In an era when work dynamics are being redefined, it’s thrilling to be at the forefront of investing in innovations that not only adapt to these changes but also pave the way for a more inclusive and accessible global workforce. Today, we are excited to announce that we led the $5.5 million Series A round in RemotePass, a pioneering Middle Eastern remote work platform, marking a significant milestone in our journey in the Middle East.
This partnership is very dear to us on many fronts. It marks the final investment of our second fund, and at the same time, it is the largest investment we have made in the Middle East. We have poured our efforts into the region in the past two years, meeting 30+ investors, accelerators, and ecosystem players and interviewing 200+ companies. The team traveled frequently, joining multiple events and conferences. (If you follow Numan’s substack, you’ll see.) All of our encounters have led to meaningful and rich conversations. Finally, the harvest of our hard work (together with Flow48 that we announced previously) motivated us to go deeper with our commitment to the region. First, I want to discuss the region and our observations.
Regional Digitization and Infrastructure Enhancement
Over the past 18 months, we’ve observed an unwavering dedication to digitalization and infrastructure enhancement within the region. The Middle East has a young and tech-savvy population and is experiencing swift economic growth and urbanization. The GCC nations are persistently driving initiatives to shift their focus from oil to achieving their national visions, positioning themselves as significant contenders in the global business arena. With the support of their solid public finances and leadership, they are ambitiously pursuing targets for transformation in every aspect of their institutions, ranging from banking to healthcare, including a net-zero emissions goal.
This narrative has been persisting over the past few years. As the rest of the world rebounded from the pandemic, the GCC region experienced a delayed and dissipated impact compared to its Western counterparts, and they remained relatively insulated from the turbulence, navigating through these challenges. GCC countries prioritized entrepreneurship and technology transformation. They rapidly fired incentives for startups, SMEs, and businesses, established free trade zones, and business-friendly policies, as in institutions like Abu Dhabi’s ADGM and Dubai’s DIFC or Dubai Silicon Oasis. In turn, initiations of new substantial funds, as in the case of Qatar, followed.
UAE and KSA have been at the forefront of the movement. UAE is considered talent- and expat-friendly, and KSA presents an attractive market considering its 35M population. However, smaller but affluent countries like Qatar are unwilling to stay behind. That positively impacts wider MENA startups, who are particularly vulnerable to global and geopolitical turmoil. Now, they are relocating to GCC countries and accessing capital and more stability. On top of the infrastructural progress, incentives, relocation services, and development programs for startups have been established, including accelerators like HUB71 (backed by ADIA and Mubadala) and AstroLabs (founded by Namshi’s founders) or Saudi Unicorn Program (established by Misk Foundation and Saudi Communication and Information Technology Ministry). It supercharged the growth of the ecosystems in both countries. Dubai ranked 12th in emerging ecosystems, and Riyadh’s ecosystem value has increased substantially in the past year. The MENA region experienced 4x growth in total deployed capital since 2018. MENA’s share of funding across Emerging Venture Markets increased by 8% in 2023 alone. Although total funding declined by 23% in 2023 compared to the previous year, there is still momentum compared to other markets. The European ecosystem saw a decline of 40%, while the Türkiye ecosystem experienced a decline of 47%. (Visit Magnitt’s 2023 report to see more numbers.)
Optimistic Regional Prospects
The region has been building this momentum since the early 2010s when only a handful of VCs were based in the region. It has more than tripled in the past ten years, reaching 114 unique investors investing in Saudi Arabia only in 2023. Although the ecosystem is still in the infancy stage, the region has become home to well-established early-stage regional investors, nine unicorns, and the first examples of exit activity. Unicorns like Careem, Tamara, and Tabby influence excitement among all players as early success stories. We see these players forming their mafias, similar to those in Western ecosystems creating entrepreneurship flywheels. Acquisitions, such as the case of Souq (Amazon) and Careem (Uber), are presenting good strategies for global players entering the region that reinforce the sustainability of this flywheel. We believe there is more to come in the future.
We are optimistic about the region’s prospects in the coming years, as there is also a possibility of a resurgence in IPO influenced by stabilized interest rates and the availability of substantial funds. The UAE and KSA are likely to continue attracting startups with these developments and also with their strategic location. Neighboring Asia provides easy access to emerging markets such as India and Southeast Asia, which present high startup growth opportunities. We believe the region is well-positioned to produce success stories that expand from the Middle East to Asia and vice versa.
Entrepreneurial Culture Shift
In essence, the region has a cultural shift towards entrepreneurship, infrastructural development, untapped markets in proximity, and funding to support it. The next critical phase is to attract talent and experience. We believe that the region still needs experienced investors as well as operators. The proliferation of investors could bring tremendous value to the region in terms of stage and sectoral focus. We see missing links in B2B or growth stage space, which is right up 212’s alley.
Therefore, investing in RemotePass is an excellent testimonial of our thinking about the Middle East region. Talent is a very strategic asset for this leap. Solutions like RemotePass will further catalyze the development & mobility of talent in the region. With plans to expand into Saudi Arabia, the company strategically positions itself as a critical player in the evolving landscapes of the UAE and KSA, regions on the cusp of becoming global business hubs.
About RemotePass
RemotePass is an HR and Fintech platform streamlining the onboarding, payment, and management of contractors and employees in 150 countries. Through its innovative Super App, it focuses on underserved workers in emerging markets by offering tailored financial services and benefits, such as a USD Debit card and health insurance. This approach aims to redefine how remote work is supported financially and socially.
The platform enables businesses to tap into a broader talent pool across Africa, the Middle East, and India, democratizing access to global opportunities for these workers and offering companies invaluable diversity and talent richness.
We are proud to be part of this journey and are excited to see the transformative impact this platform will continue to have on the future of work. We believe in the power of technology to bridge gaps and in the spirit of entrepreneurs to envision and realize an inclusive, dynamic, and boundless future. Here’s to breaking new ground and building a world where everyone, regardless of location, can participate in the global economy.
Please visit the press release to hear more from the investors and founders about this round. More importantly, please visit remotepass.com if you want to hire globally and simultaneously provide an excellent experience to your remote workers!
For further reading:
Read the press release and Endeavor’s article about RemotePass.
Read the Year in Review 2023 article from Wamda.
Read the Saudi Ecosystem Report 2023 (Including Exits) from SVC.
Check out these Exits in the UAE.
Read the insights from STV on the MENA Tech Ecosystem.
Read the insights from DFDF.
