Why Invest in the Middle East?

The Middle East. Such a misunderstood and misrepresented area of the world. For outsiders, the Middle East often conjures up images of explosions, unstable countries, and conservative communities. However, what global headlines often miss are incredible stories and examples of innovative initiatives and entrepreneurs rising across the region. If you’re looking for some good news coming out of the region, an excellent place to start is Baraka Bits, a relatively new startup that highlights good news from the Middle East. 

In recent times, investment analysts and investors have

So why should you become an angel investor in the Middle East? There are many answers to this question but this blog post will focus on entrepreneurship. 

A Huge, Untapped Market

The Middle East is huge. Stretching all the way from Morocco to the Gulf, the Middle East encompasses a very large area and population. What constitutes the Middle East is a contentious subject but there are at least 350 million people in an area as expansive as the United States. With so many people, most of whom speak the same language, entrepreneurs have a large market right on their doorstep. Consider this statistic: 5% of the world’s population is Arab but only 1% of online content is in Arabic. 

A Growing Market

Every year, the population of the Middle East increases by 7 million people and the total population will almost double by 2050. This translates to millions of young people entering a job market with serious issues of underemployment and unemployment. To plug this employment shortfall, startups and SMEs have a significant role to play in creating jobs and opportunities for young people.

Social Media Engagement

The Middle East has some of the highest levels of social media engagement in the world with a technology savvy generation entering the workforce today. Smartphone penetration is above the global average and social media is widely considered to have played a role in the Arab Spring. On some measures, the Middle East is world leading: Saudi Arabia is a vociferous consumer of YouTube content with the highest per capita consumption in the world and second only to the United States in absolute terms.

Strategic Geographic Location

The Middle East has a very strategic location in the centre of both the developed (Europe) and developing (Asia and Africa) worlds. It quite literally connects the worlds together. Already some of the world’s leading airlines – Emirates, Etihad and Qatar Airways – have tapped into the Gulf’s geographic significance, boosted by the simple fact that 90% of the world’s population is within an eight-hour flight of the Gulf. Entrepreneurs too can tap into the region’s geographic significance and are within easy reach of new markets. If you’re an entrepreneur in Silicon Valley and have to meet potential customers outside of North America, chances are you have a long flight ahead of you. There is no such problem for MENA-based entrepreneurs.

So what does this mean for angel investors?

When you consider all of these facets of the Middle East, it is clear that there is a massive opportunity for angel investors. Angel investors have already seen multimillion dollar exits with more to come. Internet giant Yahoo bought Maktoob for $165 million in 2009 and Rocket Internet Group acquired Talabat for $170 million in 2015. The leading e-commerce site in the region – Souq.com – is rumoured to have entered the famed unicorn territory with a valuation of over $1 billion. It is not a question of if the Middle East has a multimillion dollar startup waiting in the wings but when?