Technology: While the region has difficulties, the fact that it remains relatively underserved presents enormous opportunities for online businesses
Arabian Business: How do you view the challenges in the Internet market in the region, and what differentiates your approach from other operators and investors?
Khaldoon Tabaza: When Adey and I started iMENA in 2013, our region was probably the only global market where one could capture key business models that possess large existing markets. At the time – and today to a large extent – our ecosystem lacked many of the components of mature markets. This was evident in the lack of experienced specialised senior talent, long fundraising cycles, high costs of expansion, and a lack of large businesses to act as acquirers of smaller ones from within the region.
We viewed this as an opportunity, and adopted a platform approach that compensated for many of the missing elements through our own internal resources, allowing us to have more control, reduce risks, and maximise returns. Our platform approach allowed our businesses to scale fast without compromise on technical or marketing quality, considering the limited resources and funding that was available in the market.
As we enter 2018, most of our businesses have become dominant players in their sectors and matured to win their markets, and our size positions us well for the next phase of growth in the region’s online market.
Arabian Business: In terms of opportunities for growth, how does the GCC and the rest of MENA stack up against other international markets? Is this a function of a youthful demographic and high internet penetration?
Khaldoon Tabaza: The MENA market is a long-tail market that is driven by consumer consumption, small and medium sized enterprises, young populations, and high smartphone penetration. This is why we opted to target businesses that address large regional industries such as automotive, real estate, consumer services, recruitment, and hospitality and hence our focus on classifieds businesses such as OpenSooq and JustProperty and marketplace businesses such as SellAnyCar and ReserveOut.
All of our companies possess network driven business models that build a strong barrier to entry, and protects them against well-funded global players. Many of them are dual-sided marketplaces that have consumer and enterprise offerings such as PropSpace real estate systems for brokers, property managers, and developers, all of which compliment their JustProperty portal.
Arabian Business: Of the business models that iMena operates in – classifieds, marketplaces, and enablement – in which do you see the most potential for further growth?
Adey Salamin: Classifieds business models such as OpenSooq capture the largest addressable markets driven by growth of population and GDP. While vertical classifieds such as JustProperty and marketplaces such as SellAnyCar and ReserveOut have the same advantage and are also at the heart of the transaction allowing us to capture more margins. Enablement models such as Telr in payments are the fuel that drives all online businesses. Overall, our businesses are well positioned to capture value at every stage.
Arabian Business: What made you chose the UAE, KSA, and Jordan, as your main markets? Are there any other markets that you find particularly underserved as far as online businesses go?
Adey Salamin: The UAE is an early adopter market that has the most concentrated clusters in our industries of focus, and is a great place from where to do business in the GCC while attracting senior international talent. KSA, for its part, holds the largest potential for growth in terms of market size, and Jordan offers us a great supply for back office talent. Some of our business, such as OpenSooq, have already expanded and dominated some of the largest underserved markets in the region such as Iraq and Libya where we expect to see significant growth in the next years.
Arabian Business: What advice would you give a budding entrepreneur looking to set up an internet business in the region?
Khaldoon Tabaza: The region is a great place for online businesses that can overcome local barriers to entry and that target existing large markets. While the region has its difficulties, it also offers opportunities given that there is less competition compared to other markets, and given that the majority of the market is still underserved.
If you are building a global business model that requires being in the proximity of advanced academia, technology partners and specialized talent – and that requires accelerated and higher risk funding – then you need to either build a simultaneous base or relocate to a more advanced ecosystem such as that of the Bay Area, the Nordic countries or China, as the region is still not ready for those types of businesses.