The realisation that startups have become a pillar to sustainable economic development has dawned upon many in the past few years in the MENA. Driving an eclectic mix of forces to venture, fund, accelerate, and incubate startups, and to support this ecosystem that breeds innovation. With each passing year, there seems to be a change in the sector trends, and where the fund providers seem to be more attracted towards. Should the focus remain on the most promising sectors or towards those with untapped potential? While both options are being explored by Flat6Labs & StartEgypt and other concerned bodies, the 2019 MENA Venture Investment Summary by Magnitt, highlighted that in 2019, Transport received the most funding; FinTech had the highest number of deals, and IT Solutions had the fastest growing number of deals.
If anything, this Magnitt report highlights a market that is becoming highly saturated with companies who are creating solutions in the aforementioned industries; generating revenue, closing investment rounds, and even closing exit deals in those very industries. It has become a highly competitive market for these companies, and if you don’t have something unique that differentiates your product/service, backed up with a strong knowledge of the market, you are most likely to be stomped by competition. What about other industries with untapped potential? How do they fair in comparison to the most trending sectors?
Gaming & E-Sports Market Share Will Reach $300bn by 2025
Gaming for one is an industry that has a stronger standing than the film and music industries, combined. It is expected that by the year 2025, the gaming and e-sports global market share will reach $300bn annually, according to Market Watch. Also, the MENA mobile gaming market share is growing at a steady rate in comparison to other regions, recording $680m in 2015. Most game developers and game studios are using microtransactions as a business model, and are generating high revenue. However, this strategy comes at a cost. Some game developers tend to abuse this business model to generate more revenue by hindering gamers’ progress unless they buy some of the in-game features they have on offer. It sets off the user, and causes rebellion (a great example of that is BattleFront II). The caveat here is to be capable of adopting such a profitable business model, while keeping the users engaged and without messing with the gameplay.
Other Gaming & E-Sports Flat6Labs startups: Seemba, VRapeutic, The Stories Studio, YAYY Studio, & SpicaTech Academy.
Healthcare Spending Will Reach $144 Billion in MENA by 2022
“According to a report from the Middle East Medical Devices and Diagnostics Trade Association, the annual value of the medical technology market in the region is set to grow to $11 billion by 2021 while overall healthcare spending will reach $144 billion in MENA by 2022 according to Al Masah Capital.” — Wamda.com
Chefaa (an online platform to order prescribed medicine from and a Flat6Labs Cairo Startup) has grown tremendously since they have launched their services to receive a six figure seed round. The startup ecosystem support, along with the high demand for services like Chefaa’s showcases a desire for people to actually use advanced technologies to make life easier. According to another article by Wamda.com, “people are willing to use advanced computer technology or robots with AI that can answer health questions, perform tests, make a diagnosis and recommend treatment.” Also, VRapeutic is combining the knowledge of gaming, VR, and health tech into realising a service that will help autistic children develop a more stable learning path through its VR-enabled learning solution.
Other HealthTech Flat6Labs Startups: Curotrip, AXON Medical, Pharmaklik
E-Commerce & Shopping: Are They Saturated Sectors With No Room For Innovation?
Another promising and highly diverse sector, is the e-commerce and shopping sector, with many problems existing in current platforms and abandoned markets, there are always new solutions to create. Exactly like what three of our startups are doing, while Souq.com is focused on selling any and almost everything, Brimore, Dabchy, & Shiphaly are doing things their own way to help people have a better shopping/selling experience. For one, Brimore (a Flat6Labs Cairo startup) offers end-to-end distribution channels where manufacturers can list their products, then it uses its network of women, housewives, and employees to sell and distribute their products in local circles. Brimore has raised $800k last year alone. Dabchy (a Flat6Labs Tunis startup) is an E-commerce platform with a focus on selling/buying women’s clothing whether new, used, or self-made with an active 400k users and a recent $300k fund. Shiphaly (a Flat6Labs Cairo Startup), on the other hand, is an online platform that helps people buy items from around the world, and helps travelers make money by delivering these items.
While in any of these industries you have a great chance at success, you do not need to be in a specific sector and following a specific trend to succeed. We welcome all kinds of innovative startups, and we invest in teams, passion, and true drive in every industry as long as they are tech-based. You will constantly be challenged, sometimes you will fail, and sometimes you will need to pivot because you’ve just realised a true gap in the market that you can fill. Do your best and luck will be in your favour. If you believe your startup could be MENA’s next unicorn, apply now for one of our programs: Flat6Labs or StartEgypt.
We want to see you make a dent in the industry you are in.