Middle East based STEP Group has closed its Series A funding round with a USD 2 million investment from regional investors including Wamda Capital, Equitrust and Dubai Silicon Oasis Authority, and international VC firm North Base Media, which focuses exclusively on media investments. The deal highlights the growth and potential of new media in the Middle East as access grows to a wider variety of media and demand increases, in particular, for Arabic-language content.
In just under 18 months, STEP Group’s news and digital content platforms stepfeed.com and yallafeed.com have gained more than three million unique monthly users and six million monthly views. Most recently the group acquired the popular and fast growing video content platform Arab Vines.
STEP Group also owns STEP Conference, a technology and startup conference in the MENA region, that has tripled in size every year since it began in 2012. This year sees the fifth edition of the event take place in April, with a broadening of its focus to include the launch of STEP Music – a conference and festival highlighting the development of the regional music industry.
“We identified a growing gap between Arab millennials and the mainstream media, and saw the need to bridge this with a dynamic new media platform. The growth strategy for STEP Group is ambitious and this investment will help us. We aim to more than quadruple the user base across our platforms within the next 12 months to reach more than 10 million users and 30+ million monthly views, and further develop our recently launched STEP Video capability,” STEP Group Co-Founder & CEO Ray Dargham.
According to the latest research study on media use in the Middle East conducted annually by Northwestern University in Qatar, demand for entertainment media in Arabic continues to accelerate while consumption of English media remains lower, and in some countries, is declining. Large majorities of nationals across the Middle East access the internet in Arabic – from 99 percent in Egypt, Saudi Arabia and the UAE, to 94 percent in Qatar, 81 percent in Lebanon, and 68 percent in Tunisia. Comedy, news and music were the three favorite online video genres in 2016.
“Young Arabs are hungry for content that relates to them. They are in real need of a voice that represents them, and our platforms speak to the needs, aspirations and dreams of the region’s most active generation. Our aim is to impact the millions of Arab millennials and Generation Z by building the #1 modern and tech powered new media company in MENA,” added Mr Dargham.
Khaled Talhouni of Wamda Capital, highlighted the investment opportunity represented by STEP Group. He said, “STEP Group has recognized and taken ownership of a sector that is realizing significant growth already. This investment comes as part of Wamda Capital’s thesis of investing in unique and emerging regional digital assets that are founded and managed by extraordinary entrepreneurs. Our partnership with STEP is strategic and we will be leveraging the wider Wamda Platform in realizing the company’s potential.
STEP Group represents the first investment in the Middle East for North Base Media, an investment firm focused on media, journalistic enterprise and digital-driven opportunities in growth markets around the world. Turi Munthe of North Base Media said, “We look all over the world for the best media entrepreneurs in the most exciting markets. STEP Group is just that – they are an exceptional team with an exceptional opportunity. We love working with them.”
“DSOA is committed to enabling entrepreneurs and encouraging talent by providing financial support, consultancy, and office space, as well as other services that contribute to boosting this vital sector. Our investment in STEP Group and support for the entity from its early days is a testament to our mission of promoting innovative startups and fostering entrepreneurship in the UAE. We have witnessed how the team has grown the business beyond the conference. Today, STEP Group is a fast-growing tech-fueled media company that offers digital content platforms specifically addressing the Arabic-speaking audience,” commented William Chappell, Chief Financial Officer at Dubai Silicon Oasis Authority.
