Cairo 19 Jun 2024:
I have great admiration for the staffing industry, seeing it as an important player to reduce unemployment and an opportunity to enhance blue colour labours rights, needless to mention huge potential to integrate with various Fintech services.
The staffing services is when you as a corporate small or big need to hire, you go to a staffing company that will analyse your HR needs, provide you with CVs, facilitate any interview, help you onboard selected staff, even bringing them from outside country with all visa requirements, usually the staffing provider will handle all salaries, transportation and health insurance logistics, so you as a corporate can focus on your core competency and outsourcing all your personnel logistics needs to a staffing company, imagine the Fintech potential for electronic salary payment, access to un earned wage services, remittance services, loans to families against expected salary, insurance and many other services.
The staffing and recruitment industry has expanded significantly over the years and now has a market size of approximately $28.5 billion, with an annualized growth rate of 5.3%, according to data from IBISWorld, but how much of that pie is in the ME is not known exactly, but we are talking about a region specially GCC that is responsible of USD 25.77 billion outward remittance In 2000, but this figure became USD 134 billion in 2021 making the region the outright number 1 for outward remittances, so it is a region that is actually major consumer of expat that is full of potential for staffing business.
This creates lots of opportunities for investing in staffing players in GCC, and obviously capital markets were aware of that, in Saudi alone there was three IPOs listing for staffing companies, Mahara, Mowared and Samasco, all three are staffing companies witnessing IPO, all three saw there shares goes over 60% after IPO, Samasco was listed few days ago and share going up 24% first day, needles to say at very healthy valuation exceeding 20 PE.
Kuwait also is trying to follow with also an obvious big potential, as Beyout Investment Group just hitting the market with IPO, the first in Kuwait in 2 years, Beyout provide employment opportunities to over 12 nationals, total served staff exceeds 8,000, serving various industries in government, oil, telecom and healthcare, Beyout shares offered at expected PE below 13, which is quiet attractive relative to the similar companies valuation in Saudi.
With most investors eyeing Saudi Arabia, Kuwait could be a forgotten opportunity, valuation is less than Saudi but also Fintech competition when it comes to integrating with staffing companies seems less.
By: Malek Sultan
Co Founder: DisrupTech Ventures
