In June, MENA startups raised 75.6 percent of their capital in the agritech, proptech, and fintech sectors. In addition, the popularity of fitness and nutrition apps has also resulted in a significant investment in health-tech startups.
Startups in the MENA countries raised US$ 323.7 million across 66 deals in June 2022, an 84 percent increase in value and a 57 percent increase in deal volume month-on-month, according to a report released by Wamda and Digital Digest.
There was an increase in deal volume due to the graduation of three cohorts from accelerator programs.
UAE-based startups
UAE-based startups raised US$ 278.8 million in 16 transactions, or 86 percent of the total MENA investments in June 2022.
Early-stage companies led the deal count, as they have for the past few months. Still, the overall funding value was primarily driven by late-stage and high-growth firms such as UAE-based agritech Pureharvest, whose US$ 180.5 million round accounted for only 55.7 percent of the funding value. Pureharvest is a high-growth company.
The report titled: “June 2022 Investments in MENA” added that Pureharvest quickly elevated the UAE to the top of the heap.
UAE-based Vamstar received a US$ 14 million round of financing and was the largest recipient of funding in the health-tech sector.
Lebanon attracts strong investments
A total of US$ 18 million, led by the International Finance Corporation (IFC), March Holdings, and B&Y Ventures, helped Lebanon break through the top three for the first time.
Lebanon ranked second after UAE in the total amount of MENA investments.
Egypt came in third with US$ 8.6 million raised across 15 deals, followed closely by Tunisia with US$ 8.5 million raised across nine deals.
The four countries together (UAE, Lebanon, Egypt, and Tunisia) accounted for 97 percent of the total funding value. While Saudi Arabia, Qatar, Palestine, and Morocco startups secured the remaining US$ 9.5 million.
MENA startups
In May 2022, startups in the Middle East and North Africa region raised US$ 176 million across 42 deals, a decrease of 40 percent month-on-month investment value but a 62.7 percent increase year-on-year.
Despite a decrease in funding value, a 31 percent increase in the number of deals compared to the previous month.
Egyptian startups raised US$ 81 million across 11 deals, and Paymob took first place with US$ 50 million. Series B round led by Kora Capital, PayPal Ventures, and Clay Point, Egypt-based startups, led in terms of deal value and volume. Overall, the amount of money invested in Egyptian startups increased by 135 percent from the previous year.
At the same time, Fintech Hyperpay’s US$ 36.7 million round led by Mastercard helped Saudi Arabian startups raise US$ 46 million across nine deals. In comparison, UAE startups raised only US$ 45 million across eight deals, putting them in second place.
14.7% decrease from Q1
MENA startups raised US$ 796.7 million in the year’s second quarter, a decrease of 14.7 percent from the previous quarter but a 56 percent increase from the first quarter of 2021.
In the first half of this year, 354 deals raised US$ 1.73 bn, pushing the total to US$ 1.73 bn. The deal number also decreased by 36 percent from the previous quarter and increased by 12 percent over the same period last year.
Fintech and e-commerce were the second quarter’s most sought-after industry segments.