According to a report by the Khaleej Times, dynamics are starting to unearth fascinating trends in terms of UAE ranking on top for MENA deal-making and other business opportunities in UAE 2020 along with ecommerce which has now gained pole position. Experts feel that each stakeholder in the flourishing startup economy should feel proud for overcoming challenges over the last 9 months amidst the pandemic. The proof is in the pudding, i.e. capital that has been invested till date in MENA startups has touched its peak at $803 million as compared to $802 million previously in 2019.
The summer months in quarter three are usually more tranquil in terms of overall transactions and this duration has witnessed the lowest investment volumes since Q1 2018, highlighting the impact of the coronavirus crisis. However, the UAE still came first in terms of number of deals (26%) and also in the capital invested. The e-commerce market regained the top position with 21% of deal share for 2020, surpassing the Fintech space. Together, both sectors comprise 40% of all deals in MENA for the third quarter. This period also witnessed 50% reduction in the startup investment numbers as compared to Q2. H1 2020 witnessed a capital deployment record, owing to the increase in average deal sizes at Series A and B levels from last year, with increases of 34% and 91% respectively.
Best investment in UAE 2020- What the experts feel
The ease of doing business in Dubai and other parts of the UAE is a major game-changer for startups here as per experts. Tanuj Shori, Founder and CEO at Square Yards, has also opined that the startup sector has not been impacted greatly by the pandemic in the UAE and has recovered with a vengeance, almost like a coiled spring that has huge energy potential. Shori added that major crashes always create opportunities for sizable rebounds and while tech companies were the biggest winners in the year 2008, this time around, the Middle East, driven by the UAE, is suitably positioned for surpassing other big startup economies with fast recovery.
Shori also feels that global business leaders are realizing that they should shift more towards innovative approaches for tapping target audiences better. Most industries including real estate, agriculture, sustainable energy and automobiles require considerable technical skills and knowledge covering aspects like automation and smart robotics among other innovations, creating a need for sharing time and knowledge along with technology investments. The UAE enables this environment, bringing technology entrepreneurs together from throughout the world, enabling them to mix with innovators, industry conglomerates and investors. The UAE offers the very best business opportunities in the whole region owing to its friendly environment, skilled manpower, top-notch infrastructure and the diversified nature of the economy.
Shori has also added that the startup environment in UAE is driven hugely by the internal benefits of the region as a major startup hub, enabling homegrown entities to cater to growing markets outside while offering access to global networks of funding. Also, there are several global companies who are presently expanding into newer locations with MENA coming on top of the list of markets with the highest opportunities. For global startups looking to foray into newer markets, Shori feels that the UAE offers a highly strategic location for future growth.
E-commerce in the UAE should also grow to approximately $27.08 billion by the year 2022 as per Statista research reports. Ernst & Young has already reported that a whopping 92% of buyers in the UAE and also Saudi Arabia, changed overall buying habits, preferring online purchases while most retailers have switched to digital blueprints for staying in business as well. Kearney Middle East has reported that up to 40% of people are shopping online more in these regions prior to the COVID-19 pandemic. Almost every consumer has internet access in the UAE, making it a huge market for the ecommerce sector.
For a detailed report on this read the articles we were featured in:
Khaleej Times – https://bit.ly/2G2n5kN
Published Date: 20 October 2020
