In early February 2023, it was announced that a new digital giant had been born in the Middle East and North Africa region, when the Egyptian start-up company MNT Halan specialized in the financial technology sector “Fintech” secured a huge financing of $200. $1 million from Chimera Capital Abu Dhabi Fund, in exchange for acquiring a 21.7% stake in the company.
This huge funding comes within a larger package of funds that the Egyptian start-up is expected to reap during the current year, as it is expected to collect an additional $200 million from international investors and securitization bonds, so that its financing during this year will reach about $400 million, which is in addition to the rounds Previous financing it obtained in the past years, to become one of the largest financing startups in the Arab world, with total financing close to $520 million.
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New member of the club
The MNT Halan platform was established in Cairo in 2018 by Egyptian entrepreneurs Mounir Nakhla and Ahmed Mohsen, as a multi-use application (super application) that mainly specializes in financing and micro-lending services, electronic payment facilitation services and money transfer.
Over the years, the startup achieved growth in its services, until it obtained its first large financing in the fall of 2021 with a financing round of $ 120 million, which paved the way for the large financing rounds that it reaped during the beginning of this year.
During the first three quarters of 2022, the company's revenues - according to Forbes - amounted to about $ 203 million, a growth rate of nearly 40% compared to the same period in 2021. Currently, the company has more than 1.3 million active users per month, and more than 5 million customers distributed Between 2 million borrowers and 3 million users of the rest of its various financial services.
With a huge market like Egypt, the market segment is expected to increase exponentially, with the government and society moving towards digitization of financial services.
This funding made the Information and Decision Support Center of the Egyptian Council of Ministers issue an official publication on its social accounts celebrating the arrival of the Egyptian start-up to the "Unicorn" club, as the latest company to join this club in the Middle East and North Africa, a club that has so far globally included about Only 1200 companies, among millions of companies in various specializations and fields.
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Unicorn companies
In the business world, a startup is called a "unicorn" when its market capitalization exceeds a billion dollars.
This nickname "unicorn" is relative to a fictional animal in Greek mythology that has the body of a horse and has one horn in its head, referring to it being unique and different from other animals, and also referring to its rarity.
The "unicorn" company, then, derives this designation from being very unique and rare, since its market value has exceeded one billion dollars.
The term is relatively new. It was coined for the first time in 2013 by the American venture capitalist, Eileen Lee, through an article she published in the Tech crunch magazine, which specializes in technology and entrepreneurship, to refer to startups whose value exceeded a billion dollars. At that time - at the time of publication of the article - only 39 startups around the world.
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With the adoption of this term in describing the value of startups, other terms continued to describe companies with the successive increase in their value, as the term “Deca corn” is applied to startups whose value exceeded $10 billion, while a private company whose value exceeded $100 is called One billion dollars in the name of "Centicorn" or "Hectocorn".
As for the company, whose value exceeds a trillion dollars, it is called "Super Unicorn".
Today, according to the "CB Insights" platform for market studies and business analysis, the number of billion startups has exceeded the ceiling of 1,200 global companies, with an accelerating rate of joining the club up to two companies per day.
Certainly, the United States occupies the first place in the number of unicorn companies, as it accounts for almost half of them with about 650 companies, then Chinese startups come in second place with about 302 companies, then India with more than 100 companies, then startups in Britain, Germany and France.
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Arabic unicorns
With the Egyptian startup "Hala" joining the unicorn club, it joins a list of Arab companies whose number does not exceed the fingers of two hands.
Certainly, given that it is the most developed Arab country in the startups and entrepreneurs sector, the United Arab Emirates tops the list of Arab countries that have unicorns on its soil, followed by Egypt, and then the Kingdom of Saudi Arabia in third place.
Careem, the ride-hailing company, exceeded a billion dollars in 2016, before its acquisition by Uber in 2020 (communication sites)
Careem, the ride-hailing company, which was established in 2012 and is based in the UAE as its main headquarters for its operations in the region, was the first Arab company to reach the Unicorn Club, when its value reached one billion dollars in 2016. Subsequently, the company "Careem" was acquired. Careem by the global participatory transportation giant “Uber” with one of the largest deals in the region, estimated at $3 billion.
As for the Egyptian company “SWVL” (SWVL), of Egyptian origin, based in the UAE, which specializes in participatory transportation via buses, it joined the Unicorn Club in 2021, only 4 years after its founding, after it was offered for public subscription on the Nasdaq Stock Exchange, at a value of $ 1.5 billion.
However, despite the great Arab celebration of its arrival in the global stock exchange with such a great valuation, it later suffered a sharp decline in the value of its shares, which caused it to lose more than 95% of its value.
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Also in the UAE, and in the summer of 2021, it was announced that a new Arab member had joined the Unicorn Club, which is the emerging Emirati cloud restaurant company, Kitopi, after receiving financing that was considered the largest in the Arab region, at a value of $ 415 million, in an investment round of the “category” C", which raised the company's financing value to more than $800 million, raised its market value to more than $1 billion, and turned it into a regional and global player in the field of cloud kitchens.
Cloud Kitchen Company Kitopi Enters the Unicorn Club After $415 Million Funding (Ktopi)
In Saudi Arabia, the emerging Saudi financial technology company "STC Pay" joined the Unicorn Club in 2020 after the international "Western Union" company acquired 15% of the company for $200 million, raising the company's valuation to more than $1 billion. , to become the first Saudi financial technology company, "Fintech", to cut its way into the world of the unicorn.
In Egypt, unlike the “Hala” company, which recently joined the Unicorn Club, there is another company working in the same sector that had previously entered the adult club, and it is the “Fawry” company that specializes in digital technology and electronic payment, which has reached the rating My market exceeded a billion dollars in the summer of 2020, then escalated to a ceiling of one and a half billion in mid-2021. “Fawry” is one of the largest growing Egyptian companies in digital payments, and it cooperates with a large network of banks and institutions, and witnesses more than 3 million transfers from through daily.
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They are on the way
Although the number of Arab startups joining the club of billionaire companies so far is very modest compared to other regions around the world, the picture is not that bleak.
In August 2022, the Saudi Technology Ventures Fund, the largest venture capital fund in the Middle East and North Africa region, issued a report predicting that the region will witness the emergence of about 45 billion startups (Unicorns) in the coming years until 2030.
The report, titled "From Incorporation to Listing on the Stock Exchange: The $100 Billion Opportunity," said that the region will witness the emergence of dozens of billionaire companies with a total expected value of up to $100 billion, based on an analysis of the entrepreneurship system in the region.
According to the report, the Kingdom of Saudi Arabia will play a pivotal role in establishing, supporting and hosting a large number of these companies on its territory, due to the major boom in digital transformation that it has witnessed in recent years.
The report also predicted that the region would witness the emergence of "Deca Corn" companies during the current decade, with a market value exceeding $10 billion, especially in the Gulf countries, which are witnessing a great acceleration in the establishment of huge technology companies whose activities extend to several markets in the region and the world.
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In the end, there is no doubt that the Arab entrepreneurship environment has achieved remarkable growth over the past years, with total funding for startups rising to a ceiling of $3 billion in 2022, and a number of billionaire companies emerging faster than before.
Therefore, it is only a matter of time until dozens of unicorn companies emerge, perhaps before the end of the current decade.
This is what expectations indicate, but the decisive factor remains what will actually happen on the ground.
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Sources
1- The Egyptian MNT Halan attracts $200 million in financing from the Emirati Chimera, and its valuation reaches $1 billion.
2- The Egyptian MNT Halan for Finance and Lending reaps $ 400 million in financing and joins the unicorn companies
3 - Welcome to The Unicorn Club: Learning From Billion-Dollar Startups
4 - The Complete List Of Unicorn Companies
5 - Meet the Middle East's 5 Unicorns
6- Unicorn: The 6 largest emerging Arab “unicorn” companies, with a value exceeding one billion dollars
7- The ordeal of Swvl.. How did the most famous Arab mass transit company lose 95% of its value?
8- Saudi Arabia leads the unicorn boom in the region: 45 companies worth $100 billion in 2030
9 - STV Report: More than 45 billion technology companies in the region by 2030