While KSA surpasses Egypt in total transactions and the UAE aggregates the lion's share of funding in FinTech, we explore the drivers behind MENA's FinTech boom in 2021 with MENA's Top 3 FinTech Backers.
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Big wins in FinTech as governments, venture capitalists, private institutions, and public funds double down on their backing of the sector. After an almost 50% YoY dip in VC funding in the sector across Emerging Venture Markets in 2020, the train gets back on track with record-highs in both funding and transactions closed in 2021. As much as we’d expect from FinTech stars like Tabby (UAE) and Paymob (Egy) to raise major funding rounds in 2021, the sector was no stranger to underdogs- both in the startups raising sizable investments and in the geographies making big strides in the market. As observed in our newly released FinTech 2022 Venture Investment Report one thing remains certain, the future of finance through FinTech disruption is at the core of investor and government mandates.
Whether exploring Open & Neo-banking, alternative payment solutions, micro-crediting solutions, or Cryptocurrency and digital investment, FinTech startups across Emerging Venture Markets gained investor traction over the past year recording more than 500% YoY growth in funding over 2021. This phenomenal growth was in part driven by an unprecedented influx of capital in the Sub-Saharan markets, where 6 FinTech Mega Deals drove funding growths as high as 850% YoY. Accounting for more than 60% of all capital deployed in Africa over 2021, FinTech startups closed the highest number of deals in each of the top 4 geographies. In geographies like Nigeria, the sector accounted for more than 70% of total VC investment in the country, while this proportion is driven to almost 90% in South Africa.
Over in MENA, while the UAE remains the region's hub for FinTech, Egypt and Saudi Arabia have observed impressive YoY growth to catch up; and for the first time, Saudi Arabia was able to surpass Egypt by 2 deals to close the gap with the UAE from 22 in 2020, to only 8 deals in 2021. So who were MENA’s biggest drivers of FinTech for the past year? This week we explore MENA’s Top 3 FinTech Investors in 2021:
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The UAE-based Venture Capital firm has been investing heavily in the Technologies of the future in the region and overseas. Following a “PEN” (Pakistan-Egypt-Nigeria) investment strategy, Global Ventures’ 2021 mandate backed industries of digitization from HealthTech, E-commerce, Enterprise Software, to AgriTech, and surely FinTech. With 9 deals across MENA, Global Ventures was able to pinpoint FinTech’s larger players in the ecosystem as well as the rising stars with scaling promise.
Across its investments in the FinTech space, Global Ventures explored many prominent themes from digital payment infrastructure backing the likes of Paymob (Egy) and Tabby (UAE), Open Banking with Tarabut Gateway (Bahrain), BNPL (Buy-now-pay-later) solutions with Sympl (Egypt), to corporate financial wellness backing NowPay, and even CaaS (Cards-as-a-service) for startups backing Tribal Credit's (Cairo) Series A round which was joined by the likes of BECO Capital and Endure Capital.
Originating in Saudi, Impact 46 has been investing in Emerging ventures to support the overall Tech scene in the Kingdom and beyond. With more than 30 investments backing over 25 startups in the region to date, the Saudi VC fund has backed a wide range of industries including E-commerce, Transport & Logistics, HealthTech, and FinTech. Focusing their efforts and capital investment on building the local infrastructure, Impact 46 has yet to venture into North Africa but has backed the prominent FinTech players in the Middle East.
Over the past year, Impact 46’s portfolio backed macro and micro disrupting FinTech ventures with verticals traversing Banking and InsurTech investing $24M in Rasan Information Technology, Investment Benchmarking with digital platform Dawul, BNPL backing Tamara, Shariah-compliant crowdlending with Lendo, to fully integrated FinTech solutions investing in E-wallet provider Hala, all based in KSA.
The Germany-based Global Oriented VC firm Global Founders Capital has been doubling down on its mandate in Emerging Venture Markets. Only this year, the global VC has announced its backing of MENA’s first MegaDeal of the year backing Crypto exchange platform Rain and the anticipated backing of dine-in instant payment disruptor Pluto.
Ranking third by number of investments in MENA-based FinTech startups, Global Founders Capital has invested in critical FinTech solutions including the aforementioned Tabby, digital investment, and crypto exchange with platforms like Baraka and BitOasis, InsurTech with Amenli and Hala هلا, as well as Genz-focused peer-to-peer payment with Telda coming out of Egypt.
Get the full oversight over the FinTech Space in 2021. Purchase our FinTech 2022 Venture Investment Report or Download our State of Startup Funding- 2022 Emerging Venture Markets Report for Free.
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