Why the Middle East Is Becoming Attractive to International Investors
Nov 19, 2024
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Noor Sweid, founder of Global Ventures and the only Arab woman managing a VC fund in the Middle East, shares her insights on the region's booming investment landscape. She discusses the exciting shift towards venture capital, fueled by a young demographic and economic diversification. Ellen Huet, a tech writer for Bloomberg News, dives into AI's regulatory landscape, examining the implications of political changes and Silicon Valley's evolving stance on regulations. Together, they explore the Middle East's growing sectors like fintech and agritech, showcasing its potential for innovation.
International investors are increasingly focusing on the Middle East for venture capital, with over 51% of recent funding coming from abroad.
The region's governments are actively supporting entrepreneurship through initiatives and incubators, aiming to harness the potential of their youthful population.
Deep dives
BlackRock's Expansion in the Middle East
BlackRock has recently received a commercial license to operate in Abu Dhabi, highlighting its strategy to deepen ties within the Middle East. This move is significant as Abu Dhabi and Riyadh compete for the title of the region's main business hub, now holding over a trillion dollars in sovereign wealth each. For BlackRock's CEO, Larry Fink, establishing operations in these countries is a logical step to tap into vast financial resources. The influx of capital indicates a growing trend of foreign investment aimed at shaping the economic landscape of the region.
Evolving Venture Capital Landscape
Venture capital in the Middle East is undergoing a transformation as international investors increasingly pour funds into the region, marking a shift from a predominantly domestic focus. Recent statistics revealed that in the last quarter, 51% of venture dollars originated from abroad, a significant change from previous years when international funding was largely absent. This evolution showcases the region's potential for true innovation, particularly in diverse sectors beyond oil, such as technology and renewable energy. Firms like Global Ventures are capitalizing on this momentum, encouraging investment in a range of forward-thinking projects.
Innovation in Supply Chain and Food Security
The focus on innovation in supply chain technology and food security is crucial for the Middle East, as the region aims to create a more sustainable and efficient economy. Companies are exploring advanced manufacturing techniques, including 3D printing, to localize production and reduce reliance on global supply chains. Additionally, with 85% of food being imported, there is a strong push toward improving food security through technological advancements in farming. These initiatives position the region to leapfrog traditional methods and establish a modernized economy that nurtures innovation.
Government Support for Entrepreneurship
Governments in the Middle East play a key role in fostering entrepreneurship, driving initiatives that support startups and innovation. With an emphasis on technology, recent developments include the establishment of various incubators and funding schemes aimed at attracting entrepreneurs and venture capital. The region's youthful population presents both challenges and opportunities, particularly with a high unemployment rate among young people. Through investments in education and technology-enabled solutions, there is potential to harness this demographic dividend to build a thriving entrepreneurial ecosystem.
What would YOU like to hear about on Bloomberg? Help make shows like ours even better by taking our Bloomberg Audience Survey https://bit.ly/48b5Rdn Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF. Noor Sweid, Founder of Global Ventures, discusses venture capital investing in the Middle East and Africa. Bloomberg News Tech Features Writer Ellen Huet provides the details of her Businessweek Magazine story Trump’s Anti-Regulation Pitch Is What AI Industry Wants to Hear. Hosts: Carol Massar and Tim Stenovec. Producer: Paul Brennan.