iMENA Group expects to see online companies with $1 billion valuations to emerge in the Middle East & North Africa region within 3-5 years
Dubai, UAE – March 30th, 2015. iMENA Group, represented by its Founder & Managing Director Khaldoon Tabaza, produced a report that was published by Kauffman Fellows outlining why $1 billion valuations will soon surface in MENA’s online industry. The report, titled “MENA’s Internet Industry: The Opportunity, Challenges and Success Stories”, frames the current situation in MENA according to a three-stage model of Internet business growth in emerging markets, and gives specific advice for successful investment, as well as assesses the top three business models that are poised for dramatic growth.
The report details how the online economy in MENA has surpassed an inflection point and entered the hyper-growth era, where the number of Internet users and Internet penetration rate reached a critical threshold, given more than 140 million Internet users, an Internet penetration rate fast approaching 50 percent, and smartphone penetration reaching 74 and 73 percent in KSA and UAE respectively.
According to proprietary research by iMENA Group, the MENA region is expected to produce at least $10 billion in publically listed Internet companies over the next ten years. Following the example of Russia, India and Brazil, the report states that within 3 to 5 years one or more $1+ billion companies will be created, and in many cases listed on an international stock exchange, to act as a proxy for international investors to participate in the growth of the consumer online business industry in the market.
The report also argues that the Internet group model is more effective than the Venture Capital model in nurturing the ongoing growth of digital businesses in the region. This is due to the fact that group operators can support companies until much later stages of maturity, hence addressing the fragmented MENA ecosystem and entrepreneur’s difficulties with fundraising, market expansion, the recruitment of high-end talent and exits.
According to the report, the three business models are the most ripe for investment at this time in MENA are online marketplaces, online classifieds and online payments.
“This is the right time for foreign capital to enter the market. In the next ten years, we expect the region to experience enormous value creation. Prudent investing and the right approach to this hyper-growth period present an historic time-sensitive opportunity for investors who act quickly,” Founder and Managing Director of iMENA Group, Khaldoon Tabaza said.