The UAE emerged as the best-funded startup ecosystem in the MENA region for the second month in a row with $146 million raised across 11 transactions, according to Wamda’s latest report. UAE-based eyewa and Lean Technologies led this startup funding growth by securing the largest ticket sizes, raising $100 million and $67.5 million, respectively.
Saudi Arabia’s startups raised the second highest amount, with 23 startups securing $94 million in funding. Meanwhile, Egypt ranked third, with eight startups successfully obtaining nearly $16 million, a significant increase from the $1.6 million last month. This growth is noteworthy, considering the ongoing geopolitical tensions at the borders of the North African nation, in addition to the persistent decline of its currency.
MENA startups raise $258 million
As the last quarter of 2024 comes to an end, tech startups in the MENA region demonstrated significant momentum, securing an impressive $258 million through 46 deals in November. That is a 92 percent increase month-on-month and a 196 percent down from the $764 million raised in the same month last year. However, when discounting the debt financing from the previous year’s total investment, the disparity will be reduced to 32 percent.
E-commerce leads startup funding
In terms of sector performance, e-commerce took the lead in startup funding, largely due to eyewa’s significant deal in the UAE, with seven startups in this space attracting $104 million in funding. This shift pushed fintech, which had been the top choice for investors for four months straight, into second place, raising $80 million across four startups.
The emerging leader of 2024 was software as a service (SaaS) providers, which attracted an investment totaling $21 million across seven funding rounds.
Series A startups attract the most investments
In November, later stages took center stage on MENA’s investment landscape, thanks to eyewa’s Series C round, Lean Technologies’ Series B, and Cipher’s $13.3 million pre-IPO funding.
Startups in the Series A stage attracted the majority of investment, securing $23 million through two deals. However, when considering the number of deals, pre-seed startups led the way, attracting around $5 million across 16 transactions.
Continuing the trend that emerged in 2024, the business-to-business (B2B) model last month was the leading recipient of funding, securing 48 percent of the overall investment. Meanwhile, only $11.5 million went to 12 business-to-consumer (B2C) startups, with the remaining funds going to eight startups operating in both domains.
November mirrored the overall trends of the year, with a significant share of investment going towards startups led by male founders, which constituted 90 percent of the overall investment. In contrast, female-led startups garnered only $583,000. However, it is noteworthy that startups co-founded by both male and female entrepreneurs secured $22.5 million.
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Startup funding trends
Startups in the MENA region raised $1.3 billion in the first nine months of the year, reflecting a 13 percent year-on-year decline, according to MAGNiTT. Fintech remained the top sector in MENA, attracting $480 million across 72 deals.
Among the region’s countries, the UAE, Saudi Arabia and Egypt stood out with the most growth in startup deal volumes. The UAE accounted for 38 percent of all MENA deals, recording a 12 percent rise in the number of transactions. Meanwhile, Saudi Arabia witnessed the second-largest growth with a 7 percent year-on-year increase in deals.
In the UAE, Abu Dhabi emerged as the fastest-growing startup ecosystem in the Middle East and North Africa (MENA) region, according to the 2024 Global Startup Ecosystem Report by Startup Genome and the Global Entrepreneurship Network. The report found that Abu Dhabi’s ecosystem value grew by 28 percent between July 2021 and December 2023, compared to the previous period.
Abu Dhabi’s ranking jumped 15 spots compared to the previous year, landing in the 61-70 group, with $284 million in total early-stage funding and $1.06 billion in total Venture Capital (VC) funding from 2019 to 2023.
