MENA Venture Capital Ecosystem Sees 33% Increase in Investor Numbers
The latest data from venture data platform MAGNiTT reveals a significant annual increase of 33 percent in investor numbers in the Middle East and North Africa’s venture capital ecosystem during the first half of 2024.
Surge in Funds Launched Despite Drop in Funding
Despite the positive trend in investor numbers, funding for regional startups experienced a 34 percent drop, totaling $768 million. However, sentiment in the MENA region led to a remarkable 130 percent increase in the number of funds launched during this period.
Shifts in Sector Funding and Investor Activity
E-commerce emerged as the most funded sector with $244 million, while fintech dominated in terms of deal count. The Public Investment Fund’s Sanabil Investments stood out as the most active investor, deploying $57 million in capital.
Top Markets and Deal Counts
Saudi startups secured the highest funding in the first half with $412 million, followed by the UAE with $225 million and Egypt with $86 million. The UAE led in deal count with 83 transactions, followed by Saudi Arabia, Egypt, Morocco, and Bahrain.
Expectations for the Second Half of 2024
CEO of MAGNiTT, Philip Bahoshy, anticipates an uptick in VC activity in the second half of the year. He highlighted the importance of political stability, interest rate declines, and events promoting opportunities in the region for continued growth.
Outlook for UAE and Egypt Ecosystems
Bahoshy emphasized the positive growth in transactions in the UAE and projected it to remain a leading ecosystem attracting international companies. In contrast, Egypt faces challenges in capital deployment, with startups relocating to other regions for funding.
Strength in UAE and Saudi Arabia Ecosystems
Despite the slowdown in the venture and macroeconomic environment, Bahoshy believes that both the UAE and Saudi Arabia are well-positioned to maintain strength in their ecosystems. The future looks promising for continued growth in the MENA venture capital landscape.