MENA Rhinos on the Charge Powering $50 Bn in Market Cap.pptx

The MENA region is quietly nurturing a unique breed of companies the Rhinos, which are set to create over $50 billion in market capitalization over the next five years. These Rhinos, characterized by $100 million+ valuations, a path to profitability, and steady 15%+ growth, are challenging two prevalent myths about the region: a scarcity of scaled, successful startups and limited access to growth capital. While the global focus has been on elusive unicorns, MENA Rhinos have emerged as the backbone of the region's digital economy, powering approximately 70% of it.



Contrary to perceptions of limited growth, MENA Rhinos are demonstrating remarkable efficiency in their journey to public markets. These companies are IPOing faster than their global counterparts, with an average of 8 years compared to 11 years for the rest of the world. This trend is expected to continue, with Digital Rhinos projected to account for over 30% of IPOs in the region over the next five years. Furthermore, consolidation is playing a crucial role in accelerating the path to IPO for many Rhinos. Sectors such as Retail, Logistics, and FoodTech are prime for M&A activity, with companies leveraging acquisitions to enhance Scale, Sustainability, and Stability. As a result of these dynamics, we expect that over 60 Rhinos will go public in the next five years, collectively contributing to the projected $50 billion+ market cap growth and further cementing their position as a significant force in the MENA economy.

1. Report July 2024 MENA Rhinos on the Charge: Powering $50 Bn in Market Cap

2. MENA Rhinos the region’s own breed of companies expected to create $ 50 Bn+ in market cap over the next 5 years MENA’s Rhinos have been the Backbone of our Digital Economy Digital Rhinos to account for 30% of the IPOs over the next 5 Yrs Consolidation to Short-Circuit the Path to IPO for Rhinos 1 2 3

3. MENA’s Rhinos have been the Backbone of our Digital Economy MENA’s Rhinos have been the Backbone of our Digital Economy Digital Rhinos to account for 30% of the IPOs over the next 5 Yrs Consolidation to Short-Circuit the Path to IPO for Rhinos 1 2 3

4. There are two popular myths about the MENA region Total Unicorns MENA vs Rest of the World, 2023 VC Deployment Share by Stage MENA vs Rest of the World, Average 2018-2022 Source(s): Redseer Analysis 1,357 6 Rest of the World MENA Due to MENA's low to global unicorns the region is believed to have a contribution scarcity of scaled, successful startups Furthermore, because of the region's growth capital share, being ~40% lower than the global average, there is a belief that there is limited access to growth capital 70-75% Rest of the World 40-45% MENA Growth Stage Early Stage Don’t we have till 2023?

5. However, while the world is chasing elusive unicorns, the region is quietly nurturing Rhinos Rhino’s Key Characteristics Descriptive 100+ Rhinos in MENA Momentum Giants Grounded and Sustainable Stable and Unstoppable $ 100 Mn+ Valuation Companies on their Path to Profitability Steady 15%+ Growth Source(s): Redseer Analysis

6. These Rhinos are IPOing faster and meeting funding gaps through public markets Average Time to IPO MENA vs Rest of the World Rest of the World MENA ~ 11 Years ~ 8 Years -3 Years Source(s): Redseer Analysis

7. These Rhino’s exist across sectors… Rhinos by Sector 2023 Retail Enablers Tech Digital Services Classifieds Source(s): Redseer Analysis

8. …and power ~70% of MENA’s Digital Economy Rhinos by Sector 2023 Rhino Contribution to Digital Economy 2023 Rhino Contribution to Digital Economy  70 % Source(s): Redseer Analysis Retail Enablers Tech Digital Services Classifieds

9. Digital Rhinos to account for 30% of the IPOs over the next 5 Yrs MENA’s Rhinos have been the Backbone of our Digital Economy Digital Rhinos to account for 30% of the IPOs over the next 5 Yrs Consolidation to Short-Circuit the Path to IPO for Rhinos 1 2 3

10. The r egion saw a surge in IPOs over last 5 years, with 2022 being a breakout year Number of IPO’s 2018-2023 2018 2019 2020 2021 2022 2023 # of IPOs IPO Proceeds 170+ IPOs ~$80Bn Proceeds Government IPOs $1 Bn Proceeds in each IPO Source(s): Redseer Analysis

11. We expect the momentum to continue, with Digital Rhino’s driving >30% of IPOs in the region MENA IPOs – Digital First Rhino vs Traditional Companies Split of # of IPOs, 2018-29 We expect to see ~60 IPOs of Digital First companies over next 4 years 2018 - 23 2024 - 29 Digital First Rhinos Traditional 182 200 Source(s): Redseer Analysis

12. Consolidation to further Short-Circuit the Path to IPO MENA’s Rhinos have been the Backbone of our Digital Economy Rhinos to Raise over $15 Bn over the next 5 Yrs Consolidation to Short-Circuit the Path to IPO for Rhinos 1 2 3

13. While some Rhinos are IPO Ready, the rest will leverage M&A to fill gaps across Readiness Pillars IPO Ready Rhinos Redseer IPO Readiness Index S S S Scalability Sustainability Stability 3S IPO Readiness Index 70 + IPO Ready Rhinos IPO Ready Rest ~ 30 M&A to help fill gaps and drive synergies Source(s): Redseer Analysis

14. Margin Expansion through Vertical Integration Top 5 Player Contribution to Logistics Top 3 Player Contribution to Retail Retail, Logistics and FoodTech are ripe for consolidation and expected to lead this M&A activity Retail will see market entry acquisitions to add Scale Logistics players to consolidate for Sustainability FoodTech to improve Stability through vertical integration Countries in Other Emerging Markets Countries in MENA Top 3
Contribution MENA Logistics Top 5 Contribution Fragmented longtail with 100+ players Source(s): Redseer Analysis

15. Rhino’s Market Cap In $ Bn, 2024-2029 Overall, over 60 Rhinos to IPO creating $ 50 Bn+ in market cap, over the next 5 years Rhinos to Create $ 50 Bn+ Of Market Cap Source(s): Redseer Analysis IPOs to Lookout for FinTech B2B/SaaS FoodTech Classifieds