Startups in MENA
The decline in deal activity can also be attributed to the region’s economic challenges as the pandemic continues to weigh on the economies. This means investors are being more cautious when placing capital as they weigh the risks against the potential rewards.
Startups in the Middle East and North Africa (Mena) region raised $247 million in 67 deals in March 2023, down 67% from the previous month (m/m) and down 17% from a year ago. Saudi Arabia was the top destination for startup investment last month, receiving more than half of the region’s total deal value with $175 million in 20 deals. The growth was largely due to the $150 million raised by buy now, pay later (BNPL) startup Tamara in a round of debt financing from Goldman Sachs, which itself represented 64% of the total financing value recorded last month.
The UAE came in second with $59 million raised in 18 deals. Notable deals include a $25 million Qlub seed round and a $15 million COFE round led by Wa’ed Ventures, as well as a $10 million Pre-Series C Almentor round. Bahrain, Kuwait and Morocco are ranked third, fourth and fifth, respectively.
Despite the decline in overall deal activity, total funding exceeded the $1.1 billion mark in the first quarter, a positive sign for the region’s startup ecosystem. The continued growth in early-stage investments shows that the region is still attractive to venture capital and that entrepreneurs in the MENA region can still access the capital they need to grow their businesses. MENA startups raised $760 million in February 2023.