MENA Q1 2022: Growth in Round Sizes Amidst Global Pressure

Data collected over the first months of this year, signify that Q1 2022 was more than consistent with a gradual Venture Capital growth trend in MENA and across Emerging Venture Markets- we dive into the granular Average & Median round sizes and Total transaction growth over the first quarter of the year. 

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By now we’re all well aware that 2021 was a highlight year for venture markets globally. With the strain on private and traditional investment classes caused by global health, socio-economic, and financial pressures, Venture Capital continued to provide viable and favorable opportunities for investors globally. All 5 Emerging Venture Markets (ME, Africa, Pakistan & Turkey) covered on our platform observed a YoY growth in capital investment and total transactions; with MENA growing its investment by a 138% YoY to raise south of $2.6Bn over FY 2021. 

Crossing the $7Bn mark in capital invested across MEAPT over FY 2021 isn’t the only feat remarkable for EVMs. On the cusp of Q1 2022 and well into the first half of this year, the investment environment across MEAPT remains capital-positive. In the first quarter of the year, and while global funding dipped by 13% compared to Q4’ 21, funding in the MENA startup space has surpassed that of the previous quarter (Q4’ 21) by 33.3%, and that of Q1’ 21 by 161%. In fact, all MENA top geographies have explored a Quarter-on-Quarter growth in funding at the beginning of this year. The data indeed reflects the positive investor dynamic across MENA, and similarly in other EVMs at the beginning of this year. However, diving into the granular data on funding growth per funding stage has been reflective of a wider growth trajectory, which remains consistent between Q4 2021 and Q1 2022. Here’s what we found out: 


As recorded in our MENA Q1 2022 Venture Investment Report released earlier in April, the MENA VC ecosystem observed a QoQ growth in average round sizes at every startup stage of the investment base. Historically, the average funding round in MENA has observed a 3-year consecutive incline, growing by a 194% between 2018 and FY 2021. What’s more important to note is that in 2021, the Median round size in MENA (midpoint value) of all funding rounds has officially hit the $1M mark in FY 2021 similar to its peer African VC market. While 2021 emerged with plenty of VC funding breakthroughs, this data signals that gradual trajectory toward more capital-intensive funding rounds in MENA and across other EVMs. 

The data collected over the first months of this year signify that Q1 2022 was more than consistent with this cumulative trend in investment. The VC ecosystem in MENA did not only record a 32% growth in average funding round quarter-on-quarter, but also recorded Mean, Median, and total transaction growth of Early Stage, Series A, and Series B rounds in Q1 2022.  The most remarkable growth this quarter was at the Series B level, where the average round size more than doubled quarter-on-quarter amidst a 20% increase in total transactions closed. Historically, the average Series B round has grown at a 39% CAGR between FY 2019 and Q1 2022. Yet it is safe to assume that the Mega investment in MENA-based (Bahrain HQ’d) cryptocurrency exchange platform Rain ($110M), two $45M+ rounds raised by UAE-based T&L startup TruKKer, and a $54M funding round closed by UAE-based BNPL pioneer Tabby were the major drivers of growth in the Series B stage. 

While all this bodes well for Venture Capital in MENA and across Emerging Venture Markets, the key is to keep on tracking this data to confirm or debunk a gradual funding growth trajectory throughout the entirety of the year. A key metric that could be helpful in this endeavor is observing the growth at the current Early Stage (Pre-SEED to Pre-Series A) as this would organically affect future deal flow. Between MENA and Africa, the latter showed the larger growth in the Average Early Stage round over Q1 2022. However, the African VC ecosystem observed a 6% QoQ dip in total Early Stage transactions over Q1 2022 despite recording a 47% growth in the average Early Stage Funding round size. While Kenya-based Dash, Egypt-based Naqla, Tanzania-based Nala Money, and Ghana-based Float all raised $10M+ Early-Stage rounds over Q1 2022, the lion’s share of Early-Stage deals (60%) was recorded under the $1M mark. 

This piece was developed using the data sets from our State of Startup Funding-2022 Emerging Venture Markets Report, available for download- MENA Q1 2022 Venture Investment Report & Africa Q1 2022 Venture Investment Report, available for purchase- as well as our newly optimized dynamic Analytics Charts. 

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