Amazon’s deal to acquire Dubai-based Souq.com, the e-commerce platform, is expected to fuel more investments and growth in the region’s technology sector and into start-ups, according to the co-founder of Souq.com.
Ronaldo Mouchawer, who is also the chief executive officer of Souq.com, said he expected to see a lot more deals and lot more competition in the region’s technology and e-commerce space in the coming years especially amid a growing focus by governments on economic diversification.
“In the last two years, the region changed drastically. The amount of inflow that has happened in the past two months is maybe in total more than what has happened over the past three years, so there is acceleration and this is good news for us,” he said.
His comments follow two large deals in the past two months; Amazon’s acquisition of Souq.com in late March, and Noon.com’s acquisition of Jado Pado earlier this month. Both deals were for undisclosed amounts, though estimates have put the Amazon-Souq.com deal at around $650 million.
Mouchawer said he is seeing more investments into start-ups and more entrepreneurs launching businesses in the region, and that is helping boost the ecosystem in the Middle East.
“I believe this (start-ups) is a good source for employment and for jobs in the years to come. This is the type of ecosystem our region needs, and investment into the sector will go a long way to create the type of industry and companies that we need,” he said.
Mouchawer added, “I believe we’re still far from having a proper tech ecosystem in the region, but I think the nucleus is there, and we need to embrace it because, really, this is the only way for us to breakthrough and be non-dependent on oil.”
Speaking on Tuesday at the Start-up India Summit in Dubai, the Souq.com CEO declined to answer any questions on the Amazon-Souq deal as speculations still float on the Souq’s integration with Amazon.
Asked about his plans post the deal, he said: “We feel the ecosystem in e-commerce is still 2 per cent of [all sales], so there’s a huge growth opportunity. I will be working with the Amazon team to make sure the integration and other plans for the region are executed well, and we’re excited for the next phase to see growth in e-commerce.”
The Start-up Summit event, which will (also) be held in Abu Dhabi on Wednesday, aims to bring together start-ups from India with venture capitalists and investors from the UAE. India is currently the third largest start-up ecosystem in the world, following the US and the UK, with expectations for the Indian start-up scene to grow to become the second largest in the world, fuelled by a consumption-led economy.