This article has been reposted from Knowledge@Wharton.
When Yahoo! acquired Arabic internet portal Maktoob.com in 2009 for $165 million USD, expectations ran high among the Arab world’s tech entrepreneurs that the regional startup scene would be inundated with cash-rich suitors. Instead, the exit market seemed to dry up in the midst of the Arab uprisings.
But this past March, Souq.com, promoted as the Arab world’s Amazon.com, received $75 million USD in funding from South African media firm Naspers, putting the Middle Eastern online retailer’s valuation at half-a-billion dollars. The investment is the latest in a string of venture capital (VC) deals finding their way to support the developing e-commerce market in the Arab world. Other online Arab retailers that have won funding include fashion retailer Namshi.com, discount retailer MarkaVIP.com, travel site Triperna.com, and coupon retailer Cobone.com. In 2013, MIH, a subsidiary of Naspers, acquired a majority stake in Dubizzle.com, considered the biggest classified advertising site in the UAE.
American entrepreneur and venture investor Christopher Schroeder describes the activity as inevitable, because investors are finally beginning to see the value — and returns — in the Middle East technology market. He is the author of Startup Rising: The Entrepreneurial Revolution Remaking the Middle East, a book on the region’s entrepreneurship movement that was published last year.
Schroeder, who has recently returned from a trip to Iran where he “saw an intriguing and nascent startup community,” says he has been exploring the strengths and limitations of the rising entrepreneurial ecosystems of the region. He has looked closely at some of the thousands of young entrepreneurs. “They are all not only innovating, but also [trying] to solve some of their long-ignored social and infrastructural challenges,” he notes.
Link to article:
Chris Schroeder: Witnessing the Middle East’s Entrepreneurial Revolution
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