MENA technology ecosystem expands by 32% in 2017

Beco Capital calculates numbers of start-ups, funders and acquirers in the region

Dany Farha, chief executive and managing partner at Beco Capital. Pawan Singh / The National

The number of start-ups, angel investors, venture capital (VC) firms and other relevant institutions supporting technology-related entrepreneurship across the Mena region rose by 32 per cent in 2017 compared with last year, suggesting the sector is maturing, analysis from Beco Capital shows.

The Dubai-based VC firm identified a total of 150 market players, compared with 114 in 2016, in its third annual report to assess the size and scope of the Mena technology entrepreneurship ecosystem.

“This reflects what we know and have felt over the last 12-18 months in Mena: that the appetite for investing in the tech sector in our region is growing – and fast,” said Dany Farha, chief executive of Beco Capital.

Beco’s ‘Periodic Table of Technology Entrepreneurship Investment in Mena’ includes a range of different companies and institutions, from regional and international VC firms, family offices, angel investors, tech acquirers and developmental finance institutions on the funding and acquisitions side; to incubators, accelerators and growth/late-stage start-ups on the entrepreneurial side.

The rate of growth of the size of the ecosystem between 2016 and 2017 surpassed the growth rate for the previous year, which stood at 24 per cent, Beco said.

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The classifications with the highest growth rate this year were growth/late stage, which was up 140 per cent on 2016; family offices, which was up 66.6 per cent, Mena VCs (up 62.5 per cent) and incubators/accelerators (up 61.9 per cent).

“These entities represent the key milestones in a technology company’s life cycle, and it’s encouraging to see high rates of participation and investment across various maturity levels.

“Building a pipeline for investment and growth opportunities is essential for a sustainable and healthy ecosystem,” said Amir Farha, chief investment officer at Beco.

This year’s report included a developmental financial institution – the International Finance Cooperation, the private sector lending arm of the World Bank – for the first time.

“We believe that 2018 will bring even more DFIs to the mix, and inject the kind of investment that will kick-start a new wave of growth,” said Mr Farha.