The Q1 2023 MENA Industry Venture Investment Brief examines the impact of the ongoing global economic challenges on the performance of three of MENA’s top ranking industries.
The first quarter of this year has witnessed a significant upheaval in the global financial sector, and high inflation rates have made it impossible for an economic soft-landing scenario to materialize. Although the Federal Reserve's actions of continuously amplifying interest rates, which were followed by some Central Banks in the region, may have caused inflation to retreat, underlying price pressures remain sticky.
The MENA VC ecosystem experienced a sluggish start in 2023, with funding declining by 13% YoY, and deals plummeting by 55%. The macroeconomic environment continued to drive up the cost of capital, leading to a more conservative investment approach, which further cooled down the market. This trend was reflected in MENA's top industries, including FinTech, Transport & Logistics, and E-Commerce/Retail, which witnessed yearly declines in transactions and funding, except for the impact of the MEGA deals closed for FinTech and E-Commerce/Retail. Unfortunately, the Transport & Logistics industry suffered the most during the first quarter of this year. Given the challenging market environment, investors remain vigilant and cautious while making investment decisions and this is reflected clearly in both deal flow and funding evolution.
The fact that Q1 2023 was the lowest funded quarter for T&L since Q3 2019 (or Q3 2022 if we remove the impact of the MEGA deal in that quarter) suggests that the ongoing financial vulnerability had a more significant impact on the industry compared to the pandemic era and its consequences. Overall, while Q1 2023 was a challenging quarter for the Transport & Logistics sector in the MENA region. The fact that out of 11 deals closed for T&L in Q1 2023, seven were of round size $0M-$1M, indicates a risk-averse nature of investment in the industry. This trend may reflect a cautious approach by investors who are wary of the ongoing economic pressures and uncertainties.
What’s In The Brief?
This brief provides a comprehensive overview and a deep dive into the evolution of MENA’s industries (FinTech, E-Commerce/Retail, and Transport & Logistics) and includes the following: 5-year analysis of each industry’s venture funding evolution, an 8-quarter analysis of each industry’s venture funding evolution, the top 5 sub- industries for each of the three industries in MENA, the top 10 industries by deals in MENA, the top 10 industries by funding in 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.
*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.