2019 will be 'year of exits' by Middle East start-ups, says Fadi Ghandour

Western funds will only invest in size and scale, according to the executive chairman of Wamda Capital
2019 will be 'year of exits' by Middle East start-ups, says Fadi Ghandour
“It has companies that will scale, and global funds or strategic investors will not shy away from investing regardless of the political climate,” Fadi Ghandour said.
By Lubna Hamdan
Thu 03 Jan 2019 09:56 AM

The next 12 months will see a number of exits by Middle East start-ups and SMEs, according to Fadi Ghandour, executive chairman at Wamda Capital.

In an opinion piece looking ahead to 2019, submitted to Arabian Business, he said investors will begin receiving returns, encouraging more people to invest in the region.

“2019-2020 will be the year of exits. Some of them will be very big, and lots of them will be small, but exits will happen and funds will finally start returning money to investors, encouraging new ones to believe and invest more,” he said.

Ghandour said global funds will only look to invest and acquire mature regional companies which have scaled in large geographies such as Saudi Arabia.

“The $120 million investment by [New York-based] General Atlantic in Property Finder and Amazon’s acquisition of Souq is a validation that Western funds will only invest in size and scale,” he said, adding that the investments are a validation that in tech, “this region is investable”.

“It has companies that will scale, and global funds or strategic investors will not shy away from investing regardless of the political climate,” he said.

Ghandour also predicted the Careem-Uber merger to remain a possibility in 2019, while e-commerce rivals Noon and Souq will continue to compete aggressively, resulting in improved customer service.

“The Careem-Uber story will continue to make headlines, while the battle for e-commerce and the Noon, Souq/Amazon war will continue with a vengeance. We will see new products, improved services, lower prices with the consumer being the biggest beneficiary,” Ghandour said.

He added that competition in the e-commerce space will result in the acquisitions of smaller companies by traditional retailers including Majid Al Futtaim.

“This battle for e-commerce will also lead to some consolidation of smaller vertical players, where traditional retail regional groups acquiring smaller e-commerce players or continuing to invest aggressively. Majid Al Futtaim, Al Tayer, among others are likely to lead the way,” he said.

He also said companies to watch in 2019 will come in the form of smaller, specialised companies such as mother and child e-commerce website Mumzworld, online book retailer Jamalon and insurance comparison platform Yallacompare.

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