- Saudi Arabia attracted over 50% of MENA startup funding in 2023, raising $1.4B – a 33% increase vs 2022.
- The UAE saw the most deals in MENA but funding declined 9% reflecting a global slowdown.
- After a slow 2022, investors regained interest in MENA startups in late 2023 as valuations became attractive.
Saudi Arabia has emerged as the top destination for venture capital investments in the Middle East and North Africa (MENA) region in 2023, attracting over half of the total funding despite a global slowdown.
According to data from MAGNiTT’s 2023 Venture Investment Report, startups in Saudi Arabia raised $1.4 billion last year, a 33% increase compared to 2022. This starkly contrasts the wider MENA region, which saw a 23% decline in startup funding to $2.6 billion.
The kingdom’s ability to buck the trend has been attributed to renewed investor interest in technology and venture opportunities. After a cautious first half, deal activity picked up in the last quarter of 2023, with Saudi startups Tamara and Tabby securing mega-deals above $100 million each.
While Saudi Arabia led in funding amount, the UAE maintained its dominance in deal flow, recording the highest number of startup investment transactions in MENA. However, deals were down 9% compared to 2022, reflecting the global slowdown.
Overall, macroeconomic challenges like inflation, oil production cuts, and interest rate hikes made 2023 a difficult year for tech startups seeking capital. But MAGNiTT CEO Philip Bahoshy remains upbeat: “With valuations now at more attractive levels for investments and favourable conditions for business development, the outlook appears promising.”
As the MENA region’s two startup hubs, Saudi Arabia and the UAE will likely continue to attract the lion’s share of VC money in 2024. However, sustained government support and increased international investor interest could see other countries like Egypt and Jordan gain ground.
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Last Updated on January 10, 2024 by Safiya K
