Main Takeaways from MENA’s Funding Scene
In the first nine months of 2024, total funding in the region’s venture capital market dropped by 13% compared to last year, reaching $1.3 billion. However, smaller funding rounds under $100 million grew by 7%, thanks to Seed and Series A investments, according to a report by Dubai-based MAGNiTT in October 2024.
The number of deals fell by 6% compared to last year but stayed strong at 352 deals, performing better than other emerging markets like Africa, which saw a 42% drop, and Southeast Asia, with a 28% decline.
Among countries, Saudi Arabia led in funding, taking 39% of the region’s total, boosted by large deals like SaaS e-commerce startup Salla’s $130 million pre-IPO round in March 2024. The U.A.E. was the most active market, with deal numbers rising by 12% and making up 38% of all deals.
Egypt’s venture capital (VC) market showed growth in the first nine months of 2024, with funding for smaller deals increasing by 36% compared to last year, mainly due to the fintech sector’s activity.
In the MENA region, funding picked up in the second and third quarters, growing by 48% and 54% compared to the same periods last year. This growth was boosted by big deals like MNT-Halan, a fintech startup in Egypt, raising $157.5 million in July 2024.
There was also a rise in investor activity in MENA, with a 34% increase in unique investors, reaching 386. International investors played a bigger role, growing by 69% and making up 51% of all investors—the highest share in over five years. Investors from the U.S. and U.K. doubled their share of invested capital, focusing on early-stage deals.
Fintech was the top-funded industry in MENA, making up 37% of total funding. Smaller deals in the sector grew by 31% compared to last year, showing strong investor interest despite challenges in the market.
Governments in the MENA region have been key to creating a supportive environment for venture funds. They’ve introduced measures like tax breaks, free zones, and laws allowing full foreign ownership, which attract global investors, according to an October report by MAGNiTT. The U.A.E. and Saudi Arabia are leading the way with business-friendly laws, innovation hubs, and support for cross-border investments. Programs like startup visas and government-backed incubators are also helping to build a thriving startup ecosystem, drawing global attention to places like Abu Dhabi’s Hub71 and Dubai’s DIFC FinTech Hive. In October 2024, Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai, launched a digital platform aimed at supporting over 100,000 startups and entrepreneurs worldwide.
Sovereign wealth funds (SWFs) like Saudi Arabia’s Public Investment Fund and Abu Dhabi’s Mubadala Investment Company are also playing a big role. These funds provide large amounts of capital, supporting both local and international investments and enabling bigger deals. For example, in April 2024, ADQ and Oman Investment Authority launched the $180 million Jasoor Fund to invest in technology. In February 2024, Qatar Investment Authority announced plans for Qatar’s first VC Fund of Funds, which will invest over $1 billion in regional and international venture funds.
Published: 1st January 2025
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