and entrepreneurial hearts can be dangerous

 

2020 served us many startup surprises with new winners as well as losers. Some companies found out they had been operating in a bubble that was meant to burst either way—be it for a failing product-market-fit or bad unit economics.

 

Well, it’s no secret that the startup ecosystem in the Middle East faces its own bubbles. And these bubbles are very much related to the local economic (and so political as well as social) realities of the region. So this is no critique—our bubbles have been created causally; by the law of cause and effect.

 

First: easy funding money. There is too much of the cake available for startups to grab. While those of you who just said “Hold on, that’s a good thing, isn’t it!” – no, it’s not. There are way too many funding options in the Middle East and sourcing money is the least problem for the local startups. National funds, business funding, family funding… —you name it. However, the kind of funding from developmental investors often comes with restrictions (i.e. invest in a specific country), which may inevitably damage the startups as well as investors. There is also an imbalance between the amounts of funding and the (limited) availability of startups. And this is where our major bubbles mark the beginning of their life.

 

 

…. bubbles of unrealistically large valuations.

The region’s startup pool is still not that big so there’s high competition among the startups and hence the valuations they seek are higher. Yet the traction doesn’t always meet the next round valuations as promised. And that’s a problem. Overvalued rounds are becoming a forte of many startups in the Gulf area.

Our principal Eyad believes that the region’s structural changes are long overdue. For example, while KSA has been steadily focused on enabling private enterprise (and startups) over the past 3 years, Kuwait lags behind and this is a structural disadvantage that Kuwait needs to better address at the policy level. The overvalued rounds don’t necessarily mirror some of these structural challenges.

Meanwhile, our analyst Mohanad says that investors are to be blamed for this situation and they should start caring more about the numbers.

It is our job as investors to do our proper and reasonable due diligence, right?

 

 

Well, take an example of Kuwait, where the investors’ actions turn troublesome sometimes. The common investors here are family offices who see and value startups as a private equity opportunity rather than venture capital. And that’s not doing any good to the ecosystem. But beware, there are also other kinds of bubbles around us.

 

…. bubbles of giving all your heart into your startup.

 

In theory, the order of things is: idea, …….. funding. In our region, it’s sometimes the other way around. Our analyst Asia reminds that certain business ideas get defended no matter if they’re worth it or not (note: being stubborn is not always a bad trait.) That’s when a proper personal market research is preferred over outsourcing feasibility studies to third parties (which is usually very pricey, too). Also, some founders have great networks (while some still don’t network at all), but we shouldn’t forget that our networks not necessarily translate to actual users. Friends and family are not the only users you’d like to have on board in the long-run.

 

There are also those among us that prefer to remain part-time entrepreneurs with another full-time job. Perhaps they are not incentivized to shift to full-time jobs in their own startups because they think it’s simply not worth it for them. Perhaps they don’t want to lose the high package they’re receiving in the full-time job. However, this prevents them from fully dedicating to their own business, which could suggest they’re not willing to take much risk… Well, if you want to be an entrepreneur, you must give your heart in. All of it. And take good care of your numbers before they turn into bubbles.

TL;DR (too long; didn’t read)  
Bubbles of overvalued rounds are increasingly more common around the Middle East, and especially the Gulf area. Their origins lay in too many available funding options and a still-quite-limited startup pool. Structural policy changes as well as reasonable due diligence on behalf of investors are some of the ways forward. The region also faces bubbles arising from the lack of knowledge and/or will in ensuring that startups are run and grown to their maximum potential.

 


 

Family Postcard  

 

$120,000 for scholarships

 

In 2020, Mejuripledged $120,000 to scholarships for black women and black non-binary people though the Mejuri Empowerment Fund.

 

FlexxPay in Bahrain

FlexxPay signed a cooperation agreement with Bahrain’s Al Salam Bank. This first-of-its-kind agreement will give employees and pensioners access to a portion of their earned income whenever they want.

 

50% off

 

Corporate clients of Riyad Bank can now receive 50% off on their subscription with Qoyod.

 

Where did you shop on Black Friday?

Crowd Analyzer

prepared a list of the most popular brands this season and the traction around them on social media in the Middle East.

 


and

🎙️  

MUNCH:ON’s Dana Baki was interviewed by Entrepreneur Middle East.


 


 

Latest Jobs @ArzanVC Family

 

  • VIP Business Development Executive at The Luxury Closet (Abu Dhabi / Kuwait / Riyadh)

  • Head of Operations at TruKKer (Cairo)

  • Product Manager KSA at MUNCH:ON (Saudi Arabia)

  • Android Developer at POSRocket (Amman)

  • Multimedia Designer at Tamatem(Amman)

 


 

 

See you next year!

Hasan

 


 

Twitter     Medium     Website     LinkedIn     YouTube     Email    

Received this from a kind friend? You can subscribe to our newsletter too.


Copyright © 2020 ArzanVC, All rights reserved.

Want to change how you receive these emails?
You can update your preferences or unsubscribe from this list