Saudi Arabia is a market that startups ‘really want to focus on:’ Jack Selby
Saudi Arabia “is clearly a market that you really want to focus on,” said Jack Selby, managing director of investment firm Thiel Capital and founding member of PayPal, in an interview with Al Arabiya English on Thursday.
Selby’s comments came after the Middle East’s startup ecosystem saw a blockbuster year in 2019, with total deals equaling $3.8 billion for the industry throughout the year. Careem’s sale to Uber for $3.1 billion in the first quarter of 2019 has brought experts to note that the region’s startup ecosystem is coming of age.
“The clear advantage that Saudi has, with respect to the rest of the region, is the size of their market,” Selby said. “It's a massive market relatively here in the MENA region.”
However, the size comes with some caveats as a large portion of the startup and venture capital industry is focused in the UAE, where Saudi Arabia is the fastest growing ecosystem in the region.
“I think the folks in Saudi made a lot of progress,” Selby explained. “But I think the folks here in the UAE have been at it for longer, and so therefore, they just have an advantage in that respect … between the two, because there's obviously a lot of synergies between the two countries, I'd be very bullish.”
The rise of startups and venture capital across the region has been significant, with Selby noting in particular that the growth in the UAE over the last five to 10 years has been “second to none on a global scale.”
A significant reason beyond this growth has been the role that authorities have played in fostering the startup ecosystem.
“You can make progress in fintech [financial technology] or some of these other areas that in other places of the world are heavily regulated, but here [in the UAE] you can engage with the government so readily, and they want to foster entrepreneurship,” Selby explained. “That’s a really unique opportunity.”
Careem’s sale, along with other important deals such as the sale of Souq.com to global e-commerce platform Amazon in 2017, has left the region with many entrepreneurs that have been successful and are looking for their next project.
This is a dynamic that Selby is familiar with as a founding member of an early success story in Silicon Valley – PayPal. As successful entrepreneurs move on and start their next enterprise, they will “spawn and give birth to the next wave of entrepreneurs” supporting the region’s startup ecosystem in the long term.