- MENA startups raised $254 million in March, a significant increase from February, with Saudi Arabia leading the charge at $198 million.
- Riyadh’s LEAP24 event spurred Saudi startups, notably Salla, securing $130 million pre-IPO, showcasing the region’s investment potential.
- Notable acquisitions included MBC Group’s stake in Anghami, while significant investment announcements highlighted growing support for regional startups, like Saudi Arabia’s National Development Fund unveiling two venture capital funds.
As per Wamda and Digital Digest, Startups across the Middle East and North Africa (Mena) experienced a significant boost in March, raising a total of $254 million through 54 deals. This marked a notable increase of 186% from February’s $88.7 million and a slight uptick of 1.17% compared to March 2023’s $251 million.
The surge in investment activity during March reversed the downward trend observed in January and February, with the quarter’s total reaching $429 million from 129 funding rounds. However, despite this improvement, the ecosystem’s activity remains 62% lower than the same quarter last year.
LEAP24, hosted in Riyadh from March 4–7, played a pivotal role in propelling Saudi startups to the forefront once again. These startups secured a total of $198 million across 25 transactions, with $130 million allocated to Salla’s pre-IPO round. Consequently, the UAE followed in second place with $39 million raised by 12 startups, while Egypt trailed behind in third place with $7 million raised by eight startups.
The majority of funding was directed towards software as a service (SaaS) providers, which garnered $130.6 million across nine deals. Fintech followed closely behind, securing $40 million over 12 transactions, while four e-commerce startups collectively raised $18 million.
Throughout the month, aside from Salla’s notable deal, the funding landscape lacked significant ticket sizes and later-stage investments. Seed rounds collectively attracted $49 million from investors, while four startups secured $38.5 million at their Series A stage. Additionally, 16 startups were awarded grants totaling $1.75 million.
A noteworthy trend observed was the decline in investment directed towards the business-to-customer (B2C) model, which received $48 million, constituting 19% of the total investment. Conversely, the business-to-business (B2B) sector garnered the majority, securing $188 million, accounting for 74% of the total rounds.
Consistently, male-led startups secured almost 90% of the deals, while those led by female entrepreneurs represented only 0.21% of transactions. Mixed-gender founder teams accounted for the remainder.
Moreover, 11 startups opted not to disclose their funding amounts last month. To provide an estimate, $100,000 was conservatively allocated to 10 of them, including Grintafy, 30Med, Seeru, Zameeli, Receiptable, Pharmacy Marts, Talabatcom App, Eesee, Kaskade Finance, and Houmata. Mojo received a larger allocation of $1 million for its undisclosed round.
While the month saw a lack of high-value deals and later-stage investments, the funding distribution skewed towards the B2B sector. Additionally, disparities persisted in funding allocations among male-led, female-led, and mixed-gender startup teams.
Dynamic Movement within the Ecosystem
March witnessed significant activity in the business ecosystem, with notable mergers and acquisitions (M&A) taking place. One of the key transactions involved MBC Group acquiring a 14% stake in Anghami, a leading music streaming platform. Additionally, Egypt’s MNT-Halan made headlines by acquiring Pakistan’s Advans Microfinance Bank, indicating a growing trend of cross-border acquisitions in the region. Furthermore, Classera, a prominent global edtech company, expanded its reach by acquiring Expert Solutions in Saudi Arabia, highlighting the consolidation within the education technology sector.
Moreover, RasMal acquired Pentugram, demonstrating a strategic move to strengthen its position in the market, while Mitgo’s acquisition of Embedded showcased the company’s commitment to diversifying its offerings. In a similar vein, Saudi Arabia’s T2 acquired Omani data analysis startup Promize, signaling a trend of regional startups attracting interest from larger players.
In addition to M&A activities, March also saw significant investment announcements. LEAP24 witnessed the launch of the $500 million KSA Logistics Fund III by Bahrain’s Arcapita Capital, aimed at boosting logistics infrastructure in Saudi Arabia. Meanwhile, Saudi Arabia’s National Development Fund unveiled two venture capital funds worth $120 million, signaling support for innovation and entrepreneurship in the kingdom. Additionally, the UAE’s Gulf Capital and RDIA pledged a $100 million investment, further underlining the growing interest in the region’s burgeoning startup ecosystem.
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Last Updated on April 1, 2024 by Safiya K
