The Middle East and North Africa (MENA) region witnessed $250 million in venture funding across 78 deals in the third quarter of this year, a 32% rise in funding amount over the previous quarter, a report showed Monday.
Saudi Arabia and the UAE led the region in capital raised in the third quarter, with the kingdom posting a 172% quarter-on-quarter rise, according to a report released by startup data platform MAGNiTT. The UAE registered a 55% surge in new funding in the third quarter.
In terms of number of transactions, the UAE recorded the most activity, capturing a third of all deals closed in the MENA region for the first nine months of 2023.
Egypt witnessed the sharpest fall, with a 70% year-on-year plunge in number of transactions in the first nine months. The trend in the MENA region for the first nine months is in line with global trends, as venture funding across the globe fell by 42% year-on-year during the period.
Also, as many as 44% of all deals during the January-September period were for investments below $1 million due to a cautious approach from investors in favoring small-sized deals. This is against the 80% of all investments in this bracket in 2019 and 36% in 2022. Early-stage seed rounds in the region witnessed a 28% rise in average valuations during the nine-month period. Despite fintech and e-commerce maintaining their top positions, MENA’s top five industries saw a 50% year-on-year drop in total number of deals in the first nine months.
$1.4 billion. That is the total venture funding in the MENA region for the first nine months of 2023 across 286 deals, which plunged by 44% in funding amount.
“Investment activity has remained flat, with investors focusing on early-stage bets. On the positive side, we have seen multiple fund announcements,” MAGNiTT CEO Philip Bahoshy said in a statement.
“In MENA, UAE’s Chimera Capital and Aliph Capital have launched new funds, and in KSA (Saudi Arabia) IMPACT46 and KAUST have raised funds to deploy in local startups.”
