GCC Startup Ecosystem News | May 2020

This report is also available in a downloadable PDF version via this link: GCC Startup Ecosystem News Roundup – May 2020

HEADLINES

• Covid 19’s impact felt by region’s startups – Startups have either pivoted or scaled back their operations. Vulnerable sectors such as travel & mobility haven seen suspension or shut down of operations. E grocery, edtech and fintech saw increase in demand. More from the Wamda Arabnet Report
• A new MENA unicorn born amidst the pandemic – Following Emerging Markets Property Group (EMPG), latest funding round led global classifieds business OLX Group of $150 million, EMPG is now reportedly valued at $1 billion, becoming the latest MENA Unicorn.

INVESTMENTS

INVESTMENT HIGHLIGHTS

Report: The impact of the COVID-19 outbreak on the entrepreneurship ecosystem in Mena

• Data collected from 247 startup founders and includes research supplemented by Arabnet and Wamda.
• Close to 50% of startups that responded to the survey reported that they have a cash runway of less than 6 months
• Out of the e-commerce startups, 54.2% have a runway of less than 6 months, a third of logistics startups have between 1 and 2 months of runway left
• Half of the region’s startups have also witnessed an impact to their latest funding round
• Only 12% of startups have a runway of more than 12 months

COWORKING

• DIFC launches Innovation License. Whereas, they previously focused on Fintech companies, the new license is available for all startups from any sector
• Hub71 to cover all employees’ housing and office space rent for two months for its 50+ startups housed in the hub as support during Covid-19 pandemic
• Hub71 partners with Mastecard to open market access for Hub71 startups in Mastercard’s Start Path startup engagement program

VC NEWS

• BECO Capital launches “Launch with BECO”, a pre-seed initiative to fund 10 exceptional founders or founding teams with $150K in exchange for 10% equity
• BeyondCapital announces its USD 500K Rapid Response Capital Program for selected 11 portfolio companies
• The Mohammed Bin Rashid Fund and Beehive expand SME eligibility for their loan guarantee scheme, which has an allocation of AED20M

STARTUPS

• Emerging Markets Property Group (EMPG), acquires Lamudi Global as it expands to the Philippines, Indonesia and Mexico.
• PointCheckout wins EUvsVirus Hackathon as most innovative solution for speeding distribution of financial support in the Digital Finance
• 360Vuz selected as a Broadcast Partner to stream “The Call to Unite”, a US-based community event to raise funds for the Covid-19 relief effort.
• Doctor-booking appointment platform Okadoc launches telemedicine solution in UAE with 38 healthcare providers signed up
• Fetchr appoints former UPS Managing Director (Middle East) Hussein Wehbe, as new CEO
• Dubai-based cloud kitchen platform Kitopi lays of 124 jobs (10% of its workforce) in its New York office
• Abu Dhabi holding company ADQ launches Alpha Wave Incubation (AWI) Fund of AED1.1B targeting early-stage India & Southeast Asia companies to setup HQ in  Masdar City
• Careem discontinues its mass transporation business, Careem Bus. The service was first launched less than 18 months ago in Egypt, and later on in KSA, Pakistan and Jordan
• Careem lays off 536 employees (31% of its workforce). This brings the total count in the last six months to 700 employees, following their workforce reduction of 150 staff early in 2020
• Uber Q1 2020 financial results show a loss of $2.94 billion including $277 million in stock-based compensation expense and pre-tax impairment write-downs of $2.1 billion
• Uber to lay off 3,700 full-time employees (14%) from their customer support and recruitment teams in a bid to reduce operating expenses as the business is down by over 80%
• Uber Eats (Uber’s food delivery arm) to exit KSA, Egypt in MENA + 5 other markets effective 4th June 2020. For their UAE market, they will transfer their operations to Careem NOW

ACCELERATORS / INCUBATORS

• Dubia Smart City Accelerator wraps ups its 4th cohort with a virtual demo day featuring 10 startups in  SaaS, Foodtech, E-commerce, Gig Economy, Legal tech, Fintech, Edtech, Proptech, and Mobility & Logistics sectors

ARTICLES WORTH READING

Magnitt

• The curse of VC money and unsustainable growth in consumer startups
• Venture Debt amidst COVID-19: Majority of GCC startups willing to take on short-term debt to combat crisis effects

Matt Mullenweg (WordPress) – Gradually, Then Suddenly

Morgan Housel – The Three Sides of Risk

COVID-19 | STARTUP RESOURCES

A curated list of essential articles and updates on the Corona pandemic, its impact on the regional ecosystem and approaches on how founders and startups can navigate the current landscape

Magnitt: 

• Dry Powder Deployment: A guide to MENA’s active startup investors
• UAE food tech entrepreneurs band together to support local FnB industry with BuyNowDineLater.com initiative
• Venture Debt amidst COVID-19: Majority of GCC startups willing to take on short-term debt to combat crisis effects

EntrpereneurME:

• Survival Of The Fittest: A Game Plan For MENA Businesses To Get Through The COVID-19 Pandemic
• How Dubai’s Lockdown Affected User And Search Behavior On The Internet

Zawya:

• Investors in Saudi Arabia list top business challenges during COVID-19

MENAbytes:

• Ecommerce post-Covid-19: Few winners and many losers

On support initiatives or stimulus packages:

• Dubai Silicon Oasis Authority offers rent waivers and other incentives to businesses, residents
• A Guide To The Relief And Stimulus Measures Offered For Businesses In Dubai Amid The COVID-19 Crisis
• Sharjah Entrepreneurship Center (Sheraa) sets up $1M equity-free grant pool to support startups during covid-19 crisis
• Sharjah Entrepreneurship Center and Crescent Enterprises Join Hands To Support Startups Amid COVID-19

Published reports:

• Endeavor Jordan: Entrepreneurs Response to Managing Crisis
• Magnitt: Wamda Arabnet: Impact of Covid-19 on the Entrepreneurship Ecosystem
• Intel: Reimagining Life in a Post Pandemic World