ECONOMY

Fragmented markets are the ‘biggest challenge’ for MENA startups: Wamda Chairman

Fadi Ghandour, Executive Chairman, Wamda Group, at the 2020 World Economic Forum in Davos, Switzerland. (Screegrab)

MENA startups “biggest challenge is how do you scale these businesses while markets are very fragmented,” said Fadi Ghandour, Executive Chairman of Wamda Group, a company that looks to support Middle East and North African (MENA) entrepreneurship through ecosystem development and venture capital funding.

“There is a huge friction to move from one country to another with different regulatory environments, with different requirements for how you set up a business there,” he said.

Ghandour was speaking on the sidelines of the 2020 World Economic Forum in Davos, Switzerland.

The region as a whole though “is experiencing a fantastic growth in the startup world, specifically in the Gulf, also Jordan, and Egypt,” he added.

The sale of Careem, the region’s first “unicorn,” to Uber for $3.1 billion last year has had many investors and commentators asking where the next billion dollar business is. Unicorns are startups that have a valuation of more than $1 billion.

Ghandour disagrees with this line of thinking, however. “Life doesn’t revolve around billion dollars businesses,” he said.

“It revolves around businesses that have scaled to a certain size, that are doing well, that are sustainable, and that can find investors … the world doesn’t end with unicorns.”

Accessing finance has been a long term problem of startup development in the Middle East, but this is a situation that is changing. 2019 was a blockbuster year for startup funding, with $3.8 billion in capital deployed, headlined by the Careem deal.

“We are seeing some really serious companies … in the region,” Ghandour said, in relation to funding challenges.

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Last Update: Thursday, 23 January 2020 KSA 18:24 - GMT 15:24
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