VC funds in MENA are for institutional investors by Loulou Khazen Baz

7 MIN READ, AUGUST 25, 2023
7 MIN READ, AUGUST 25, 2023
The second EMERGE Club newsletter went out! This time we talk with Loulou Khazen Baz, the Managing partner at Spade Ventures, an angel syndicate that invests primarily in early-stage technology startups operating in the Middle East, North Africa, and Pakistan. So, here is a sneak peek of our insightful discussion about VC trends in emerging markets and raising funds in the MENA region. Enjoy your reading!
Below, we present you a brief version of several key thoughts from our interviewee. The full version of the newsletter, including news from the VC market, Loulou's fuck-up story, her personal VC experience in H1 2023, and her thoughts about the future of the VC industry, can be found in the complete version of the newsletter available to EMREGE Club members. Wondering how to become a member? Just keep reading!

So, it's time to delve into the MENA VC observation and Loulou's insights on AI as a global trend.
MENA VC trends:

  • Dubai's Magnitt, a startup investment data hub, just published its Q1 2023 report highlighting a sharp 41% drop in Venture Capital investments compared to last quarter

  • The top industries receiving VC funding remain unchanged despite a 50% YoY decline. In H1 2023, funding went to 1FinTech, E-commerce/Retail, Transport & Logistics, Enterprise Software and F&B

  • The region and particularly the UAE continues to attract talent from all over the world with a noticeable increase from the Russia/ CIS markets. There is a concern that more entrepreneurs relocating to the UAE may put pressure on an already declining venture capital spending in H1 2023 vis-a-vis the $4Bn invested capital in 2022

  • Emerging Saudi Arabian startup ecosystem has secured 42% of VC investments in the MENA region and surpassing the UAE for the first time, ushering in a new era for Saudi entrepreneurs and further establishing Saudi Arabia as a vital market for scaleups

  • North Africa and particularly Egypt continues to emerge as a significant player in the MENA startup ecosystem with several a $260Mn mega deal by fintech MNT Halan

  • The decrease in VC funding is testing both entrepreneurs and investors. New startup founders are hustling longer to secure funds, while existing players are optimizing costs and seeking extra cash to keep going. Some are even facing lower valuations, adding extra challenges to the mix

About AI as a global trend

A lot of VCs are looking very closely at the implementation of AI across industries and the disruption that will ensue. I am personally in the wait-and-see camp, trying to understand and learn more about the implementation, limitations, regulations, and disruption that AI will lead. There will certainly be winners, the question is do you invest at the beginning of the curve or do you wait until you see some promising use cases? In general, a first mover does not necessarily mean a clear winner, especially in nascent technologies and ones that cause a shift in consumer behavior.

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