GCC venture capital, data & investor sentiment: A deep dive into MENA’s VC space with Philip Bahoshy

MAGNiTT's CEO and Founder, Philip Bahoshy sat down with John Lillywhite of Al Bawaba Business on his podcast, to deep dive into MENA's growing and evolving venture capital space. They explored how COVID-19 has affected investor sentiment in the region, how entrepreneurs have been affected, why pre-existing trends in e-commerce and Fintech are accelerating across the region, and much more.

The discussion aligned and focused on three of our recently released research reports:

H1 2020 MENA Venture Snapshot
H1 2020 MENA Startup & VC Sentiment Report
H1 2020 Saudi Arabia Venture Capital Snapshot

Some key takeaways from these reports include:

- There has been an increase of 35% in total funding from H1 2019 to H1 2020, with MENA-based startups raising $659M in the first six months of 2020. 
- 251 startup investment deals were recorded in H1 2020, down 8% from H1 2019.
- Egypt remains first by the number of deals, while the UAE received the highest share of funding. Lebanon dropped out of the top 5 for the first time, with a 78% decrease in deals.
- Saudi Arabia’s startups saw $95M of venture funding (up 102%) invested in 45 deals (up 29%) in H1 2020, both a record high.
- In 2020 the top 5 funding rounds account for 49% of all funding in the first half of the year, with 3 out of the 5 deals taking place before the outbreak of COVID-19

"One reason for a lack of outside investment in the Middle East tech industry is a lack of reliable data. This kind of investment data [from MAGNiTT], less than a decade ago, simply did not exist." - John Lillywhite, Al Bawaba Business 

Philip delves into the history of MAGNiTT, how it became a data platform, built traction, and has become what it is today. They also touch on how the pandemic has accelerated the rate of shutdown of certain startups, whilst there have been some who have benefited from increased demand, and those that despite being strong businesses, have had a shock to their system, and seen a drop in demand. 

Philip additionally shares his expertise on whether valuations now favour investors, what post-COVID-19 recovery will look like, and if businesses will need to pivot towards cashflow and bringing profit in rather than hypergrowth.

If you're looking for data-driven, comprehensive insights into MENA's startup ecosystem, listen to the full podcast below:

You can also check out the episode on Spotify and iTunes for a perspective on VC in the region that is both technical and specific and at the same time provides a fascinating panorama on the technologies, capital, and investors driving future trends.

Al Bawaba Business's tech podcast highlights how technology is reshaping governance ane economics in the UAE. 

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2019 has seen $516M invested in GCC-based startups, a 22% drop in total funding from $661M in 2018, mainly concentrated in the UAE. Discover more trends and insights in our 2019 GCC Venture Investment Report.