Grace Ashiru
The Middle East and North Africa (MENA) region experienced a remarkable surge in venture capital activity during May, signaling a strong recovery for the startup ecosystem. $445 million was invested in the region’s startups through 39 transactions, a significant jump from the mere $7 million raised across 11 acquisitions reported in April.
Comparing the figures to the previous year, there was an impressive 153% increase in deal volume. However, it’s worth noting that there was a slight decline of 7% in the number of deals made.
The United Arab Emirates (UAE) emerged as the leading player in the region, securing $422 million across 14 deals, which accounted for 90% of the total funding. A major boost came from Tabby, a BNLP startup, which raised a substantial $350 million in a loan round. Qatar also made its mark, with super-app Snoonu raising $12 million and claiming the second position for the first time. Saudi Arabia followed closely with $6 million raised through 15 deals. After deducting Tabby’s debt round, the total amount raised in the region amounted to $95 million, with the UAE contributing $71.6 million.
Regarding deal count, Saudi Arabia outshone other countries thanks to the graduation of seven domestic startups from the Flat6labs Riyadh accelerator program.
Fintech remained the top choice for venture capital funding, with and without considering Tabby’s round. E-commerce secured the second-highest funding, primarily driven by UAE-based company Squatwolf’s $30 million round. The sector climbed to third place thanks to the funding received by Snoonu.
A separate report by MAGNiTT revealed that the MENA startup ecosystem experienced a decline of 67% in funding during March 2023. The volatile market conditions during that period took a toll on deal making activities. However, the latest figures indicate a strong rebound, providing a positive outlook for the region’s startups.
Pre-seed and seed-stage startups continued to dominate the deal landscape, reaffirming their prominence in the ecosystem.
On a concerning note, a Wamda and Digital Digest report shed light on the gender disparity in startup funding. The report highlighted that 92.8% of investments went to startups with all-male founding teams, while only 7.2% were allocated to businesses with male and female founders. May witnessed only one female-founded startup, Chefaa, an Egyptian health tech firm, receiving funding through a $10,000 grant.
The MENA startup ecosystem’s performance in May showcases its resilience and potential for growth. However, $ efforts are still needed to address the gender imbalance and promote diversity within the region’s entrepreneurial landscape—$ 71.6 million.
