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The UAE leads the MENA in financing venture capital

UAE companies raised $699 million in H1
The UAE leads the MENA in financing venture capital
The UAE also set a new record for half a year in investment exits

Companies in the UAE raised $699 million in the first half of 2022, making the UAE the leading venture capital fund country in the Middle East and North Africa (MENA), according to venture capital markets data platform Magnitt.

“Magnitt” said in a report today, that the UAE was also a leader in terms of deals, which grew by 10 percent in the six-month period compared to last year.

The UAE also hosted the biggest deal – a mega round of $181 million convertible notes for Abu Dhabi-based Pure Harvest in June, marking the tenth year in a row that the UAE has hosted a mega round, with funding of $100 million or more.

The UAE attracted more than $1.47 billion in venture capital in 2021.

Saudi Arabia and Egypt ranked second and third, respectively, in both financing and closed deals. The Kingdom attracted $584 million, a more than threefold increase from the first half of 2021, over 79 deals, while Egypt’s financing doubled to $307 million over 78 deals.

Investments in Bahrain increased eightfold to reach $116 million, ranking the country fourth, followed by Tunisia, which grew a third to $36 million. In terms of deals, the countries swapped places to maintain their ranking in the top five.

The report showed that the fintech industry led the funding raised in the first half, rising from second place a year ago. Investments more than tripled to reach $234 million.

Agriculture jumped four points to second place, with $181 million. In third and fourth places, fashion and lifestyle ($50 million) and healthcare ($50 million) grew. On the other hand, transportation and logistics fell from first place to fifth place, as financing declined by 40 percent to $40 million.

In terms of the number of deals, Fintech continues to lead with 28 deals, an increase of 65 percent over the previous period. E-commerce secured nine deals, transportation, and logistics eight deals, while education technology and healthcare signed five deals for each of them. Education technology deals jumped 150 percent.

Early-stage funding remained the trend in the UAE at 80%, a similar level compared to the previous four years. Series A rounds came with 11 percent, followed by Series B rounds with 8 percent.

“Magnitt” said that the UAE also set a new record for half a year in investment exits, as it recorded 10 cases in the first half of 2022, which represents more than a quarter of all exits announced in the MENA region during the six-month period.

More than half of the capital deployed in the UAE during the first half was concentrated in the top five deals of the year, compared to 77 percent in the corresponding period last year. Pure Harvest alone has raised more than a quarter of venture capital.

The report noted that financial technology, e-commerce, enterprise software, and real estate startups were among the most sought-after acquisitions in the UAE in the first half of 2022.