CAIRO: The Middle East and North Africa region is on its way to becoming the next Silicon Valley, with venture capital and startup activity rising annually.
Last year, the funding ecosystem saw massive growth compared to previous years, thanks to the region’s inspiring entrepreneurial talent.
It witnessed Saudi Arabia, the UAE and Egypt emerging as the top-performing countries in the venture capital space, amounting to 35 deals.
The MENA region raised $247 million across 46 deals in January last year, marking an epic 474 percent increase compared to the same period last year, according to venture research firm Wamda.
January 2022 also chanced upon Bahrain’s crypto fintech startup Rain raising $110 million in a series B funding round, totaling a record-breaking $15 million.
On the acquisition front, Saudi fintech Foodics bought foodtech startup POSRocket in January, 2022. Other notable deals included UAE’s property tech startup Huspy buying mortgage consultancy Home Matters and Kuwait’s online coffee marketplace COFE App purchasing e-commerce Sippy Beans.
In February 2022, Saudi startups amounted to 58 percent of the overall funding value, raising $219 million in 23 deals mainly thanks to trucking provider TruKKer’s $96 million series B and online grocery store Nana’s $50 million growth round.
The UAE amassed a total of $77.6 million through 20 deals, followed by Egypt, raising $70 million in 18 deals.
TechStars Riyadh was the most active accelerator, investing in over 12 startups across the region, followed by Abu Dhabi-based Flat6Labs, which saw eight of its Tunisia cohort graduate. 
In March 2022, however, the region took a 22 percent dip compared to the earlier month, garnering $229 million.
However, it clocked a 71 percent increase over the same month in 2021.
Saudi investors were the most active during the month, clinching 31 out of 79 deals in the region, followed by Egypt’s 20.
The age of fintech
Fintech companies were the most funded entities in the first quarter of 2022, raising $368.8 million across 43 deals, with Bahrain’s Rain, UAE’s Tabby, and Egypt’s Khazna and Lucky leading the charts.
MENA startups aggregated $297 million in April 2022, $2 million lesser than a month ago. Saudi startups dominated the funding space during the month, raising $195 million thanks to Foodics’s $170 million series C round. The UAE came in second with $61.5 million.
The region experienced a downfall in May, witnessing one of the lowest amounts raised in 2022, with $176 million across 42 deals.
The decline represents a 40 percent decrease compared to April 2022, but yearly growth increased by 62.7 percent.
Although investment value decreased, international investors such as US-based PayPal Ventures and global digital payment company Mastercard ventured into the scene in May 2022, raising the deal count to 21 deals.
The MENA region raised $247 million across 46 deals in January last year, marking an epic 474 percent increase compared to the same period last year.
The MENA region raised $247 million across 46 deals in January last year, marking an epic 474 percent increase compared to the same period last year.
In February 2022, Saudi startups amounted to 58 percent of the overall funding value, raising $219 million in 23 deals mainly thanks to trucking provider TruKKer’s $96 million series B and online grocery store Nana’s $50 million growth round.
Egypt had the most funded startups raising $80 million across 11 deals, with fintech Paymob’s $50 million series B accruing a substantial portion of the monthly value.
While the Kingdom amassed $46 million through nine deals in May 2022, fueled by fintech Hyperpay’s $36.7 million round, the UAE came in third with $45 million via eight deals.
In June 2022, MENA startups raised $323.7 million in 66 deals, an 84 percent increase in value compared to the month before. The UAE was the top performer in June 2022, accumulating $278.8 million through 16 deals.
The first half of 2022 also saw the fintech sector as the leading industry in terms of investment, and a large number of foreign venture capital firms also entered the region, according to regional research firm MAGNiTT.
Regional venture capitalists Flat6Labs and Shorooq Partners were the most active during the first half, participating in 19 and 15 deals, respectively. On the other hand, US-based Y Combinator was the most active international investor, bagging eight deals.
Commenting on the region’s venture capital market, Mohammad Al-Zubi, founder of venture capital firm Nama Ventures, told Arab News that the market is still warming up and will witness even more growth.
“The growth rate in the venture capital asset class on all metrics — the number of deals, the amount invested, the number of funds, incubators, and accelerators — has shown tremendous growth. At Nama, we say the region still has not started; it’s only going to get bigger and better with time,” Al-Zubi told Arab News exclusively.
Realization of venture capital returns in the first half of the year was also at an all-time high, earning almost 75 percent of the total number of exits in the whole year before.
The world’s a stage
The Middle East alone observed the most international and cross-market merger and acquisition activity, with 21 exits announced between January and June 2022.
Notable among them were Pakistan’s marketing platform Walee Technologies acquiring UAE’s artificial intelligence-driven branding solutions company for an estimated value of $50 million and Saudi-based Retail Technologies buying UAE’s online marketplace DXBUY.
Al-Zubi also stated that mergers and acquisitions are key factors that indicate a growing ecosystem. He added that “Silicon Valley has figured out the fastest and cheapest path to report return on investment is via M&A. Large conglomerates in MENA need to start viewing M&A as one their key pillars to stay competitive.”
Moreover, food and beverage was the sector of choice during this period for the Saudi ecosystem raising $187 million, followed by fintech with $95 million.
The UAE experienced a 2 percent decline in funding in the first half of 2022 compared to 2021, at $699 million.
The MENA region’s funding fell dramatically in July 2022, raising $105 million across 44 deals, an annual decrease of 84 percent and 68 percent compared to the previous month.
In August 2022, the funding ecosystem rose, with MENA startups raising $378 million across 33 deals.
The UAE and Saudi Arabia raised $232.8 million and $102.8 million across 12 and six deals, respectively.
August 2022 also witnessed Huspy acquire two UAE-based mortgage brokers, Just Mortgages and Finance Labs. In addition, Emirati logistics platform Cartlow purchased the UAE-based trusted classified platform for secondhand items, Melltoo.
Other deals included UAE’s technology and investment group Astratech acquiring Emirati fintech PayBy and Saudi Arabia-based human resources consultancy firm KABI’s acquisition of the UAE’s HR tech startup BLOOVO.
September 2022 funding lessened by 54 percent compared to August as MENA startups raised $173 million across 51 deals. Saudi Arabia’s TruKKer secured one of the biggest rounds this year, raising $100 million in a pre-initial public offering led by Bahrain’s Investcorp.
Coming to the end of 2022, October witnessed the most significant amount this year, with $646 million across 69 deals. Total funding of 2022 till October hit $3 billion across 551 deals. The month saw a 331 percent year-on-year growth.
Emirati startups secured $460 million during the month, with Egypt coming in second with $113 million, followed by Saudi Arabia with $70 million.
In November, the total funding value hit $439 million, up 55 percent compared to the same month last year, with 39 deals. The UAE secured its top position in terms of deal count and value as Emirati startups raised $237 million across 13 deals followed by Algeria thanks to its super app Yassir raising $150 million in a series B funding round.
Regionally, Saudi Arabia-based investors were the most active, investing in 10 deals followed by their counterparts from the UAE with eight deals.
November also witnessed a couple of acquisitions, with Kuwait’s Floward acquiring perfumery brand Mubkhar, also a Kuwait-based company, and Saudi Arabia-based foodtech company Jahez acquiring The Chefz, a Saudi Arabian dessert delivery startup, for $173 million.
RIYADH: New mining contracts could be snapped up by international firms attending a key industry conference in Riyadh next week, according to Saudi Arabia’s Deputy Industry and Mineral Resources Minister.
Khalid Al-Mudaifer has talked up the possibility of even more global companies seeking to operate in the Kingdom, with the Future Minerals Forum acting as a shop window for Saudi Arabia’s mining sector
Speaking to Saudi Almadina daily, the deputy minister revealed that between 20 to 30 percent of the mining permits granted in 2022 were handed out to firms that attended last year’s FMF event.
This year’s gathering is set to have an even wider global reach, with delegates attending from more than 60 countries, compared to the 38 represented in 2022.
“The Kingdom is planning to intensify a drive to attract more investment in the mining sector to boost its contribution to GDP to over $64 billion in 2030,” Al-Mudaifer said.
A roundtable of ministers is set to kick off the forum, which has been described as the “largest-ever gathering of its kind” by event organizers.
The Ministerial Roundtable will analyze the ways in which global collaboration can be enhanced to unleash the mining potential of the region, and also focus on measures that can be taken to turn the Middle East and North Africa region into a future hub of “green metals”.
The summit is set to tackle several topics, including sustainability, the future of mining, energy transition, the contribution of minerals to the development of societies, digital transformation, and integrated value chains.
The second edition of the FMF comes as Saudi Arabia’s mining sector is witnessing a rapid transformation and is attracting investors from around the globe.
According to geological surveys dating back 80 years, the Kingdom is thought to have an estimated reserve of untapped mining potential valued at $1.3 trillion.
However, with the prices of valuable minerals, especially gold, copper and zinc rising, the true value of the Kingdom’s current mineral wealth could be double that figure, CEO of the Saudi Geological Survey Abdullah Al-Shamrani said in September 2022.
LONDON: Hedge fund fees have dropped to their lowest level since the global financial crisis in 2008, research firm Hedge Fund Research said on Friday, as high inflation and recession fears hit investors, according to Reuters.
HFR said hedge fund base fees fell from the second to the third quarter of 2022 by one basis point to an estimated 1.35 percent and that average incentive fees tumbled 4 bps to 16.01 percent.
Both estimated fees represent their lowest levels since HFR began publishing the estimates in 2008, a note from the firm added.
It was a challenging year for some classes of hedge funds, particularly long-only stock investing firms broadsided by declines across all of Wall Street’s three main indexes, which booked their first yearly drop since 2018 as surging inflation and the risk of recession dented investment in equities.
The HFRI 500 Fund Weighted Composite Index, which tracks many of the biggest global hedge fund performances, posted a year to date decline of 2.78 percent through November 2022, whereas a larger index tracking the total industry fell by 3.87 percent to the end of November 2022.
Hedge fund managers are traditionally known for their two-and-20 fees, which means a lower constant percentage is applied to the amount of assets managed in the hedge fund and then a higher incentive fee applied as a part of profit sharing when performance numbers rise.
“Fees are still too high, especially in relation to the meagre result, which unfortunately has been going on for too long,” said Bruno Schneller, a managing director at INVICO Asset Management.
Fee structures can vary significantly depending on the fund, he said.
HFR said that larger hedge funds did better in the third quarter of 2022. The top hedge funds in their weighted composite index had a positive 10.9 percent return while the bottom decile averaged a negative 14.3 percent.
“The hedge funds that attract the most capital and charge the highest fees are usually the managers with a long, successful track record,” said David Bizer, managing director of investment firm Global Customised Wealth, adding: “Many of the best funds are closed to new capital in order preserve their ability to generate attractive returns.”
The hedge funds that are easy to get into might not be the best ones to invest in, he added.
According to HFR, the number of new hedge funds launched fell to 71 in the third quarter of last year, nine fewer than in the previous quarter and the lowest since the fourth quarter of 2008. 
RIYADH: Saudi firms are set to receive a boost in sustainable business practices thanks to an agreement between the Kingdom’s Ministry of Economy and Planning and technology platform Clarity AI.
A Memorandum of Understanding was signed between the two entities to help push ahead with the Ministry’s objective, under the National Transformation Program, to encourage data companies to operate in a sustainable manner.
According to a statement announcing the MoU, Clarity AI is a sustainability technology platform that uses machine learning and big data to deliver environmental and social insights to investors, organizations, and consumers.
Rebeca Minguela, founder and CEO of Clarity AI, said: “Making strides forward in ESG (environmental, social, and governance) and sustainability is an important part of Saudi Arabia’s National Transformation Program, and there is a clear commitment to building a business ecosystem which rewards companies and investors with the aim to create value beyond just financial returns. 
“Bolstering transparency, accountability and reporting rigor is critical to the Kingdom achieving its sustainability goals.”
The MoU will see the Saudi government and Clarity AI cooperate in providing environmental and social visions for companies and institutions.
The two will also exchange experiences in the use of big data techniques and in activities related to Clarity AI’s competence, tools, and customization capabilities.
They will examine ways of cooperation in the field of training Saudi personnel to understand and analyze sustainability data, and participate in events and activities of common interest.
The two will also facilitate discussions between companies and government agencies related to sustainability issues.
The statement added that as of January 2023, Clarity AI’s platform analyzes more than 50,000 companies, 320,000 funds, 198 countries and 188 local governments, and delivers data and analytics for investing, corporate research, benchmarking, consumer ecommerce and reporting.
The focus on data business comes in the wake of the Global AI Summit held in Riyadh in October.
The conference, organized by the Saudi Data and Artificial Intelligence Authority, hosted up to 30,000 hybrids and in-person attendees and had representatives from more than 90 countries.
Speaking to Arab News at the event, Mishari Al-Mishari, the deputy director of SDAIA, said the data industry and AI will contribute billions to the national gross domestic product. 
“Data is the new oil, and that’s our perception and belief of how much we could make out of data,” Al-Mishari said.
CAIRO: The Egyptian pound tumbled this week in its largest single-day slide since the cash-strapped government agreed to a $3 billion International Monetary Fund deal in mid-December, authorities said.
The pound fell from around 24.7 for $1 to just over 26.3 against the dollar, some three weeks after Egypt and the IMF formally ratified the support package, approved in exchange for a number of economic reforms implemented by the country’s Central Bank, including a shift to a flexible exchange rate.
The package allows for a further $14 billion in possible financing for Egypt.
The Egyptian economy has been hit hard by years of government austerity, the coronavirus pandemic, and the fallout from the war in Ukraine. Egypt is the world’s largest wheat importer, with most of its imports having traditionally come from eastern Europe.
Since the start of 2022, the Egyptian pound has lost more than 40 percent of its value against the dollar, with the country currently facing a foreign currency shortage.
In recent months, Egypt has also been beset by rising inflation, with the annual rate reaching above 18 percent in November. The Central Bank has sought to curb the rise by raising interest rates.
The National Bank of Egypt and Banque Misr — two of Egypt’s state-run banks — announced they were offering yield saving certificates with 25 percent interest rates, a move experts believe is another attempt to rein in inflation.
Most Egyptians rely on the government subsidies to afford basic goods such as bread, policies that have been in place for decades. Almost a third of Egypt’s 104 million people live in poverty, according to government figures
LONDON, TOKYO: Global equities were set to end the first week of 2023 on a tepid note and the dollar stood tall as fears of higher US interest rates hit market sentiment, according to Reuters.
The MSCI World equity index traded steadily on Friday, on course for its fifth consecutive weekly drop despite a brief rally earlier in the week.
The dollar also touched a one-month high against major currencies on Friday as investors braced for the crucial US non-farm payrolls report later in the day.
The official jobs report comes after private payrolls data on Thursday showed a bigger than expected rise in employment and a drop in jobless claims, underscoring the Fed’s determination to prevent a doom loop of rising wages and prices that would embed high inflation in the world’s dominant economy for longer.
Investors have started “to price in a more aggressive path of rate hikes from the Fed,” Deutsche Bank strategist Jim Reid said.
According to a Reuters survey of economists, the non-farm payrolls report is expected to show on Friday that 200,000 jobs were created in December, easing from November’s 263,000 pace but still about double the level the Fed considers sustainable.
Traders will also zero in on any gains in hourly wages, Reid cautioned, “given the Fed’s focus on wage inflation” while there was “little doubting the still strong labor market.”
US two-year Treasury yields, which track interest rate expectations, spiked to a more than two-month high of 4.497 percent overnight before easing to 4.4561 percent in early European trading. The 10-year yield, which rose as high as 3.784 percent in New York overnight, dropped to 3.7088 percent.
“There is concern that the labor market isn’t showing any signs of cooling,” putting financial markets “very much on edge,” said Tony Sycamore, a market analyst at IG.
The dollar index, which measures the greenback against six counterparts including the yen and euro, stood at 105.24, having earlier touched 105.31 for the first time in a month.
The dollar index is up about 1.7 percent this week, putting it on course to snap a streak of three losing weeks. It is shaping up for the best performance since late September.
In Europe, the broad Stoxx 600 equity index opened 0.4 percent higher on Friday as falling gas prices combined with mild winter weather boosted hopes for that the region may overcome the worst of its inflation crisis. Germany’s Xetra Dax traded flat.
US E-mini stock futures were steady, after a 1.16 percent overnight slide for the S&P 500.
The euro was little changed at $1.05255, after earlier easing to $1.0511, a level last seen on Dec. 12.