At the half-way mark: Fintech fights the one-startup trend

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We finished Q1 2021 with a rapidly growing Fintech industry and fluctuating investments into E-commerce startups across Emerging Venture Markets (MENA, Turkey & Pakistan). Halfway down the year, the trends have laid out explicitly as we at MAGNiTT use our proprietary data to follow the journey of startups across all industries. 

Our H1 2021 industry reports took a deep dive into how the five top industries fared in the half-year. These included Fintech, Food & Beverage, Delivery & Logistics, E-commerce, and Healthcare.

Three industries, Delivery & Logistics, F&B and Fintech, had a stellar H1 2021 as they recorded all-time high yearly, half-yearly and quarterly venture investments across EVMs. In fact, the Delivery & Logistics sector crossed the $1B mark to become the industry with the highest capital deployed in H1 2021. The F&B sector, too, hit half a billion dollars in investment in startups operating within the industry.

1. Record investments into three industries but Fintech made the strongest case

What clearly distinguished Fintech from the other two industries, however, was its uniform development across EVMs, the growth in deal flow and equitable distribution of capital. Turkey’s Getir drove the success of the D&L industry, having raised 90% of the sector’s funding across EVMs. Similarly, the F&B story was dominated by Kitopi’s mega deal which accounted for 83% of capital deployed in the sector across the analyzed geographies. In Fintech, however, the top five deals only raised 26% of total capital across MENAPT (MENA, Pakistan, Turkey).

Although a strong industry in MENA, the F&B sector saw only two deals closed in Turkey and none in Pakistan. Delivery & Logistics established greater relevancy across geographies as both deals and funding grew in Turkey and MENA. In H1 2021, MENA’s D&L startups surpassed total funding in FY 2020 by 51% while Turkey’s did so by 22x.

That said, Fintech startups recorded success across all geographies. MENA, Turkey, and Pakistan all noted a considerable increase in funding into Fintech startups. PayMob, in Egypt, closed the largest round worth $15M.

2. E-commerce resisted initial fluctuations to catch-up with the rest

E-commerce industry gained back traction in H1 2021 across EVMs. Across MENA, Turkey, and Pakistan, funding and deal volume in the sector in H1 2021 was equivalent to half the funding and deal volume recorded in FY 2020. In MENA, a year-over-year decline of 224% in Q1 2021 was offset by a 140% rise in funding in Q2 2021. 

Demonstrating the progression of the Pakistani ecosystem through the early-stage of development, E-commerce grew rapidly in the country. Pakistan was the only geography amongst EVMs (considering MENA cumulatively) that saw a rise in deal count within E-commerce, amassing double the capital raised in FY 2020. Egypt represented another E-commerce success story in H1 2021, accounting for 22% of all transactions closed across MENA, Turkey, and Pakistan.

In Turkey, 92% of the total E-commerce capital raised in FY 2020 was invested in Vivense’s mega-round. However, E-commerce funding declined in the country by 66% YoY. Saudi-based Sary raised a $30M Series B round, the largest E-commerce deal across EVMs.

Want to grasp this startup landscape? Browse 2,880+ E-commerce startups in EVM