(العربية)

A recently published report from MAGNIT and Startups 500 provides an overview of the business environment for startups in the Middle East and North Africa (MENA) across a range of themes, including statistical studies aimed at identifying challenges and opportunities for entrepreneurs in the region.

The data were collected through a survey of more than 100 founders of companies based in the Middle East and North Africa, funded by the Startups 500 regional fund.

First: Demographic data

Most of the founders are in their early 30s

Demographic data show that 54% of startups surveyed were established over the past three years and only 9% were established before 2014, showing the growing growth of startups in the MENA region over the past few years. The report also showed that the percentage of companies established by two persons reached 51% compared to 20% for companies established by one person.

On the other hand, the majority of startups employ between 1-10 permanent employees, while the percentage of companies employing 50 employees and more was only 7%. The reason for the relative small number of employees is that most startups are based on service activities and use high technical tools, consequently they do not need a large number of employees.

Second: Fundraising

An investor’s network is the #1 priority for fundraising startups

This topic presents a series of questions that the founders were asked about their recent financing rounds, in terms of how long it took and the number of companies that have offered them financing in their recent rounds. The survey results indicate that more than 60% of startups did not continue their rounds for more than 6 Months during which 29% of companies received between 6 to 10 financing offers.

The authors of this report also raise important questions about the criteria associated with the search for the right investor and the difficulties they face in searching for funds, for example, the owners of the start-ups answered a question concerning the most important criteria to be taken into account when searching for the main investor for their startups, an important question to all financing seekers. The responders sorted the most important criteria in the following order: 1. Network Relations 2- Deal Conditions 3- Long Term Financing.

Third: Investment dynamics

Most startups will look for regional & intl. investors for future rounds

The report provides ample answers to start-up entrepreneurs' vision of their business prospects and their expectations for future gains, with 59% saying they are confident that their companies will be worth $ 100 million in the future, and 46% expect that they will be able to get out of their company within 3 to 5 years. This is a positive outlook, which gives an indication of the value of the estimated profits that people, who are going to start their own companies and investors in the startups sector, can get.

Fourth: recruiting talents

Hiring good people is among the top concerns of MENA founders

This report responds to questions about the difficulties experienced by entrepreneurs in the process of seeking the necessary competencies to employ in their startups. While financial and language barriers have not been a major obstacle for entrepreneurs, despite the difficulties facing entrepreneurs in finding the required talents, they are looking to recruit, on average, about 16 new employees next year.

Fifth: Operations

Large majority of startups focus on growth over profitability

In this regard, the report discusses the operational plans that the founders intend to implement in the future. In this regard, 81% of respondents said they are more interested in growth than making profits. 13% of them indicated that they had started to make profits.

Sixth: 500 Startups, Who are their portfolio startups?

Most startups are based in Dubai, followed by Cairo and Riyadh

The report presents a series of information related to the nature of the sectors in which the startups are working and the amount of funds raised and other important information. As for the question about the headquarters, Dubai and Cairo ranked first and second with 27% and 23% respectively. Riyadh came in third place with 11%. The most important sectors that the startup companies focus on are all belonging to the services sector led by electronic commerce, consumer services and financial technological solutions.