The H1 2023 MENA Venture Investment Summary reveals the impact of the economic challenges on venture capital in the Middle East, Africa, Pakistan, and Turkey (MEAPT) region and with a focus on MENA. For a deep dive into the region, access the H1 2023 MENA Venture Investment Premium Report here.
Stay updated with the VC world in the Emerging Venture Markets with our monthly webinars. Sign up for our waitlist here!
The Emerging Venture Markets (MENA, Africa, Pakistan, and Turkey) brought in a total of $1,880M across 530 deals in H1 2023. This marked a substantial decline of 64% in funding and 40% in the number of deals compared to the first half of last year. In terms of quarterly data, Q2 2023 was the lowest funded quarter since Q4 2020 while the number of deals retreated to their 2018 level. The majority of the funding for EVM geographies was accounted for by the MENA region which captured almost 60% of the total funding. Africa-based startups, on the other hand, contributed with a share of 51% of MEAPT’s total funding.
The slower pace of the economy and the retreat in VC activity globally were reflected in the MENA region too. The top geographies of MENA recorded significant declines in deal flow activity of as high as 58% on a year-on-year basis. While funding was able to move past the $1Bn mark, almost half of it came from the MEGA rounds recorded by Saudi Arabia and Egypt. The latter, especially, went through a sharp decline in economic growth owing to the severe currency depreciation and soaring food prices brought on by the Russia-Ukraine conflict. If we remove the impact of Halan’s $260M round, Egypt has seen a decline of over 80% in funding and over 70% when it comes to deals compared to H1 of last year.
On the deal front too, despite being the leading industry funding and deals have shrunk for FinTech despite the presence of a $260M deal. Most of the sectors in MENA have seen their deal flow decline by almost 50% on a year-on-year basis. At a time like this, when the market is volatile, investors have maintained their focus on smaller-sized or early-stage investments. In the MENA region, the interest has been growing in the $1M-$5M bracket size, and investors continue to back deals at this stage, especially in startups with a track record of product market fit.
Speaking of investors, the overall number has declined by almost half compared to H1 last year. However, the share of international investors has receded to 33% in H1 despite the attention that the MENA VC ecosystem has been receiving from international media. In line with the overall slowdown trend, exit activity has also been slower in the first half of the year with the total number of M&A transactions decreasing by almost 30% this year. We predicted exit activity to be at record levels in 2023 owing to depreciating valuation, however, data from H1 did not reflect that.
What is in the summary?
The latest half-yearly summary offers strategic insights into the Emerging Venture Markets (EVM) and focuses on the VC performance of the MENA region. This report covers a 5-year analysis of EVM and MENA's venture funding evolution, with a specific focus on the country comparison and industry performance in 2023. You will get access to precious information such as:
MENA Venture Funding Evolution: Get an overview of the past five years, highlighting the growth and development of venture funding in MENA with a focus on performance in 2023.
Key rankings such as the Top 10 investors, Top 5 funding rounds, and 5-Year exit evolution of MENA.
Who is it for?
Whether you’re a private investor, a VC, an investment company, a CVC, or working in corporate, this report gives an overview of the ecosystem and caters to a diverse audience including any curious minds who want to use the yearly, quarterly and monthly charts in this report to track investment activity.
You can also see in which country and industry the investment activity focused in terms of deals and capital deployed, allowing you to leverage insights and make wise choices.
The report can also be used by consultants looking to identify technology innovation trends and who will find it valuable to look at the evolution of M&A activity and concentration of acquirers/acquired startups.
Last but not least, government entities searching for investment opportunities will also find valuable information to make informed decisions.
Where is this information from?
The report was 100% created using data from MAGNiTT. MAGNiTT is the leading VC verified data platform and offers a comprehensive directory of technology innovation trends. Our unique SaaS solution includes investment directories listing startup venture funding across the Middle East, Africa, Pakistan, and Turkey, and now Singapore. By using MAGNiTT, you will also get access to market sizing tools to visualize investment growth and trends across various industries, geographies, and stages, as well as comparison tools for benchmarking geographies, industries, and investor performance. Furthermore, MAGNiTT offers exit comparisons by examining mergers and acquisitions.
Learn more about MAGNiTT's Data Methodology.