2017 #StateofMENAFunding Report

2017 #StateofMENAFunding Report

By MAGNiTT
Posted 6 years ago - Dec 31, 2017, 7:38 AM
Funding

 

MAGNiTT’s 2017 State of MENA Funding report shows a record year in number of startup investments and total funding!

 

  • Last year saw $560m investment made in 260 startup investments across the MENA region
  • Stripping out deals in Careem & Souq.com, 2017 was a record year, up 65% from 2016
  • 2017 saw more investment transactions than any previous year into MENA startups
  • E-commerce and FinTech remain the most popular industries accounting for 11.9% each
  • The top 10 deals in 2017 accounted for $349m, equating to roughly 60% of the total $560m
  • The UAE continues to see the majority of activity accounting for 70% of investments, while KSA saw the largest increase in deal transactions, up 4% from 2016

 

(Dubai, United Arab Emirates) January 16th, 2017 – 2017 proved to be a record year for the MENA startup ecosystem, continuing its signs of maturity and growth. MAGNiTT’s annual State of MENA funding, which looks at MENA specific investments, highlighted $560m of investment made in 260 MENA startups.

 

Key takeaways from MAGNiTT’s 2017 MENA State of Funding include:

 

1.      Funding Overview: A record Q4 in terms of investment amount and startup deals saw a strong finish to 2017. With the 2017 MENA State of Funding focused purely on MENA based startups, not including Turkey or Iran, MAGNiTT data highlights:

 

  • Last year saw a 65% rise in investments to $410M (excl. Souq & Careem), which is a MENA record
  • More deals were undertaken in 2017 than in any previous year across the MENA ecosystem
  • 2017 saw a record Q2, Q3 and Q4 in terms of investment amounts and number of transactions
  • Top 10 investments accounted for $349m, which accounted for roughly 60% of 2017 funding
  • Top 5 investments included $150m in Careem, $90m in StarzPlay Arabia, $41m in Fetchr, $20m in Paytabs and $12 in Wego

 

MAGNiTT’s founder, Philip Bahoshy, noted “it was a great year for MENA startups, founders and investors across the board. Investment continues to grow at all stages across the funding cycle.” With regards to overall trends he noted that “2017 broke the record for number of deals and amount invested, when removing investments in Careem and Souq. This is positive news and should provide confidence across the market heading into 2018. We expect to see a continuation of this trend throughout the year.”

 

2. Investment Breakdown: MAGNiTT investigated the breakdown of industries and geographies comparing 2017 to the previous year:

 

  • Last year saw E-commerce and Fintech maintain their positions at the top of the investment deal flow, both accounting for 11.9% of all deals.
  • Food and Beverage saw the largest increase of 3% in deal flow across 2017.
  • FinTech startups also make up 3 of the 10 largest investments in 2017 - Paytabs ($20m), Souqalmal ($10m) and Wahed ($7m). Logistics and Transport also proved big winners with Careem ($150m) and Fetchr ($45m)
  • The UAE continues to be the dominant market with 70% of all investment amounts and 37% of transaction (excluding CAREEM’s investment of $150m).
  • Notably, KSA observed the largest increase in investments, up 4% from 2016, despite a 3% fall in the number of deals.
  • Lebanese startups saw the biggest drop in investment amount, down 12% from 2016.
  • Kuwait saw the biggest increase in deal transactions, up 3% from 2016.

 

In the 2017 report, MAGNiTT noted that as part of their calculations this year, they removed investments made in Turkish and Iranian startup, focusing purely on MENA countries. MAGNiTT looks to expand their proposition with further reports to be published in the coming months for additional geographies as the platform expands.

 

3. VC activity and Exits: 2017 saw both the continued activity of existing household investment institutions, as well as the emergence of new players into the MENA startup scene:

 

  • 500 Startups, following the launch of their MENA Falcon Fund, was the most active VC by number of deals, deploying investments in over 30 startups across the region. This was followed by Middle East Venture Partners with 14 deals, who also announced the launch of their new $250m MEVF III fund in 2017
  • KSA Funding Institutions came to the forefront with RAED Ventures (8), Saudi Aramco Ventures (WA’ED) (8), Riyad Taqnia Fund (5) and Vision Ventures (3) actively investing across the MENA landscape
  • Looking at the top 10 investments, established VCs made notable participations with BECO Capital investing in 4 of the largest deals followed by Middle East Venture Partners in 3.
  • There was no slowing down in exits in 2017 which saw 20+ deals including the landmark acquisition of Souq.com by Amazon, the 51% acquisition of Namshi by Emaar Malls, as well as Delivery Hero’s acquisition of Carriage.

 

Bahoshy added: “It has been great to see the emergence of new investors both regional and international into the startup arena, providing much needed capital injection to the region. We have even seen greater participation by family offices, individual Angels and Corporates, many of whom look to launch accelerators and incubators in 2017 as well as make Corporate Venture investments”.

 

2017 sets the benchmark for the region, and Bahoshy is confident that in 2018, we will continue to see many of these records broken. “We anticipate existing VC’s to deploy new capital from freshly raised funds, we anticipate the continued emergence of new institutional players across the region and we foresee government and regulators continue to actively facilitate and promote innovation initiatives across the region”.

 

On MAGNiTT, he also noted “2018 is a big year for our platform. Accuracy of data is core to our proposition. MAGNiTT will continue to develop strong relationships with Investors and the ecosystem to ensure the information stays up to date and available. We are pleased to compliment this infographic with a detailed and in depth version of this report including analytics and insights made available for paid subscribers as well looking forward to launch of a new site later this month which will provide the tools and functionality to support users in the ecosystem.”

Next week, MAGNiTT will be releasing a detailed 35+ page detailed report on MENA Investments. Click HERE or below to learn more details how to access the full report.

 

Funding