With the release of our FY2022 MENA Venture Investment Report, we take a look at the impact of MEGA Deals and the pressures of the global economic downturn on the MENA VC ecosystem. Contact our team to learn more about this report and access the underlying data.
The MENA VC ecosystem managed to cross the $3Bn mark in 2022 unlocking a new funding record for the region. The region aggregated $3,153M in funding across 627 deals, recording a decline of 8% in terms of total transactions. While MENA surpassed FY 2021’s funding numbers by almost 10%, it is pertinent to put into context the impact of MEGA rounds and the effects of the global economic downturn on the funding.
The global markets started seeing the impact of the stock market crash, inflation, and rising interest rates on venture capital activity towards the end of 2021. Globally, Q1’22 funding dipped by 20% compared to the quarter before, according to Crunchbase. While MENA also saw a QoQ decline in funding in the first quarter, it was a negligible 2% and the ecosystem reported a continuation of the funding highs seen over 2021. Consequently, Q1 in MENA ended up accounting for 30% of the total funding recorded by the region throughout 2022.
The economic slowdown in the Emerging Markets surfaced over the next few quarters when Q2 in MENA saw the deals retreat by 23%. The region has been seeing a relatively slow third quarter since 2019 and in 2022 the slump was even more pronounced with the ecosystem seeing a 41% decline in funding and 16% in terms of deals, as venture and growth investors scaled back on their investment pace. Data insights driven by our analytics tool suggested the funding and deals saw a slight recovery which can be attributed to the lag in the announcement of deals and data sharing.
Another major contributor to 2022 funding was the MEGA deals. MENA-based startups recorded seven $100M+ rounds during the year which captured 32% of the total capital deployed in the region. If the impact of the $100M+ rounds is removed, the region continues to be capital-positive, albeit by a mere 10%. This was backed by an increased interest towards larger-sized rounds as the deal share for $20M+ rounds saw a 2PP increase while funding was inclined by 3PP.
The uptick also translated into inflated Mean and Median round sizes where the average round size in MENA escalated to $5.8M (+18% YoY), marking its 3-year consecutive incline and the Median went up to $1.5M. The most significant uptick was recorded at the Series B stage skewed by the 3 Mega Rounds closed at this stage.
What’s in the Report?
This yearly report provides a comprehensive overview and a deep dive into the Middle East and North Africa venture capital and funding investment space and includes the following:
• A 5-year analysis of MENA venture funding evolution, with a focus on 2022 country and industry performance benchmarks
• Top 20 investor ranking, together with their number of investments in 2022
• Top 20 startup funding rounds that were closed during the analyzed period, as well as the ticket size split of the entire deal flow
• A 5-year MENA exit evolution with the top 10 last exits in MENA-based startups
Who will benefit from the report?
This report is ideal for investors tracking startup activity, consultants looking to identify technology innovation trends, as well as government entities searching for investments.
This report was created with data from MAGNiTT, a comprehensive directory of technology innovation trends. The platform provides the following analytics tools:
• Investment directories, a comprehensive list of all startup venture funding across the Middle East, Africa, Pakistan, and Turkey
• Market Sizing Tools to visualize investment growth and trends across industries, geographies, and stage
• Comparison Tools to benchmark geographies, industries and investor performance
• Exit comparisons, looking at Mergers & Acquisitions from across the region
Learn how MAGNiTT's proprietary data can help your business. Contact us now!
*This report aggregates and analyses tech startup investments in 17 countries in the Middle East and North Africa - listed alphabetically: Algeria, Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Palestine, Qatar, Saudi Arabia (KSA), Syria, Tunisia, United Arab Emirates (UAE), and Yemen.