scalable to leverage their platform to enter new markets. The Dubai-based venture has now evolved into a US$1 billion “unicamel”– one of the region’s first startup unicorns.
4/ Business Model
Predictably, your business model has to stand up. This doesn’t just mean that the financial projections have to be sound. Investors will want to understand your path to commercialization and what will drive pricing power, but they will also interrogate the source of projected value. How do you intend to ensure customer acquisition costs will remain low? What is the lifetime value of a customer? For a B2C business, what is your projected average order value? For B2B, what is the likely customer churn? For businesses that create value for the ecosystem, how much cost saving is being created for your customers and users versus options currently in the market? You might take the route of focusing on attracting a small amount of die-hard loyal customers as that shows a product-market fit that can then be scaled with growth investments and optimization of the commercials.
FOR THE PRODUCT OR YOUR SOLUTION TO REALLY WORK, IT MUST BE UNIQUE, DIFFERENTIATED AND DEFENSIBLE, OFFERING SIGNIFICANT QUALITY AS WELL AS TIME AND COST SAVINGS TO STAND OUT FROM THE COMPETITION.
helping to drive the pace of economic growth across numerous sectors. Flat6Labs, startAD, in5, and DIFC Fintech Hive, among many others, all help businesses during the early development stages, providing business model advice, resources, contacts and necessary capital. They will allow you to test your business plan and provide access to experienced executives from whom you can gain industry credibility. Often providing access to industry mentors, incubators will offer guidance on everything from the basics through to fine tuning a model that is ready for
investors. Some even hold open pitching events, allowing you to hone your delivery and network with potential funders and partners. Meanwhile, VC activity in the Middle East is booming. Startups and fund managers are attracted to the region, increasing both inbound investment and activity from local sovereign wealth funds. Indeed, it’s been reported that in January 2022, startups in the MENA raised a total of $247 million, a 20% increase month-onmonth and a staggering 474% year-on-year increase, with KSA, Egypt, and the UAE leading the way in
terms of deal count. These are big numbers, and the opportunity is there for the taking. By heeding this checklist, you give yourself the greatest chance of access to a slice of this billion-dollar pie.
Abbas Berdi is a venture and growth stage investor, a startup mentor with the Harvard Business School New Venture Competition, and an advisor on capital raising and business plan development to growth stage businesses in emerging markets.
} HELP IS AT HAND Adhering to these criteria need not be overwhelming, and thankfully there are a number of resources and initiatives on hand to help. Incubators are a great resource, providing fledgling startups with a competitive set of acceleration support tools to jump start their business. The UAE, for example, is now home to an ever-growing roster of startup incubators, which are June 2022 / E N T R E P R E N E U R . C O M / 53
