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Tue 12 Jan 2016 10:51 AM

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2016 Investor predictions: Heather Henyon, WAIN

With the region’s start-up scene going from strength to strength, investors have never been more prominent nor more vital. With more and more new businesses looking for funding, and investors looking to put more money into the GCC.

2016 Investor predictions: Heather Henyon, WAIN

Leading one of the first angel investor networks for women in the MENA region – The Women’s Angel Investor Network (WAIN) – Henyon says its goal is to build an informed ecosystem of female investors who support women entrepreneurs in the Arab world.

“Our model is the group model – we make investment decisions as a group and invest as a group – so that we learn and strengthen our skills and deepen our experience as investors,” she explains.

“We made our first investment in 2015 in Little Thinking Minds, an online Arabic education platform for primary year children.”

The region’s start-up investment landscape, Henyon says, witnessed both positive and negative developments in 2015.

She says: “There were some positive developments, especially in Egypt with the funding raised by Yaoota [$2.7 million from Abu Dhabi-based KBBO Group] and Wuzzuf [Series A of $1.7 million from Sweden’s Vostok New Ventures and UK’s Piton Capital], where both companies raised larger rounds, helping to validate the growth of the ecosystem beyond seed stage funding.

“Flat6Labs expanded to the UAE and successfully launched their first cycle of companies. The Rocket acquisition of Talabat at such a high price tag [$170 million] took many of us by surprise.

“On the less encouraging side, we haven’t seen the emergence of new VC capital in the region, even though some very talented and qualified fund managers have been fundraising this year. Some of the region’s darlings have hit the valley of death and likely won’t be around by 2017 – all bound to happen in any start-up ecosystem.

“Crowdfunding platforms have become a viable fundraising mechanism for SMEs. Beehive and Eureeca have become market leaders in the region and both have expanded globally.”

On the development of the region’s start-up investment landscape, Henyon says: “I don’t see many new investors coming to the region, but I do see the growth and maturity of regional VCs and angel investors.

“They’ve now got a track record and experience, which is a tremendous asset in backing the right companies.”

But funding will remain a hurdle for regional entrepreneurs, she adds: “Seed and follow-on capital sources remain limited in the region. Unless some of the more experienced fund managers raise additional capital, which will be challenging in this economic climate, the start-ups that have raised a seed round will have a difficult time fundraising.”

Women-led start-ups will remain the focus of WAIN in 2016. “We choose women-led companies where a woman is a member of the C-suite and owns a decent equity stake. We don’t have a sectoral focus but invest in companies that are high-growth and can justify early stage venture risk by targeting 10x-plus returns.”

“Be patient,” is Henyon’s main advice for 2016.

“Start early and realise that fundraising is a six to 12-month journey depending on what stage of capital you are raising. Engage mentors and advisors and deliver value to your enterprise. Plan, plan, plan!”