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An Investor's Viewpoint: Here's What Entrepreneurs Should Look Out For In 2023 With all the signs pointing to a challenging year ahead, they are going to need to call on their innate resilience, and demonstrate creativity and resourcefulness as they navigate turbulent market conditions in the MENA, and globally.

By Noor Sweid

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Given that we have firmly bid goodbye to 2022 at this point in time, it is only natural to now start to ask what 2023 might offer. Entrepreneurs are, by their very nature, optimists, and this gives them resilience when things get tough. With all the signs pointing to a challenging year ahead, they are going to need to call on that resilience, and demonstrate creativity and resourcefulness as they navigate turbulent market conditions in the MENA, and globally.

The ability to remain impervious -a trend we've historically observed for the MENA- to what has been happening around the world cannot last forever. The predictions from the International Monetary Fund, Organisation for Economic Co-operation and Development, central banks, and government treasuries are all discouraging in the short- to medium-term, which is turning market sentiment inwards. Capital is, and will continue to be, more reluctant.

So, the squalls and thunder that are running through economies in Europe and the Americas will reach us eventually. While they may be later, they are likely to also last longer.

There will be change, and entrepreneurs need to be prepared and ready to act quickly to take advantages of the opportunities that arise, anticipate what their particular markets might be like, and what responses will be required.

Here are a few examples of what we can expect across MENA in 2023.

First, if we look at the trends that have permeated 2022, and ask ourselves which ones will intensify next year, we can tell where 2023 might take us. Using that approach tells us 2023 will see investors becoming more conservative, profit superseding growth at any cost, reduced liquidity, and increased incidence of down rounds.

We will also witness more M&A as the market consolidates. With an acceleration in acquisitive activity, the region's ecosystem will shift from being fragmented to becoming consolidated and synergistic. For some businesses, it could be the last resort to ensure their survival; for others, it is an opportunity to grow and scale. On the flip side, this should make for a stronger, more robust economy overall.

Related: Five Predictions For Fintech In 2023

The MENA is witnessing less volatility than other economies, but that cannot last forever, and it is likely that the impact from inflation and related recessionary pressures in other countries and regions will have a more significant influence in 2023. The supply of fresh and discouraging data is already impacting how investments are being driven, and this will continue. Investors are looking at protecting portfolios, and supporting their own positions by doubling down on winners. Businesses will have to hone in on cash management and preservation strategies, and demonstrate a clear and sustainable path to profitability.

Every business will face different challenges in 2023. Businesses may need to think lean to make their models more resilient and efficient for the future. This is second nature to emerging market entrepreneurs, as they already operate in environments with scarce capital, resources, and talent. Emerging market business models are inherently developed to survive adverse settings -the norm in these markets- and there are many lessons to be drawn upon, as the rest of the world navigates what is set to be a challenging year.

Consolidators will see acquisition opportunities, whereas others will be in survival mode. For startups, especially those seeking capital, they will need to demonstrate a clear path to profitable growth. Entrepreneurs should watch cash outflow very carefully, spending every penny wisely, and keeping credit control tight.

Other crucial tactics should be prioritizing customer loyalty. Most consumers and businesses will feel the squeeze, so continuing to deliver through the bad times -even in the modern era of fickle customers- goes a long way.

We will see compelling momentum behind investment opportunities and technology developments in resource efficiency: energy, water, food, and supply chains, particularly in emerging markets. The winning innovations of the next 5-10 years will focus on localizing technologies that ensure continuity and efficiency.

When we think about food security, agritech is very front of mind. An estimated 85% of food is imported in the region, creating opportunities for tech-enabled, data-driven solutions that build localized food production and capacity. We will also see technologies that future-proof supply chains gain significant momentum over the next few years, with the industry projected to top US$6 trillion by 2025.

Energy management will be another key theme. 750 million people in the world are without power, and 80% of those are in the Middle East and Africa- how do we go about solving that? Mini-grids and solar, perhaps. In any case, it is about real solutions, and not just thinking outside the box, because there is no box. In other words, in these deprived regions- there is no legacy system giving businesses the opportunity to leapfrog straight into digital models.

Given that we can see many of the challenges ahead as they work their way through other economies, businesses that have prepared for harder times will then be in a stronger position to exploit the exciting opportunities of the next 5-10 years.

Related: Braving The Funding Winter: A Game Plan For Entrepreneurs

Noor Sweid

Managing Partner, Global Ventures,

Noor Sweid is the Managing Partner of Global Ventures, the leading international venture capital firm in the UAE. Noor is passionate about enabling disruptive technology companies and their emerging market founders to solve real problems while changing the world with measurable impact.

Identified by Forbes magazine as one of the “World’s Top 50 Women in Tech," Noor's previous roles include CIO at The Dubai Future Foundation, and founder of ZenYoga studio chain (acquired by Cedarbridge). Furthermore, Noor was the first Arab woman to scale, IPO, and operate a public company in the MENA region, listing Depa on the NASDAQ Dubai and the London Stock Exchange (DEPA:DU) for US$1.1. billion in April 2008.

Noor holds bachelors’ degrees in finance and economics from Boston College as well as an MBA from MIT Sloan.

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