Philip Bahoshy: The Man Behind MAGNiTT – A Data-Driven Visionary

As the Middle East and Africa continue to see a surge in startup investments, one man has made it his mission to ensure that data is at the forefront of these decisions.

Meet Philip Bahoshy, the founder and CEO of MAGNiTT, the largest verified investment data platform for entrepreneurs, investors, corporations, and governments in the region. With Iraqi origins and a childhood spent in theUK, Bahoshy has called the United Arab Emirates his home for the past 13 years. And it's from there that he's spearheaded the creation of MAGNiTT, a comprehensive enterprise software-as-a-service (SaaS) platform that focuses on startup venture investments in the Middle East, Africa, Pakistan, and Turkey.

But his journey to success was not without its challenges, as he learned firsthand when he attempted to start his first venture fresh out of INSEAD with an MBA in hand.

“I’ve always been entrepreneurial in spirit and was always interested in starting my own business. The timing after getting my MBA felt just right, and I knew it was now or never. My initial goal was to create a platform to connect MBA students pursuing entrepreneurship with angel investors from the alumni networks. From there it went through many pivots and changes, and MAGNiTT’s original model was something like a Tinder for startups.It was to connect startups with investors and vice-versa.”

Now, as the driving force behind MAGNiTT, Bahoshy is working to democratize startup investment and make data-driven decisions accessible to all through the largest verified investment data platform in the region.

But for Bahoshy, the platform is more than just any old database, he earnestly explains. MAGNiTT specializes in emerging venture markets, where the venture capital ecosystem is still in its early stages of development. This focus on nascent and growing economies sets the platform apart from its competitors. With coverage across Africa, Middle East, Pakistan, and Turkey, and plans to expand to South East Asia soon, MAGNiTT provides clients with valuable insights derived from personally verified data on funded startups, all of which are analyzed using a unique methodology by MAGNiTT’s data team.

In an exclusive interview with Machinelab Ventures, Bahoshy candidly speaks about current trends in the region’s startup ecosystem, what the future holds for fledgling and existing startups, the importance of humility in business and much more…

What are some of the key challenges you face in collecting and analyzing venture data in emerging markets, and how does MAGNiTT overcome these challenges?

We live in an opaque environment for data access. Core to our values is data transparency, accuracy, and reliability for our clients. As such, we developed a very strict methodology for data verification that is included in our reports. This has allowed us to continue to benchmark the performance of investors, and the success of countries and to chart startups’ investment growth and trajectories. As we continue to expand across continents, including South East Asia, getting this balance right is key to our success and differentiation from our competitors.  

Can you discuss some of the trends you're seeing in terms of funding and investment in the region?

After the record start of 2021 we are now seeing continued declines in Venture Capital funding across the wider region, and within each country, mirroring global trends. Where we see opportunities, they are largely driven by Government initiatives within specific countries. 

At the start of the year, I had penned down my predictions in an article for MAGNiTT. Some of the predictions my article touched upon are:

1. Early Stage Rounds will Act as a Sweet Spot: With the normalization of valuations, we expect an increase in the deal flow towards startups raising SEED rounds or early Series A as the sweet spot for potential investment.

2. Increased Interest from Asia: Due to an increase in global appetite towards MENA-based startups and potential M&A opportunities here, we can see a larger proportion of investors in EVM startups attributed to South East Asia.

3. Increase in Exits: There are ample opportunities for international startups, regional corporates, and well-capitalized companies from the region to acquire promising startups from across different regions to achieve scale. We think this could result in more exits and acquisitions from across EVMs in 2023 than ever before.

What do you think the future holds for the startup ecosystem in the MENA region?

While we are going through turbulent times, we are bullish on the Middle East startup ecosystem in the long-run. There has never been more interest in innovation and technology than we are seeing now. Success breeds success. The more exits that come to fruition the more we are likely to see founders and entrepreneurs inspired to start new companies. 

Most importantly, we anticipate seeing increased investor interest in MENA’s startup ecosystem, from global markets and particularly South East Asia in the coming period. 

An increase in appetite from global investors, seeing more and more early-stage startups maturing and raising later-stage rounds, and of course a consistent incline in M&A activities in the region signal that MENA’s ecosystem is growing and much more is to come!

What is the most important lesson you've learned as an entrepreneur and how has it influenced your leadership style?

Some of the most important lessons I have picked up came from some of the hardest moments in my entrepreneurial journey. You have to be ambitious when setting goals, but also be nimble enough to pivot when challenges arise unexpectedly. And always be humble, when listening to others and their advice or comments, especially your customers. You may have a different point of view, but never be defensive. On a different but relevant note, a company is only as good as the bonds the team can collectively develop. At MAGNiTT, our core values are around ambition, working as a team, and leading to become the reference while always listening to our customers. I’m glad to have found such ambitious, talented, and driven individuals who believe in MAGNiTT’s mission and are driving the company forward. 

As someone with roots in the UK and Iraq, how have your cultural experiences influenced your approach to building and scaling a business in emerging markets?

On my first day in INSEAD, our Dean pointed out that the most common characteristic of various successful CEOs in Fortune 500 companies was that they lived and/or worked in three countries for a while. He then stated that the skills they learned to adapt through living across different cultures were essential to their personal and professional development. 

I think this truly resonated with me because where my roots are from, where I was raised, and where I have studied, are all in different regions of the world, and this experience has helped me in understanding cultural differences and embracing these differences while working. 

Can you speak to some of the unique opportunities and challenges that arise when building and scaling a business in the Middle East and North Africa region?

These can be categorized into the areas of primarily; talent acquisition and depth, scaling across multiple geographies, and access to funding.

Companies are only as good as the teams they are building. Awareness of what it takes to work for a startup, while better now than it ever has been, is a mindset that takes time to develop. As you scale and become larger, you need specific skill-sets that are harder to acquire in the region, in turn looking outside the region for higher costs. This remains a key pain point for many scaling startups in the Middle East.

The MENA region is a fragmented market across multiple geographies, each of which has different demographics, purchasing power, regulation, and licensing requirements. To get to scale, many startups, despite access to funds, need to navigate the intricacies of each of these markets, very different from a company in the US or other more mature markets. Finally, while funding has reached record levels in the region, specifically at a late stage, access to funding remains a challenge for any startups looking to scale in the region, especially in these challenging venture and economic times. 

As someone who is passionate about cross-pollinating entrepreneurship ecosystems, can you discuss some of the initiatives or partnerships that MAGNiTT has established to help foster innovation and entrepreneurship in emerging markets?

Information transparency is key to awareness. As we continue to scale into each and every geography, MAGNiTT focuses on highlighting content and research from our data to breakdown barriers of knowledge for stakeholders. This was particularly successful as we entered Pakistan and Turkey, seeing the cross-pollination of interest from the government, investors, and founders in each other's ecosystem. We look to further develop this knowledge across Sub-Saharan Africa while looking to replicate this across South East Asia as we scale there later this year. 

What advice do you have for investors looking to invest in emerging markets, and how can they best leverage platforms like MAGNiTT to identify and connect with promising startups?

Our platform currently holds over 25,000 startup profiles that investors can search by geography, industry, stage, date of last round, and more. On these profiles, investors can also review details such as funding history, and estimated valuation and get contact details of the founders. Our clients heavily rely on the platform to conduct soft due diligence, benchmark themselves against other investors in their regions and stages, and identify trends including deal size analysis and market sizing.

What advice do you have for entrepreneurs looking to start a business in the MENA region?

I always advise founders to be ambitious and audacious. Be brave in setting goals but be humble in listening to others, especially customers. At the end of the day, you are building your product for your customers. Keep going back to your customers to understand their needs and wants, and keep building exactly that. Also, be brave insetting your goals, be nimble in achieving them, and be humble when constructive feedback knocks on your door!