Session Name: $1 Billion Dollars in MENA Startup Funding? What Needs to Happen – Keynote by Magnitt

To end day one of STEP 2020, keynote speaker Philip Bahoshy, Founder and CEO of Magnitt, spoke about what needs to happen for the MENA region to reach $1 billion dollars in startup funding. Magnitt is one of the leading platforms in the MENA startup ecosystem for start-ups, investors, corporates and enablers.

Bahoshy previously predicted that last year, the region would collectively see $1 billion dollars worth of venture funding – however, last year the region came a bit short. According to one of Bahoshy’s investors, Bassel Muftah from Global Ventures, “It’s probably not going to happen this year.” Bahoshy decided to break that reasoning down, to work out why, and find out what needs to happen for the region’s startups to raise $1 billion worth of investment.

According to Bahoshy, “In order to get to 1 billion dollars, you need a 2% shift down of early stage investments, and a 2% shift up of Series A.” He proceeded to explain that by investing in later stage startups, and deploying that capital, only then will the region start seeing a 1 billion dollar figure. 

“In order to get to 1 billion dollars, you need a 2% shift down of early stage investments, and a 2% shift up of Series A.”

Philip Bahoshy, Founder and CEO, Magnitt

Planting the Seeds

Additionally, Bahoshy broke down what some of the key stakeholders in the ecosystem can do to try and help flourish the ecosystem. He stated that, “For more of these investments to come into fruition, more work needs to be done in planting the seeds to the future, and acknowledging that this doesn’t happen right now. The exit of a startup, like Careem, took eight years. So planting the seed now will see future benefits.” He also discussed infrastructure solutions, and the importance of identifying the pain points for startups. 

The Importance of Smart Capital

“Smart capital is much more effective than any capital.”

Philip Bahoshy, Founder and CEO, Magitt

Lastly, the Magnitt CEO and discussed the importance of intellectual capital transfer to allow for free movement of information. He advised investors to lobby, in order to try and help solve startup pain points, in addition to closing capital as quickly as possible for startups to be able to grow their companies. Bahoshy ended the talk with, “Smart capital is much more effective than any capital”, and added that having the right governance and oversight, implemented properly, along with education from international VCs on how to apply that to the local market, is extremely powerful. It’s not just about giving startups capital – it’s about how do you manage them and monitor that over their growth just to make sure that they’re doing that actively.”