The MENA region has been a beacon of hope amidst the challenging global investment climate. Despite the economic downturn, MENA has seen a surge of positive investor interest, growing north of 20% in terms of funding. This growth is fueled by the emergence of sectors like FinTech and SaaS, as well as the innovative startups and favorable business environment in Egypt and other parts of MENA beyond the UAE and KSA. Here we share some exciting data points that shed light on the MENA digital economy’s resilience and potential.
1. MENA is a silver lining amid a muted global funding environment…
While the global investment climate took a severe downturn in 2022, MENA defied the economic macro & saw positive investor interest, growing north of 20% in terms of funding. This increase is fuelled by the rise of funding in Egypt and other parts of MENA beyond UAE & KSA as well as the growing investor enthusiasm across emerging sectors like FinTech, SaaS, etc.
2. …and has become a vital cog within the overall economy
The digital economy has emerged as a key pillar within MENA’s overall economy, contributing ~7% of private expenditure. Additionally, the digital ecosystem has created employment for more than 2 million people, especially within E-tailing, Foodtech and Ride-hailing sectors. The region also boasts of a democratic supply landscape where the market share of top players is very low compared to other regional benchmarks, indicating that opportunities are still abundant across the eco-system and some strong winners are set to emerge.
3. …where the new & innovative models throughout the value chain are driving the shift
MENA digital economy exceeded the unprecedented $100 Bn mark in 2022. New & innovative models are driving change throughout the value chain either through consumer-centric shopping experiences as with D2C or through building efficiencies and marketing/sales impact for businesses like social commerce. Furthermore, 2022 also marked the breakthrough of new sectors, such as Fintech, eB2B & SaaS.
4. MENA Digital Economy has surpassed ~100 Bn in 2022 and By 2030, it is expected to be close to the $600 Bn mark.
The digital economy’s share as a fraction of private consumption in MENA stood at 5% in the pre pandemic era as early adopters in its growth stage were mostly the Tech-Savvy, Gen Y, and affluent consumers. The pandemic period witnessed mass adoption of e-commerce, driven by a rise in demand for online grocery, food delivery, and other quick commerce platforms. Growing at a CAGR of +22% the digital economy will constitute 23% of private consumption in the region by the end of the decade.
