MAGNiTT’s founder, Philip Bahoshy, commented, “We are pleased to launch the H1 Venture Funding report in which we have used new analysis to capture undisclosed funding across the region. This allows for more accurate estimates on the venture funding space as it continues to show signs of development and growth.”
- Investment Breakdown: When looking at the geography and industries of startup investment, however, new trends are beginning to emerge. The UAE still maintains its dominance as the most active and largest recipient of startup funding, with other countries beginning to emerge:
- The UAE continues to account for the lion’s share of startup deals (32%) and investment (59%)
- Egypt saw an increase of 12% and KSA a 9% increase in startup funding in H1 2018, emerging into the top 3 countries across MENA
- E-commerce still remains the most active industry with regards to investment in H1 2018, accounting for 12% of all transactions and 16% of disclosed funding
Bahoshy points to “Governments across the region continue to focus on startup innovation. We have seen regional initiatives like visa regulation changes in the UAE, launch of the new Fund of Funds in Bahrain and changes to foreign ownership structures in KSA as examples to further support Entrepreneurs in the region. While challenges exist, similar to all emerging ecosystems, the public and private sector are working closely together to help solve for many founders pain points.”
- VC activity and Exits: 2017 saw the emergence of many new Investment Institutions in the MENA region. H1 2018 has continued to see new market entrants as well as deployment from many of the same protagonists:
- 500 Startups remains the most active venture capital investor, especially at the SEED and PRE-SEED stage, accounting for 10 investments, followed by MEVP with 8 deals and Arzan Capital with 7;
- Moreover, accelerator programs remain a key stakeholder in supporting early-stage startups, with Flat6Labs in Cairo graduating 10 firms, as well as Oasis 500 and Flat6Labs Beirut graduating cohorts of 8 startups each;
- Early stage investment accounted for 84% of all transactions in H1 2018, up 6% from H1 2017, while accounting for 27% of the total funding amount.
Bahoshy commented, “In a record start of the year in terms of transactions, much of this investment had been focused at the Early Stage. Multiple governments have made announcements on the creation of Fund of Funds to help fuel investments across all stages of Startup growth. We are also seeing Corporates play an active role in Corporate Venture Capital activity and much of the MENA regulation is focused on supporting startups and investors connect. All these factors will help the acceleration of the MENA startup ecosystem.”
MAGNiTT provides an in-depth review, including a full list of all investments and investors, as well as analytics on the investment landscape split by geography, industry and stage, in their online subscription, with which you can access all reports related to the MENA startup ecosystem. The team also recently launched a unique service for startups to apply to MENA’s leading Funding Institutions and Accelerators using their MAGNiTT profile.