Exclusive interview with CEO of Middle East Venture Partners

Prior to founding MEVP and growing its AUM to $120M, Walid was the CEO of Dubai International Capital’s venture arm “the Arab Business Angels Network” (ABAN), which managed a regional seed venture fund as well as the first Business Angels Network in the Arab World. Prior to ABAN, he has served on the investment-management team of Abraaj Capital. In May 2017, Mohamed Al Abbar has acquired a non-controlling stake in MEVP.

Despite starting recently and from a low base, the MENA region is increasingly becoming a hub for tech innovation and disruption across all tech sectors.

In parallel, we are seeing public sector initiatives rolled out to foster entrepreneurship and embrace the ‘new economy.’ The UAE is taking an active role and so did Lebanon not long ago with its Central Bank initiative, called C.331

Ultimately, all players need to work together to build an ecosystem around tech. Governments, corporations, investors and others are all embracing innovation and we expect this trend to continue.

With regard to trending sectors, we are seeing more investments in e-commerce marketplaces, FinTech and Blockchain.

How is the funding scenario in the ecosystem different from three years ago?
Historically, the region lacked funding for technology and online companies, but it is somewhat different now, compared to three years ago. In the MENA region (and combining all investors), we went from about $200 million in total investments in 2013 to more than $800 million in 2016. We’ve also started seeing some mega-rounds and exits lately. This was certainly not common in MENA a few years ago.

We still see a gap in funding in the growth stage compared to the seed and early stages, however, the picture is quickly changing in that respect. At MEVP, we have been focused on early stage opportunities but are now working towards closing a large fund focusing on growth stage VC investments.

Even though money is more available now, it is important to highlight that ‘smart money’- the one that brings significant value to the startups – is still rare. In addition to financially supporting the entrepreneurs, smart money brings much needed strategic advice and operational support. We do not see growth in AuMs slowing down, however we worry that smart money might not catch up in parallel.

In terms of sectors, three years ago we used to see more digital media, payment solutions and inventory driven e-commerce solutions.

There has been a rise in interest for tech investment. Are family offices and corporate VCs emerging as a new source of funding for startup companies?
Indeed. Although still nascent, family offices are increasing their interest in tech and corporations are, at the very least, starting to partner with startups to avoid being disrupted by them.

Whereas family offices have traditionally focused on sectors like real estate and industrials, they are starting to realise that they need to embrace the new economy. Take the example of brick and mortar retail, which is today witnessing and reacting to the storm that the Souq and Namshi acquisitions have initiated.

Corporate involvement can take many forms, such as direct partnerships with startups (and we’ve seen a lot of activity here especially with telcos, banks and media companies), investment into VC funds or direct investment/co-investment in companies. A case in point is STV, which was recently launched to lead technology venture investments for Saudi Telecom.

Recently Mr Mohamed Alabbar has triggered a series of tech investments from Emaar and from his own private vehicles, by acquiring a large stake in MEVP. Mr Alabbar is becoming the most active tech investor amongst the GCC families.

How will corporate VC involvement benefit the ecosystem
Corporate VCs bring in funding and know-how from their traditional businesses. They can incubate startups and transfer resources to support their growth. In addition, funding from a corporate VC adds confidence in a business and drives co-investments by other players such as traditional VCs. The most corporate VCs in our region are the Telecom operators, which are STC, Zain, du and Batelco.

How are you attracting family offices to invest in technology via your fund? What are the main objections that you have faced and how have you overcome them?
We managed to attract over six family offices – mainly from KSA – to become LPs across our funds. The key challenge has been trying to convince them to invest in a black box over a period of seven plus years. We took it upon ourselves to educate them on the asset class. Some were very sophisticated but others were not. We showed them our track record, our portfolio to date and the pipeline opportunities we are actively pursuing that can fulfil – at least up to 50% – our investment appetite over the fund’s investing period. We also showed them the 50+ exits that were concluded throughout MENA over the past 5 years.

On October 31, 2017, Naseba will be hosting the 3^rd MENA Private Equity and Venture Capital Summit in Dubai, United Arab Emirates. The primary focus of the summit is to offer a deal flow platform that will introduce representatives of sovereign wealth funds, traditional PE and VC firms, regional conglomerates and family-owned businesses to innovative business cases from around the world.

The summit will combine insightful panels led by key regional and international tech investors and experts and pre-scheduled introductory meetings between up to 30 healthcare, life science and ICT investment opportunities and key regional investors and strategic partners, to raise capital and form strategic and commercial partnerships, in an informed and exclusive environment.

To access the Middle Eastern investors and strategic partners submit your business case here,

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Alternatively, email me at alexbnaseba.com to schedule a meeting with me.

Alex Baine
Project Lead
+971 4455 7954