The Middle East and North Africa (MENA) region has the potential to create 45 tech start-ups worth close to $100 billion (unicorn status) by 2030, according to a new report released by Saudi Technology Ventures (STV).
The prediction by STV is based on technology, consumer adoption, broad macroeconomic and regulatory reforms, and a growing talent pool – all of which cater to the MENA’s technology-driven population.
“We believe the region can output 45 unicorns by 2030 and can create digital giants that can list on public markets, remain independent, and keep their focus on delivering innovative solutions tailored to local needs,” STV said.
Almost 70 percent of MENA venture capital investments were deployed in the UAE over the study period, STV said, adding that it is because of the country’s continued efforts to consistently facilitate access to talent.
“It has also fostered an active ecosystem through favorable regulations and a startup-friendly environment that incentivizes entrepreneurs to choose the country as their launchpad,” the report said.
The study produced by the venture capital fund cited the region’s youthful population, 55 percent under 30, growing at 1.6 percent per year, as well as its high average daily social media consumption of 3.5 hours.
The region also has the highest percentage of “unbanked” consumers, or those without bank accounts, at 45 percent, leading to large potential for fintech businesses, the report said.
Similarly, Saudi was titled the “gravitational center” of the region, in terms of scaling technology companies.
The two main drivers of Saudi’s status as a hub for tech start-ups are its GDP, which accounts for one-third of the region’s GDP, and the size and depth of its stock exchange, STV said. New development programs and company laws designed to encourage innovation and remove barriers also play a part.
Moreover, Magnitt’s latest report showed that the venture capital funding in Saudi surged more than threefold to $584 million in the first half of 2022, surpassing the total for the whole of 2021.