Egypt remains most active VC market in MENA in H1 2020

SOURCE: Enterprise

Egypt remained the most active venture capital market in MENA during H1 2020 with 25% of all transactions in the region, according to the H1 2020 update to MAGNiTT's MENA Venture Investment Report. Egypt’s share remained unchanged from the startup platform’s full-year 2019 data, but edged up 2% from data collected during the first half of last year. The UAE, which ceded the top spot to Egypt in 2019 after seeing its share of the number of transactions fall 3%, regained some of this momentum in 1H2020 and is now tied with Egypt at 25%. Saudi Arabia came in third with an 18% share, followed by Oman (12%), and Jordan (6%). MENA startups inked 251 agreements for funding in 1H2020, down 8% by volume.

The UAE remains the top destination for venture funding with 59% of the total, while Egypt followed with 19% (up 7% from 2019). Egypt and Saudi Arabia were the only countries in the region to see an increase in total investment landed.

Overall, funding to MENA startups surged 35% y-o-y during the first half of the year to USD 659M due to a strong performance during 1Q — 95% of the funding secured in the whole of 2019. When governments started imposing covid-19 lockdown measures in March, the level of funding dropped off substantially, falling 32% in 2Q compared to 1Q.

Vezeeta was the only Egyptian company to break the top five in value raised in H1 2020. The healthcare outfit made it to third place on the league table on the strength of the USD 40M series D round it closed in February. Two UAE-based companies topped the list: Emerging Markets Property Group (EMPG), which raised USD 150M in corporate stage funding, and cloud kitchen platform Kitopi, which secured USD 60M in a Series B round.

Fintech is the most active industry, but real estate lands the cash: Fintech continued to come out on top as the most active startup space with the highest number of agreements, accounting for 16% of total transactions. E-commerce, with a 14% share, and delivery and transport, with 10% rounded up the top three. When measured by funding value, however, real estate takes the lead with 24% of the share of total funding, followed by e-commerce at 22%.

Despite the current crisis, H1 2020 has seen $659M invested in MENA-based startups, which is already 95% of total funding full-year 2019. Discover more data, including country and industry trends by purchasing our H1 2020 MENA Venture Investment Report