In March 2023, startups in the MENA region secured $247 million across 67 deals, which represents a month-on-month decline of 67% and a 17% drop compared to the same period last year. However, despite the decline in March, the total funding raised by MENA startups in Q1 surpassed $1.1 billion, marking a quarter-on-quarter increase of 17%.

Last month, Saudi Arabia attracted the highest startup investment, mainly due to a debt financing round by the buy now pay later (BNPL) company, Tamara. The nation’s total deal value was more than half of the MENA region’s investment, with $175 million distributed over 20 contracts.

Tamara received $150 million in investment from Goldman Sachs, which accounted for 64% of the total funding reported last month and was a significant contributor to the surge in funding.

In the second place, the UAE raised $59 million through 18 deals. Among the notable deals were COFE’s $15 million funding round led by Wa’ed Ventures, Qlub’s $25 million Seed round, and Almentor’s $10 million pre-Series C financing. Following the UAE, Bahrain, Kuwait, and Morocco secured the next three spots, respectively.

Despite facing challenges in raising funds, investor sentiment towards later funding rounds remains low. Last month, there was a significant slowdown in late-stage investment activity, with only a few large-scale acquisitions. Most deals were observed during the initial rounds of funding, which attracted notable investor interest.

In March, fintech was once again the most popular industry for investors, with 73% of all venture capital activity in this sector. Foodtech and edtech secured the second and third highest amount of funding, respectively, with $19 million and $14 million. Together, these three industries accounted for 86% of all capital raised during the month.

Entrepreneurs in several other industries, such as e-commerce, Web3, travel, agritech, and logistics, received the remaining funds. The report noted that all sectors experienced an increase in deals.

Regarding gender distribution, male-led startups attracted most of the capital, receiving $244.5 million, which accounted for 98.8% of the total amount raised. The remaining 1.2% was shared between female founders and gender-mixed teams.