The MENA entrepreneurial ecosystem has been attracting global and regional attention, with an increased investor appetite and interest in the region’s startups. In terms of investment, $674 million was invested in 255 deals in 2018 with the UAE dominating the entrepreneurial activity with the highest share of investors, number of deals, and value of deals, according to Arabnet’s 4th edition of “State of Digital Investments in MENA 2013-2018” report. 

Recently, corporate investment has been steadily gaining traction in the MENA region, with more than a dozen companies investing strategically in new ventures in the past few years. The new investment space is still warming up and is expected to undergo significant increase in activity in the next few years.

Corporate investment initiatives (standalone funds or opportunistic investments) contribute to 17% of all investors in the MENA region. The ratio of corporate investors does not differ much from 2017 figures; it represents 17% of the MENA investment community in 2018, compared to 18% in 2017. 

Almost two-thirds (70%) of the region’s corporate investors are GCC-based companies. The UAE continues to top the list, with 36% of corporate investors, followed by Saudi Arabia with 19% and Lebanon with 12%.   

The MENA entrepreneurial ecosystem has been attracting global and regional attention, with an increased investor appetite and interest in the region’s startups. In terms of investment, $674 million was invested in 255 deals in 2018 with the UAE dominating the entrepreneurial activity with the highest share of investors, number of deals, and value of deals, according to Arabnet’s 4th edition of “State of Digital Investments in MENA 2013-2018” report. 

Historically, Saudi-based corporate investors overshadowed the rest of the MENA region; however, in recent years, other markets have quickly stepped up the pace while Saudi Arabia witnesses a decrease in its share of corporate investors from 33% in 2013 to 19% in 2018. 

The UAE has quickly caught up and even superseded Saudi Arabia with respect to corporate investors. Second to the UAE’s corporate growth, both Lebanon and Egypt have witnessed a big spurt throughout the years.  

While corporate investors are the latest to enter the MENA investment scene, their number has grown steadily since 2012, and today companies across sectors – from telecom to retail to pharmaceuticals – are launching investment initiatives and activities.

Increased corporate appetite and interest are also evident with the rise of corporate investors that are working on advancing their digitization process by supporting tech-focused solutions. 

One example of the above is Chalhoub Group, a partner for luxury brands, who has recently invested in a UAE-based startup named Zbooni, alongside B&Y Venture Partners, as the corporate’s first investment. 

Another UAE-based corporate investor is Ginco Venture Capital by Ginco Group. The corporate invests in Series B companies to support founder development with an investment portfolio of over 25 companies to date. 

In Egypt, Glint Consulting, a consulting firm, has also invested in 5 companies to provide them with consultation, business support, and capital investments. Another Egyptian company, namely Nahdet Misr Publishing Group, has established a corporate venture capital, EdVentures, that incubates, accelerates and invests in educational and cultural startups at different stages.

Moving into the Levant region, Lebanon’s telecommunications company, touch, launched the Touch Innovation Program (TIP) where it fosters startups through providing mentoring, training, working space, and much more. 

The corporate investor trend will continue to grow as many companies are displaying heightened interest and vying for a share of the investment scene. As the MENA ecosystem continues to grow and mature, the corporate investment community is also expected to realize a further upsurge in the coming years.