Are you planning to set up your own company away from a boring job or an imposing boss, but you are not yet sure what sector to launch in?
New sectors have recently emerged that are still in their infancy, and not as developed as others, allowing you to potentially establish your own company and attract investments.
Below, we offer some details about the sectors that are today one of the most successful, developing and attractive for investments, but before, let’s take a look at the number of startups in the region.
Finance and investments
MENA startups generated $297 million in investments in 29 deals in April 2022.
The total amount of funding between January and April of 2022 amounted to more than $1 billion, according to a report issued by Wamda.
This coincides with Saudi startups garnering the largest share of funding last month, after raising $195 million, while the UAE ranked second with $61.5 million.
Investors in Saudi Arabia proved the most active in the region after participating in 13 deals, followed by investors in the UAE with 10.
Dubai is a global capital
Dubai has strengthened its position as a global technology capital for startups by attracting, until December 2021, 39% of startup companies, or 229 companies.
It garnered about 57 percent of the total financing raised by these companies, or $5.2 billion.
The most suitable sectors
Now we come to the 5 most preferred sectors for startups to participate in:
1- Fintech
Fintech is facilitating most financial services and in certain areas replaced the role of traditional banks, and as such, this sector drew the highest number of deals and investments.
According to the Chairman of the Board of Directors of the Arab Monetary Fund, the volume of digital services worldwide exceeded $8 trillion in 2021 and estimated it will exceed $10 trillion by 2027.
The regional sector is also expected to reach a record $3.45 billion in 2026.
Startups operating in this sector in the region were able to secure $9.8 million in funding in April 2022.
2- E-commerce
COVID has increased the dependence of people, especially in the Middle East and Africa, on e-commerce sites, which led to these sites’ growth and the development of the services they offer.
In this context, the e-commerce sector ranked second with 11 companies on Forbes’ list of “The 50 Most Funded Startups in the Middle East and North Africa for 2021.”
IN April 2022, startups operating in this sector contributed 85 percent of the total funding value.
Therefore, the option to establish a company in this sector is an excellent decision as surely, it will experience continuous growth.
3- Artificial intelligence
We may not be exaggerating when we say that artificial intelligence is controlling our lives at all levels.
For example, the UAE aspires to rely on artificial intelligence in services and data analysis at a rate of 100 percent by 2031.
State revenues in this sector are expected to reach about 300 billion dirhams by 2031, or 13.6 percent of the GDP.
According to Gartner, global AI software revenues are expected to reach $62.5 billion in 2022, an increase of 21.3 percent over 2021.
These numbers bode well for a prosperous future for the sector, and therefore it is wise to head towards this market since its growth expectations are high, especially with most advanced countries relying on this technology.
4- Cyber Security
There is no doubt that the issue of cyber security has become a concern for all companies, even countries, for fear of their sensitive data being hacked.
IBM estimates that the average cost of a data breach increased from $3.86 million to $4.24 million over the past year.
Also, 71 percent and 70 percent of Saudi and Emirati companies, respectively, are looking to replace complex cybersecurity and data protection toolkits with one unified console.
Therefore, setting up a company dealing with this sector has become more profitable and in high demand in the world today.
5- Metaverse
We have come to the most important, as the metaverse has penetrated the human world, and has taken a strong presence in the business markets, which prompted most international companies to enter this sector, especially in the Gulf.
Big tech companies consider the world of “Metaverse” to be the inevitable future of the Internet, one expected to be worth $800 billion by 2024.
So, entering this world early could prove to be a virtual lock for profits.
