- Saudi startups lead MENA funding, securing nearly half of the $429 million raised in Q1, highlighting the Kingdom’s growing influence.
- MENA startups raised $254 million in March, a significant increase from previous months, with 54 deals completed.
- Investors favoured business-to-business (B2B) models, with B2B startups receiving 74% of total funding. It indicates confidence in enterprise-focused ventures.
- LEAP24 in Riyadh saw the announcement of significant funds, including a $500 million fund by Investcorp, promising further growth and innovation in the entrepreneurial sector.
Saudi startups are leading in the region’s venture funding, securing nearly half of the total in the first quarter of this year. They amassed $224 million out of $429 million raised across the Middle East and North Africa. This dominance underscores the Kingdom’s rising influence in the startup ecosystem.
March witnessed a surge in startup activity, with MENA startups raising $254 million across 54 deals, marking a significant uptick compared to previous months. Funding in March grew by 186 percent compared to February, reaching $88.7 million, and showed a 1.17 percent increase compared to the same month last year.
During LEAP24 in Riyadh, Saudi startups showed exceptional performance, with Salla securing a significant pre-initial public offering round of $130 million. The UAE and Egypt, although trailing behind, managed to secure $39 million and $7 million respectively.
Software as a service providers received the majority of funding in the quarter. They were followed by the fintech and e-commerce sectors. However, there was a noticeable absence of larger ticket sizes and later-stage investments compared to the previous year. Seed rounds and series A funding were the most common.
Business-to-business models were preferred over business-to-consumer, with male-led startups dominating the funding landscape. B2B models received $188 million, constituting 74 percent of the total amount, while B2C models garnered $48 million, accounting for 19 percent of March’s total funding.
Female-led startups and teams with mixed-gender founders also made their mark, albeit to a lesser extent. The month witnessed several mergers and acquisitions, including significant deals like MBC Group’s investment in Anghami and Classera’s acquisition of Expert Solutions.
LEAP24 also saw the announcement of substantial investment funds, promising more growth and innovation in the entrepreneurial sector. Investcorp spearheaded the initiative with a $500 million fund dedicated to supporting growth-stage ventures in Saudi Arabia, bolstered by a $35 million investment from Saudi Venture Capital.
Simultaneously, Oasis Capital introduced a $100 million fund focusing on early-stage international ventures. In the gaming sector, the Saudi Esports Federation, in collaboration with the Social Development Bank and the National Technology Development Program, unveiled plans for two funds under its Gaming and Esports Sector Financing Program.
Saudi venture capital firms Merak Capital and Impact46 announced $80 million and $40 million funds respectively. Plug and Play Tech Center entered the scene with a pioneering $50 million fund aimed at nurturing software and tech ventures in Saudi Arabia and the MENA region. Takamol Ventures also announced a $53 million venture capital fund targeting early-stage tech companies to fuel innovation.
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Last Updated on April 6, 2024 by Safiya K
