Middle East Innovators Stand Ready To Go Public and Take the Global Stage
Anghami, the first music streaming platform in the Middle East and North Africa (MENA), will soon join many of the world’s leading technology companies when it lists on the Nasdaq exchange. Founded in 2012 in Lebanon and headquartered in Abu Dhabi, Anghami is a streaming platform with more than 70 million users. It will become the first Arab tech company to list on Nasdaq, signifying a milestone for innovators across the region.
Traditionally, companies seeking to go public in the MENA region have come from sectors such as real estate, financial services and energy – and they certainly remain core regional strengths. But thanks to key investments in building knowledge economies, there are ambitious tech companies that are poised to lead the charge in the years to come.
Abu Dhabi’s US$13.6 billion Ghadan 21 accelerator program has made significant progress preparing the economy and its workforce for the challenges and opportunities of the fourth industrial revolution. The Abu Dhabi Investment Office’s US$545 million Innovation Program provides incentives to innovative businesses with the potential to benefit not just the region, but the world.
One prominent impact of these initiatives has been the development of a thriving local tech startup community. In less than two years, for instance, the UAE capital’s global tech ecosystem, Hub71, has grown to more than 100 startups from 20 countries across 16 tech sectors. It has provided innovation-led companies in Abu Dhabi with support and enabling programs and services to help founders build and scale cutting-edge technologies by ensuring the availability of investments, commercial activities and incentives from its public and private sector partners.
UAE-founded EdTech startup, Lamsa, has raised more than US$15 million through equity, debt and grants to support its regional expansion from Hub71. Another Hub71 startup Securrency, with its global headquarters in Washington D.C., develops digital infrastructure for banks and other financial services providers. The company has successfully completed multiple rounds of funding, raising US$30 million in its most recent funding round and boosting its expansion prospects to the Middle East, using Abu Dhabi as its regional hub. The UAE contributed the lion's share of total funding in MENA in the first half of 2020, with these and other deals cementing the country's leading position when it comes to startup support.
As the innovation ecosystem reaches critical mass, the line of candidates from the tech sector ready to make their public debut will only increase. Abu Dhabi has configured its infrastructure and robust regulatory environment to support these companies, with the ‘ADX One’ strategy of the emirate’s local bourse introducing a new pricing structure to enhance market liquidity, incentivize trading and increase the attractiveness of listing. Companies can also draw on some of the region’s largest and most forward-thinking investment banks and advisory firms, as well as specialist lawyers, accountants and auditors.
The strategy also aims to increase ADX's international attractiveness. The number of foreign investors on ADX increased by 38% in 2020, attracted by the increase in foreign ownership limits of some of Abu Dhabi’s largest publicly traded companies, boding well for the pipeline of at least 10 listings expected this year, including three ETFs.
Anghami has established a template for other companies across the region to follow. The ecosystem and infrastructure are in place for a new wave of tech companies born in the MENA region to massively accelerate their growth by tapping into global capital markets. For investors and innovators, this year could be the time when the region’s tech industry hits a high note.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.