- In July 2024, the MENA startup ecosystem saw a significant resurgence, raising $355 million, a 206% increase from the previous month.
- Egypt led the region in startup funding, securing $185 million, largely due to a major transaction involving MNT-Halan, surpassing the UAE.
- Fintech remained the top investment sector, attracting $181 million, followed by Web 3, which secured $85 million in funding.
- Gender disparity in funding persists, with only a small fraction of investments going to female-led startups, highlighting the need for greater support.
In July 2024, the startup landscape in the Middle East and North Africa (MENA) experienced a significant resurgence, with a total of $355 million raised by 38 startups.
This represents a remarkable 206% increase compared to the previous month and a staggering over 260% year-on-year (YoY) rise, underscoring the region’s resilience in the face of global economic challenges.
Resilience Amid Global Economic Uncertainty
Despite a looming global economic downturn and the heightened tensions between Israel and Iran, the MENA tech ecosystem has shown a surprising ability to adapt and thrive.
These regional uncertainties were mitigated by the anticipation of a Federal Reserve rate cut in September, which renewed optimism for cash inflows into global markets.
The fact that debt financing accounted for less than 1% of total investments in July sends a positive signal, indicating that the investment slump seen at the beginning of the year is starting to ease.
Egypt Emerges as a Regional Leader
For the first time in several months, Egypt’s startup ecosystem took the lead in the region’s funding landscape. Egyptian entrepreneurs raised an impressive $185 million across seven deals, with $157.5 million of this total coming from a single transaction involving MNT-Halan.
This is a substantial increase from the previous month’s $15 million raised through four deals. The UAE, traditionally a dominant player, secured the second position with $96 million invested in 12 startups.
In contrast, Saudi Arabia saw a sharp decline in investment, raising only $31 million across seven deals. This drop pushed the Kingdom to fourth place, behind Oman, which secured $37 million primarily due to the success of the startup 44.01.
Fintech Leads the Sectoral Investment
Fintech continues to be the most attractive sector for investors in the MENA region. In July 2024, fintech startups drew $181 million across 16 deals, maintaining their appeal in the investment landscape.
Following closely were Web 3 startups, which attracted $85 million in funding across two deals. Deeptech and cleantech sectors also made significant gains, largely due to the substantial investments in 44.01 and Intelmatix.
E-commerce, while not leading in total investment, remains competitive in deal volume, with six e-commerce startups raising a combined $15.7 million.
Shift Towards Early-Stage Investments
The investment focus in July shifted towards early-stage startups, with a significant portion of the funds directed at seed-stage companies. Eight seed-stage startups raised $96 million, while Series A startups received $91.7 million across eight deals.
On the other hand, pre-seed startups managed to secure only $1.8 million across five deals. Notably, there was an absence of investment in later-stage startups during this period.
The business-to-business (B2B) model continued to dominate the investment landscape, attracting $345 million across 27 startups. This marks the second consecutive month where B2B startups have led in funding. In contrast, business-to-consumer (B2C) startups raised just under $8 million across nine deals, with the remaining funds going to two B2B2C startups.
Gender Disparity in Funding
Despite the overall growth in investment, gender disparity remains a significant challenge in the MENA startup ecosystem. In July, only two female-led startups managed to raise $270,000.
Additionally, four startups with male and female co-founders secured $20.5 million, while the majority of the remaining funds went to male-led startups. This highlights the ongoing need for greater support and investment in female-led ventures within the region.
Mergers and Acquisitions Activity
July also saw notable activity in the mergers and acquisitions (M&A) space, particularly within the Emirati ecosystem. One of the most significant deals was the acquisition of BitOasis, a UAE-based crypto exchange, by India’s CoinDCX.
Additionally, Power League Gaming was acquired by Muller & Phipps Middle East Group, and Lableb acquired Majarra. These transactions underscore the dynamic nature of the MENA tech ecosystem, with companies looking to consolidate and expand their market presence.
The July 2024 rebound in the MENA startup landscape signals a positive shift in the region’s investment climate. Despite global economic uncertainties, the resilience shown by startups across various sectors, particularly fintech, highlights the growing confidence of investors.
However, the persistent gender disparity in funding remains a challenge that the ecosystem must address to ensure a more inclusive and diverse entrepreneurial environment. As the year progresses, the MENA region’s tech ecosystem appears poised for continued growth, driven by innovation and a renewed flow of investment capital.
Also Read:
- MENA Startup Funding: $116M Raised in June, $882M in H1 2024
- MENA Startups Secure $282M in May 2024: 413% MoM Growth
- MENA startups raised $55M in April 2024
- MENA startup funding hits $254 million in March 2024
- MENA Startup Funding Hits $88.7 Million in February 2024
- MENA Startups Secure $86.5M in January 2024 Funding Round
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