The AI industry is currently experiencing a significant surge, with startups playing a pivotal role in driving this technological revolution. OpenAI set the stage for this AI phenomenon when it introduced ChatGPT in November of the previous year. Presently, generative AI has the potential to create up to $4.4 trillion in value across various industries.
The Expand North Star (ENS) event took place on AI Monday, featuring a showcase of more than 400 startups infused with AI technology. Furthermore, AI emerged as a central theme across all the conference sessions. One noteworthy panel discussion, titled “Generative AI Market Map: Valued at $98 Billion – VCs Eager for AI & DeepTech Startups: Hype or the Next Frontier?” delved into how innovative AI startups are reshaping the corporate landscape. The discussion was skillfully moderated by Aly Madhavji, Managing Partner at Blockchain Founders Fund.
During the panel session, the experts explored the challenges faced by early-stage startups and the necessary due diligence as these companies mature. Notable figures such as Dhianu Das, Founder of Agility Ventures in India, Dan Bowyer, Partner at SuperSeed VC in the UK, and Chirag Gupta, Managing Partner at 8X Ventures in India, emphasized that a challenging macroeconomic environment and tighter budgets are compelling companies to trim costs. To address these challenges, organizations are increasingly turning to AI, which has proven invaluable in streamlining operations. Bowyer went on to assert, “Ultimately, every business will become an AI business. This underscores the transformative power of AI. In my view, AI is this generation’s equivalent of the internet revolution.”
In the realm of venture investment, the MENA region witnessed substantial growth in the third quarter of 2023, as per the Q3 2023 MENA Venture Investment Premium Report by startup data platform MAGNiTT. A total of $250 million was raised across 78 deals, representing a 32% increase compared to Q2 of 2023. This brings the cumulative funding to $1.4 billion through 286 transactions in the first nine months of 2023. Saudi Arabia and the UAE were at the forefront, with the Kingdom reporting a remarkable 172% quarter-over-quarter increase, while the Emirates saw a 55% upswing in new funding. By transaction volume, the UAE led the way, accounting for a third of all deals in the MENA region during the first nine months of 2023.
Philip Bahoshy, Founder and CEO of MAGNiTT, highlighted that the impressive Q3 performance can be attributed to several mega deals, where investments exceeded $100 million, occurring across the region. In a pre-report note, Bahoshy also noted the emergence of new VC funds in the region, with entities like UAE’s Chimera Capital and Aliph Capital launching new funds and Saudi Arabia’s IMPACT46 and KAUST raising funds for local startup investments. Bahoshy expressed a keen interest in tracking how these available funds translate into actual investments, as investment activity in Q4 of 2023 is expected to be a strong indicator of the VC landscape for 2024.
India took center stage at Expand North Star 2023, hosting the largest gathering of Indian startups outside of India. As economic ties between India and the UAE continue to strengthen, there is growing interest among Indian tech giants in the UAE’s burgeoning digital economy. A panel of highly successful entrepreneurs of Indian origin discussed the evolving India-UAE relationship and what it means for startups. They also explored the next logical steps for subcontinent startups looking to establish a presence in the Arab world’s second-largest economy.
During the discussion, which featured Rohit Chennamaneni, Founder of Darwinbox; Abhiraj Singh Bhal, Co-Founder & CEO of Urban Company; Amit Zutshi, Founder and Managing Partner of Morphosis Venture Capital Limited; and Ramakant Sharma, Founder of LivSpace, the panel emphasized the importance of scaling across borders. They recommended that B2B companies, particularly in enterprise technology, should aim for a minimum base revenue of $50 million before contemplating international expansion. Establishing a strong presence and navigating renewal cycles are crucial for achieving genuine product-market fit, especially in the enterprise technology space.
The expert panelists highlighted the effectiveness of physical presence and local expertise tailored to the specific context of the region in gaining a competitive advantage. While the core principles of B2C businesses should remain consistent, other factors such as services, operating models, and initial go-to-market strategies should be adapted to the target market.
The Expand North Star event, hosted by the Dubai Chamber of Digital Economy and organized by the Dubai World Trade Centre (DWTC), celebrated its largest-ever edition in 2023. Taking place at the new Dubai Harbour venue from October 15th to 18th, the event brought together over 1,800 startups from more than 100 countries as part of GITEX Global and Expand North Star. Notably, more than 1,000 investors, collectively managing over US$1 trillion, gathered in Dubai, solidifying the city’s emergence as the epicenter of the global digital economy.
