MENA area poised for $50bn market growth regardless of US recession fears, market volatility 

Over 60 Rhinos within the area, together with fintech ventures comparable to Tabby and Tamara, foodtech ventures Kitopi and ToYou, categorised ventures comparable to Bayt and Property Finder and the B2B/SaaS ventures comparable to FOODICS and UNIFONICs, are those anticipated to hit the market over the following 5 years, new market analysis by world consultancy RedSeer mentioned.

“MENA’s Rhinos have been the spine of the area’s digital financial system, and they’re anticipated to account for 30 p.c of the IPOs over the following 5 years,” the examine mentioned.

The RedSeer examine additionally predicted MENA to see over 200 IPOs from now until 2029 as in opposition to about 182 preliminary presents throughout 2018-2023.

Rhinos thrive in MENA

The examine mentioned whereas the world is chasing elusive unicorns, the area is quietly nurturing Rhinos, with as many as 100 ventures already reaching superior phases of progress, and lots of extra anticipated to mature over the approaching years.

MENA accounted for simply 6 unicorns in 2023, as in opposition to 1,357 globally.

“Whereas 30 Rhinos are IPOs-ready, about 70 are anticipated to take the merger and acquisition (M&A) route to assist fill gaps and drive synergies,” RedSeer mentioned.

Ventures within the retail, logistics and foodtech sectors are ripe for consolidation and anticipated to steer this M&A exercise, it mentioned.

“Rhinos within the retail [sector] will see market-entry acquisitions so as to add scale, whereas these in logistics are to consolidate for sustainability and those in foodtech will enhance stability by means of vertical integration,” RedSeer mentioned.

The examine mentioned due to the area’s progress capital share being about 40 p.c decrease than the worldwide common, there’s a perception that there’s restricted entry to progress capital.

“The prevailing narrative that the MENA area has fewer unicorns and lacks growth-stage funding is misplaced,” Akshay Jayaprakasan, Dubai-based Affiliate Associate at RedSeer Technique Consultants,” instructed Arabian Enterprise.

“Within the present macroeconomic context, Rhinos are extra related and deserve reward for constructing companies with sturdy fundamentals, attaining profitability quicker, and driving sustained 15 p.c progress through the years.

“Many of those Rhinos are prepared for IPO and are eyeing their public market debut over the following 3-5 years,” he mentioned.

MENA’s Rhinos are itemizing quicker

The examine confirmed that MENA’s Rhinos are itemizing quicker and assembly funding gaps by means of public markets.

“With a median of 8 years to IPO, in comparison with 11 years in the remainder of the world, the MENA area scores globally for startup ventures to go public quicker,” it mentioned.

These ventures exist throughout sectors, with most of them being within the retail, enabler, tech, classifieds and digital companies, and energy about 70 p.c of MENA’s digital financial system, the examine mentioned.

“Our thesis is that digitalisation has enabled vital worth creation in addition to worth switch between conventional and digital gamers throughout all sectors within the financial system, and as thus, it’s inevitable that web enterprise will contribute an increasing number of to the market cap of inventory markets within the area,” Khaldoon Tabaza, Managing Director of iMENA, instructed Arabian Enterprise.

“As such, we do consider that IPOs have lastly turn out to be a viable exit situation for on-line companies in our area usually, and in Saudi in particular,” mentioned Tabaza, who can also be an funding committee member on the OBIC-iMENA Rua Development Fund.

The RedSeer analysis projected digital Rhinos to account for 30 p.c of the IPOs over the following 5 years.

The MENA area noticed a surge in IPOs during the last 5 years, with 2022 being a breakout 12 months, with 51 points, although by way of IPO proceeds 2019 was the very best 12 months for the area.

Throughout 2018-2023, the area witnessed over 170 IPOs, raking in over $80 billion.

Authorities-owned corporations dominated the IPO market, with Saudi Aramco, ADNOC, Saudi Tadawul Group, Salik, Dubai Electrical energy and Water Authority, Borouge and Luberef raking in over $1 billion every.

“We anticipate the momentum to proceed and anticipate to see about 60 IPOs of digital-first corporations over the following 4 years,” RedSeer mentioned.

The examine additionally mentioned MENA is projected to see over 200 IPOs from now until 2029, as in opposition to about 182 IPOs throughout 2018-2023.

Jayaprakasan, nevertheless, mentioned scale is vital for the IPO readiness of Rhinos, and consolidation is imminent in lots of sectors within the brief time period, which can function a catalyst for IPO readiness within the medium time period.

“Foodtech, on-line retail, logistics, and tech/SaaS are sectors to look at for consolidation,” he mentioned.