Gulf Capital has announced that it has deployed over half a billion dirhams (over AED 500 million) to date in technology and e-commerce investments across the GCC, making it one of the largest technology investors in the region.
Addressing more than 6,000 delegates at Step Conference, Dr Karim El Solh, CEO of Gulf Capital, said, “The technology scene is rapidly evolving in the GCC, and we are seeing the rise of a number of regional players that are becoming market leaders on both the regional and global fronts. Gulf Capital is actively backing and investing in these market leaders and helping them graduate to the next level. We forecast a substantial increase in technology investments in the GCC and significant returns to be generated for the early backers of these technology companies.”
Gulf Capital’s first technology investment was in Destination of the World, which has become one of the largest online accommodation wholesalers in the world, with footprints extending from North America to Asia Pacific. Gulf Capital has also invested in two e-commerce platforms, namely Sporter.com, and Emirates Auction.
According to Boston Consulting Group (BCG) the digital economy, which contributed US$2.3 trillion to GDP in the G-20 in 2010 and is estimated at more than US$4 trillion in 2016, is growing at 10% a year; significantly faster than the global economy as a whole. The growth in the digital economy is even higher in emerging markets: 15% to 25% per year. B2C ecommerce, in particular, is growing at higher rates in MENA and other emerging markets, compared to more mature ones. In MENA, B2C ecommerce grew at 20% in 2015, compared to 11% in the UK, 12% in Germany, 7.7% in France, 33.3% in China, 22% in Brazil and 12.5% in North America.
“Regional ecommerce is still small when compared to world averages, but this is set to change,” Dr Karim El Solh added. “Recent transactions like Amazon buying the leading regional online marketplace Souq.com demonstrate the huge potential global players see in this market. At the moment, the share of ecommerce in the GDP of the Middle East and North Africa region is at the bottom of the world list, with the eGDP representing 0.71%, against a global average of 3.11%, according to a research conducted by Ecommerce Foundation. So, however you look at it, the regional growth potential is huge.”