e& has announced its strategy for e& capital, its investment pillar at GITEX Global. e& capital disclosed latest deals and insights into how e& plans to further progress its aspirations as a global technology and investment conglomerate through its USD 250 million e& capital Venture Capital (VC fund). e& capital will further drive the tech ecosystem through larger investments at the growth stage beyond its VC fund.
Earlier this year, the transformation of e& provided the right foundations for the Group to consider VC and growth investments for early-stage entrepreneurs and rising startups. The e& capital VC mandate is to attract, engage and support startups, adding value to their journey by capturing synergies, providing access to investor and expert networks, and adopting a collaborative approach. Building on the Group’s strong fundamentals of more than four decades of growth, e& capital has the capabilities to discover and invest in startups with a significant market potential, a passionate founding team, a disruptive business model, and superior potential from a technology and business performance perspective.
e& capital investments will play a critical role in enhancing the offering for e& customers, with the e& investment arm already closing sizeable deals, thus standing as a testimonial of its determination and abilities. Already, it has made a strategic investment in VUZ, a leading immersive social app that allows users to stream and experience a new level of immersive realism in Extended Reality (XR) and metaverse digital experiences. Through its contribution to the USD 20 million in the Series B funding round for VUZ, e& capital stays committed to supporting startups that show promise of driving value as well as scaling in the near future.
e& capital had also funded Lablabee, a tech startup which will grow the world’s first hands-on lab platform for the telco cloud, offering training that is more interactive and accessible. Lablabee has demonstrated the potential to transform its novel ideas into a viable business solution that will add value to customers and impact the technology sector.
At GITEX Global, e& capital demonstrated how it is supporting early-stage entrepreneurs who possess the vision to build big businesses by facilitating education, mentorship, networking and funding opportunities. In particular, e& will be supporting the top regional female founders through prize money and other tangible rewards during one of the region’s leading exhibition and conference.
Hatem Dowidar, Group CEO of e&, said: “We believe that trends shaping the future are worthy of investment. With the future-focused e& capital business model, we want to be innovation custodians by delivering on our business objectives, executing meaningful investments, and earning global exposure. The uniqueness of e& capital revolves around several core elements: leveraging the strong foundations of e&, supporting bold startups that can make a difference, and acting as a catalyst for turning big ideas into the leading businesses of tomorrow. Given the close interplay among e&’s diverse business pillars, e& capital will assess synergies that help us accelerate the business growth of startups and the Group.”
Kushal Shah, Head of Venture Capital, e& capital, added: “As the investment arm of e&, our vision is to invest in business ideas that empower a better and brighter digital future. Building on the strong foundations of e& as a global technology and investment conglomerate, we are now taking massive strides towards supporting visionary tech businesses by enabling synergies and providing access to innovation. Once this happens, the regional tech ecosystem will evolve dramatically. Major change never happens overnight, and we are gearing up for a long-term goal of enabling meaningful progress that moves the world forward. As we build a portfolio of fast-scaling businesses that are already proven winners, we are looking forward to setting things in motion in VC and growth investments, as we rely on a thorough process that will continuously build and maintain momentum.”
According to market research from MAGNiTT and based on their Q3 2022 MENA Venture Investment report[1] published recently, funding in the first three quarters of 2022 stood at USD 2,331 million, recording a yearly increase of around 20%. However, this funding growth was against the backdrop of, the number of deals closed in the aforementioned period reaching 446, down by 4.7% annually.
In continued positive momentum, the UAE, Egypt and Saudi Arabia maintained the top three positions at the level of the number of deals and value of funding capturing more than 75% of the region’s shares. The UAE topped the funding value list with USD 845 million over 117 deals in the first three quarters of 2022, while Saudi Arabia followed with USD 818 million across 106 deals and Egypt came in the third position with $392M over 120 deals. Bahrain emerged into the top five with USD 120 million following a MEGA deal of USD 110 million closed in January. FinTech remains the industry of choice, ranking first in both number of deals which touched 94 with a share of 21% and value of funding which edged up by 74% to rest at USD 747 million with a share of 32%. Looking at the number of deals, e-commerce and Transport & Logistics (T&L) ranked second and third with respective shares of 15% and 10%. Regarding funding, T&L came in second place with a share of 13%, while Food & Beverage (F&B) came in third position with a share of 10%. Agriculture emerged into the top five industries in funding in the first nine months of 2022. This followed the USD 181 million MEGA round closed in June 2022. Globally, the value created by startups is about USD 3.8 trillion in ecosystem value, which is almost at par with the Gross Domestic Product (GDP) of a G7 economy, according to advisory firm Startup Genome.
Given the above venture capital funding trends in the region, e& capital is keen to promote the positioning of the MENA tech sector amongst its global peers, by successfully and sustainably scaling local startups to reach the global stage. e& capital is also ready to make bold, steady investments and stay the course, driven by teams and expertise that work in sync with the market pulse.
