Wamda invests $60 million initial funding ahead of schedule

The Dubai-based venture capital firm Wamda Capital has invested 40 per cent of its first phase funding in 11 companies ahead of schedule, as the internet booms in the Middle East and North Africa region despite slower economic growth.

Wamda has raised US$60 million in a first round of funding out of a $75m regional growth stage investment fund, Wamda Mena Ventures I. It plans to raise the remainder this year.

Among its investments are stakes in Careem, a taxi-hailing service that competes with Uber; Mumzworld, an e-commerce site selling products for mothers; Jamalon, an online Arabic bookstore; and News Group International, which specialises in sourcing, distributing, monitoring and analysing news contents in Mena and the Indian subcontinent.

“We thought we would invest over four years but we are seeing many more start-ups and growth companies than we anticipated originally,” said Fadi Ghandour, the chairman and chief executive of Wamda.

He was speaking at the launch of the Sharjah Entrepreneurship Center or Sheraa, which will be based at the American University of Sharjah to help emerging entrepreneurs launch their ventures.

Wamda typically invests up to $5m in a single technology company that has growing revenue in the region.

The economic slowdown in the Mena region is unlikely to affect the growth of technology companies but will make it more difficult for them to raise funding, he said.

“It will impact fundraising more than it will impact start-ups,” said Mr Ghandour. “In the internet space building a business is a low-cost enterprise in the beginning and because we are starting from a very low base, it is too early to talk about slowdowns in the technology and internet space.”

One big part of the boom in technological businesses is the e-commerce space, he said.

He is predicting no less than 50 per cent growth in e-commerce this year in the Mena region. “I would predict that last year despite the slowdown in the economies and despite how retail was affected, e-commerce grew probably anywhere between 70 and 100 per cent in the Mena region,” said Mr Ghandour, who is also the founder of the logistics group Aramex.

“It is a new business and a different way of acquiring a product and people are adopting it and some of them are moving from retail to e-commerce,” he said.

E-commerce it set to nearly double in value in the Arab region to $13.4 billion by 2020 from $7bn in 2014, according to the online payment platform Payfort.

dalsaadi@thenational.ae

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