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Despite a 12% decline, UAE leads the region in non-mega startup funding

UAE startups collective raised $150 million in funding during Q1 of 2023

Despite a 12% decline, UAE leads the region in non-mega startup funding
[Source photo: Anvita Gupta/Fast Company Middle East]

Startups in the UAE are attracting substantial funding, allowing them to impact the economy and technological advancement significantly.

In the first quarter of 2023, UAE, the Arab world’s second-largest economy, was involved in ten of the total 11 exits in the region. 

The latest report by Magnitt, entitled Q1 2023 UAE Venture Investment Report, shows that despite the slowdown, UAE led the region in non-mega funding, funding below $100 million, for startups. The report stated that the startups collectively secured upward of $150 million in 30 deals in Q1 of 2023. 

Of the $150 million, over 60% of the total funding in the UAE came from the top three funding rounds raised by three companies: Tabby – a fintech company, Qlub-a dine-in payment disruptor; and Cofe – an online coffee marketplace. The three startups collectively secured about $100 million, adds the report. 

Individually, the Dubai-based Tabby raised $58 million in a series C round in January, while Qlub secured $25 million and Cofe raised $15 million. 

However, this year there was a 12% quarter-on-quarter decline in the total number of deals and 60% in terms of funding. 

“The economic downturn also led UAE to record Q1 ’23 as the fifth consecutive quarter of decline for the total number of deals. The month-on-month activity too reflected the economic woes as February reported a retreat of almost 95% in funding compared to the first month of the year, marking it as the lowest-performing month since September 2020,” stated the report. 

It adds that in terms of geographical comparison, Saudi Arabia and Egypt overtook the UAE as the most funded geographies owing to their respective MEGA rounds.

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