June 14th, 2010 YallaStartup Habib

(This is cross posted from Habib Haddad’s blog)

The Middle East and North Africa region is home to 350 Million Arabic native speakers, 65% of which are under the age of 30. While internet penetration is still low at 20% it’s growing at the fastest rate in the world, mobile penetration however is at 80% with about 220M users. The education and health are booming due to the fast population growth. This growth coupled with the wealth of some countries especially in the Gulf is creating significant opportunities that are yet to be explored.

However a large portion of the massive GCC sovereign wealth funds was historically invested in markets like USA, Europe and Asia, but the recent downturn has put pressure to finally look and foster opportunities in the MENA region itself. Governments all over the Arab world are also keen on accelerating entrepreneurship and have been shifting the mindset of their funds towards more early stage deals, hoping to create that ecosystem. The challenge here is that it’s not just a shift of mindset but also a shift in required skills; Investing in startups and SMEs in the MENA emerging market is far from similar to investing in a developed ecosystem where the returns and exits are more or less established.

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