Technology startups and investors from Singapore and Middle East and North Africa (MENA) nations are pursuing bilateral business opportunities and strengthening their ties through partnerships and financial participation.
A new analysis by Magnitt, a startup data platform focusing on the Middle East, and Expand North Star, a startup event series, highlights the growing venture capital (VC) corridor between Singapore and MENA, exploring the main drivers powering the trend and delving into the most notable deals secured so far.
According to the report, at least 16 startups from Singapore have scaled to MENA so far, attracted by the region’s strategic geographic position as the gateway between Europe, Asia and Africa, large and growing consumer market and increasing appetite for technology.
Of the 16 startups identified, ten are fintech companies, a domain which Singapore is excelling in, and which MENA nations are looking to foster with hopes of improved financial inclusion, economic diversification as well as to maintain global competitiveness.
These companies are:
- StashAway, a robo-advisory platform which claims US$1 billion in total assets under management (AUM) and clients spanning 145 countries;
- Thunes, a business-to-business (B2B) cross-border payment platform serving the likes of Uber, Deliveroo, Grab, PayPal, Remitly and Revolut;
- Nium, a payment infrastructure that specializes in payments and card-issuing services and a fintech unicorn;
- Utu, a tech company that strives to transform global travel by empowering tourists with rewards and higher value added tax (VAT) refunds when shopping abroad;
- Aleta Planet, a payment technology provider of merchant acquisition, card issuance, remittance and B2B payments;
- Dltledgers, a blockchain-powered supply chain digitalization platform for enterprises engaged in supply chain and trade finance operations;
- Volopay, a financial solution provider that offers corporate cards, automated expense management, and accounting integrations;
- AirCarbon, an exchange that uses blockchain technology to improve efficiencies in carbon trading;
- Kilde, a digital private debt platform that recently secured US$1.12 million in seed funding; and
- Touche, a tech company that offers a fully integrated mobile Android-based smart payment terminal for the food and beverage industry.
In addition to the growing list of Singaporean startups setting up in presence in MENA, the report notes that Singapore investors are also turning their sight to the region, drawn to the region’s economic growth, digital transformation and favorable demographics. These investors are backing some of MENA’s hottest and fastest-growing startups, including Dubai-based buy now, pay later (BNPL) superstar Tabby, expense management platform Pemo, and metaverse startup MetaFi.
The report identified 12 Singapore-based investors that have deployed capital in startups location in MENA, namely:
- Arbor Ventures, a fintech-focused VC that’s backed Tabby and Israeli insurtech startups Planck and Voom;
- Antler, a business incubator, accelerator and early-stage VC firm that has invested in Pemo;
- Altonomy, a trading, advisory, and asset management firm specializing in digital assets with an AUM northwards of US$500 million and which is backing Zone, a gamefi ecosystem from the United Arab Emirates (UAE);
- Athena Ventures, a blockchain-focused VC firm and an investor in UAE-based metaverse firm MetaFi;
- Atlas Asset Management, an investment management company that offers discretionary and advisory asset management services as well as access to global private equity investments to investors in Asia;
- Education in Motion, a global education company;
- Elekron Ventures, an early-stage VC firm;
- Megala Ventures, an institutional investor in blockchain and distributed ledger technologies (DLT) and a backer of MetaFi;
- SC Ventures, the VC arm of incumbent bank Standard Chartered which has invested in Secret Double Octopus, an Israeli passwordless authentication solution for businesses;
- Taurus Wealth Advisors, an integrated wealth management firm; and
- X21 Digital, a blockchain advisory and investment firm that’s backed MetaFi.
At the same time, the report notes that several MENA-based VCs have started investing in Singapore startups, citing the examples of:
- Dubai-based BECO Capital, which has invested in the likes of Carousell, a multi-category platform for secondhand, and Nas Academy, an education platform;
- Middle East Venture Partners (MEVP), which is backing Wego, a Singaporean online travel marketplace; and
- VentureSouq, which counts in its portfolio Singaporean companies including Jenfi, a provider of small business loans based on revenue; Aspire, a multi-currency business account for startups and small and medium-sized enterprises (SMEs); and Volopay.
The report highlights several reasons why the Singapore-MENA corridor is growing, outlining considerable opportunities for startups and investors in both locations.
Singapore has an advanced tech ecosystem and boasts strong expertise in areas such as fintech, artificial intelligence (AI) and logistics. The city-state is recognized as one of the leading startup hubs in Asia owing to its well-developed infrastructure, government support, access to capital and highly skilled and diverse workforce.
MENA nations, meanwhile, have been supportive of tech startups, recognizing the importance of these young ventures in driving economic growth, job creation and technological advancement. The level of support does however vary among countries across the region, with the UAE, Saudi Arabia and Egypt standing at the forefront of fostering startup ecosystems, while others are still in the early stages of developing their startup ecosystems.
Featured image credit: Edited from Freepik