Keeping a startup running is even tougher than starting it in the first place as 60 such startups got to know this in the last 5 years. MAGNiTT has released the results of its analysis on technology startup exits in MENA (The Middle East and North Africa) region. Some of the facts that have surfaced are really eye-opening, to say the least. 2015 saw the biggest number of startup exits with 16 companies either selling itself or going bankrupt. 2017 has already seen 8 companies exiting the business and the number is likely to grow by the end of the year. According to the study the Middle East and North African region have seen 60 startup exits in the last 5 years, the value of which is estimated to be more than US$ 3 billion.
The study further found that only 35% of the MENA exits were disclosed to the public while the rest remained a mystery. The founder of MAGNiTT Mr. Philip Bahoshy said that corporates at all levels are becoming more interested in startups and this gives rise to further acquisition by the bigger and already well-established companies.
The study also found that 60% of the disclosed companies were based in UAE which is a very optimistic. Another such positive sign is the fact that 47% of the exited companies were acquired by MENA-based companies. The data also confirmed that e-commerce saw the largest number of exits, around 22% followed by media which amounted to 18% of all the companies exited. F&B sectors were third in terms of startup exits amounting to 15% of the total exits.
The fact that all these startups solve logistical problem of delivery and are consumer facing is a bit interesting. The study further finds out that startup exits in MENA are primarily through acquisitions by the bigger companies. The fact that these startups are very small and haven’t got a full proof revenue generation plan often becomes the biggest reason for their exit. In addition to this, they also don’t have other funding sources which often pushes them to exit.