- MENA startups secured $282 million in May 2024, a 413% increase from April, driven by $140 million in debt financing.
- Despite the monthly surge, funding declined 58% year-on-year from $445 million in May 2023.
- Proptech dominated, raising $167.2 million, followed by fintech with $32.7 million. Agritech and SaaS sectors showed growth.
- Significant VC activity included new funds from BIM Ventures, TVM Capital, Saudi Venture Capital, Investcorp, and Golden Gate Ventures.
- High-profile investments featured Kingdom Holding’s participation in Elon Musk’s xAI, highlighting the region’s global impact.
In a remarkable display of growth, startups in the Middle East and North Africa (MENA) region secured $282 million in funding in May 2024.
This represents a substantial 413% increase from the $55 million raised in April. The significant rise in investment was largely driven by debt financing, which contributed nearly $140 million to the total.
Year-on-Year Decline
Despite the impressive month-on-month (MoM) growth, the year-on-year (YoY) figures painted a different picture.
The total deal value saw a notable decline of 58%, dropping from $445 million recorded in May 2023 across 39 deals.
This indicates that while May 2024 saw a surge compared to the previous month, it still lagged behind the same period last year.
Major Deals and Key Players
Among the significant deals, Property Finder stood out with the largest ticket size, securing a $90 million debt round.
Huspy also made headlines with a notable deal, surpassing its $37 million Series A raised in 2022. Keyper secured $34 million in pre-Series A funding, with $30 million of that being debt financing.
Geographic Distribution of Investments
The United Arab Emirates (UAE) dominated the investment landscape, with startups based in the country raising $189 million across 23 transactions.
Saudi startups followed, securing $56 million over 10 deals, and Egyptian startups came third with $24.5 million across four deals.
Notably, OneOrder’s Series A round in Egypt accounted for $16 million of the total, combining both debt and equity.
Sector Analysis
The proptech sector led the funding charts in May, even excluding Property Finder’s massive deal, garnering $167.2 million over seven rounds.
Fintech came in second, with $32.7 million in investments across 12 startups. Additionally, three logistics startups managed to secure a significant $25.3 million in funding.
Agritech showed signs of recovery in the second quarter of 2024, with three startups raising a total of $23 million. This included $16 million allocated for iyris’s Series A round.
The software as a service (SaaS) sector also experienced a resurgence, raising $27 million across three transactions.
Funding Stages and Models
The venture capital space in MENA displayed a clear focus on later-stage rounds.
Five startups raised $59.3 million at their Series A stage, and $44 million went to four startups at their pre-Series A stage.
However, in terms of the number of deals, the seed stage came out on top with seven deals worth $11 million.
UAE’s GrubTech was the only startup to close a Series B round, raising $15 million, while Saudi Arabia’s SaaS startup, Merit, recorded $12 million for its pre-Series B round.
Also, $42 million in funding was not categorized by stage, as seven startups did not disclose their round details.
The business-to-consumer (B2C) model dominated the funding landscape, comprising 62% of the total funding in May with $174 million across 13 deals.
In contrast, business-to-business (B2B) startups raised almost $100 million.
Gender Dynamics in Funding
Despite the continued dominance of male founders in attracting the majority of investments, May saw an increase in the number of deals closed by male and female co-founded startups.
The number of such deals doubled from four in April, raising $28.6 million. In contrast, only four startups founded by women managed to secure $800,000 in funding.
Ecosystem Movements
May witnessed significant activity within the venture capital (VC) space, with several funds being launched across the region.
Many of these focused on the Saudi ecosystem. Notable launches included a $100 million fund by BIM Ventures and Japan’s SBI Holdings, the $250 million Afiyah Fund LP by UAE’s TVM Capital Healthcare, and 1957 Ventures by Riyad Capital.
Additionally, Saudi Venture Capital (SVC) pledged $30 million to US-based General Atlantic for investments in Saudi startups.
In Bahrain, Investcorp closed a $570 million fund named Investcorp Technology Partners V (ITP V). Shorooq Partners and Korea’s IMM Investment Global (IMMG) launched a $100 million fund.
Singapore-based VC firm Golden Gate Ventures announced a $100 million MENA fund, while Saudi Arabia’s HRtech Qsalary partnered with Itqan Capital to launch an $80 million investment fund.
In Egypt, two funds were launched in May. Beltone and Microfinanza Italia formed an alliance to launch a $2.4 million project supporting the startup landscape, and the $3 million Glint Fund II was also introduced.
Notable Investment
It is worth mentioning that Saudi Arabia’s Kingdom Holding, owned by Prince Alwaleed bin Talal, participated in the $6 billion Series B round of Elon Musk’s artificial intelligence startup, xAI, which was valued at $24 billion.
May 2024 was a landmark month for MENA startups, with substantial growth driven by significant debt financing and notable deals across various sectors.
Despite the YoY decline, the month-on-month growth and vibrant VC activities highlighted the region’s dynamic and evolving startup ecosystem.
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