By Farida Khalil
During the first half of 2018, startups in the Middle East and North Africa collectively received 15 more deals than the first half of 2017. The increased digitalization has driven a shift in the industry-focus of investors and allowed technology-based sectors to climb up in the rankings. Technology, IT Solutions and Delivery and Logistics all placed high in the rankings, each receiving 11 deals in H1 2018. Despite a drop in number of deals made to all industries from the first half of 2017, the surge continued to come from the e-commerce industry.
Since MENA has seen a technology boom in various sectors, the region has established itself as one of the fastest growing e-commerce markets in the world. The sector dominated the deal flow in the region with 17 deals taking place. In fact, a Series A, $13.6M funding from Quick Manage FZ LLC to e-commerce startup, Alawooz, ranked amongst the top deals. E-commerce also accounted for 12% of all transactions made and represented 16% of disclosed funding of which Brantu, La Reina Exchange, CarSwitch and Eyewa, were part.
The industry also led in undisclosed funding, mainly due to Mumzworld’s Series B investment round being undisclosed. By making more and more headlines such as Noon launching a grocery delivery service and the industry heading into a pivotal moment as activity accelerates, the e-commerce market in the region is expected to double to $69bn by 2020.
Alongside the increased digitization in the region, emerging technologies such as drones, AI and blockchain began to gather momentum too, placing technology high on the top industries spectrum. Technology maintained its position as a sector with various deals, with 11 deals taking place in the first half of 2018, one less than the first half of 2017. Some fundings that took place in H1 2018 to startups in the technology sector include, a $50K SEED stage investment from Krypto Labs in Voliro, a $30K SEED stage investment in KeepFace, and a $10K SEED stage investment from Oasis500 in MellBell.
But the reach of digitalization does not end there. IT Solutions, another technology oriented industry also made the top rankings. In the first half of 2018, startups in the IT Solutions sector received 11 deals, 3 more deals than the first half of 2017. Some investments made in the IT Solutions industry include $12K SEED stage investment in Felix from TechStars, a $30K SEED stage funding in Entlaqa and a $10K SEED stage investment from Fikra Labs in Arabot.
The region has also demonstrated a high growth potential for startups in the Delivery and Logistics industry, with more and more startups forming in the sector in response to hyper-local needs. Startups in the industry have created innovations in the region and attracted investors, having received a total of $75M in funding in 2017. Some of the deals in the Delivery and Logistics industry include a $50K funding in TruKKer from Arzan VC and The Riyad Taqnia Fund (RTF), as well as a $13K funding in Wasel Lee.
Purchase MAGNiTT’s H1 2018 MENA Venture Investment Report for an in-depth breakdown of the fundings, deals and exits that took place in the first half of 2018.