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MENA startups secure $882 million in first half of 2024

The UAE emerged as the regional leader in June, closely followed by Egypt and Saudi Arabia.

MENA startups secure $882 million in first half of 2024
[Source photo: Krishna Prasad/Fast Company Middle East]

Despite continuing hype around generative AI and AI startups raising hefty investment rounds, the broader venture funding environment in the MENA region, like elsewhere, is witnessing a slowdown.. 

According to data from venture news platform Wamda, venture capital activity in the MENA startup scene dipped in June. 38 tech startups raised $116 million, bringing the half-year total to $882 million. This figure represents a 59% decrease from May’s $282 million haul.

However, compared to June 2023, this year’s figure reflects a significant 182% growth. This paints a picture of a dynamic funding landscape, with a slowdown in recent months following a strong start to the year.

The UAE emerged as the regional leader in June, with startups securing $82.5 million across 15 deals. Egypt followed closely behind, with four companies raising $15 million. Notably, Saudi Arabia, a previous frontrunner, slipped to third place, with seven startups garnering a total of $13.5 million.

June also saw a shift in the most funded sector. Fintech reclaimed its position at the top, attracting $38 million with over 10 deals. Construction technology came in a close second, largely due to Tenderd’s $30 million agreement, the highest single investment during the month.

Most of June’s investment went towards pre-Series A and seed-stage startups. Four pre-Series A companies received $45 million, while five seed-stage startups secured $27.3 million. This highlights continued investor interest in early-stage companies with promising potential.

Business-to-business (B2B) models continued to attract the lion’s share of funding in June, raising $66.4 million across 18 deals. This represents 74% of the total investment during the month. Conversely, business-to-consumer (B2C) startups garnered $49.5 million.

A gender gap in funding persists, with male-founded startups receiving a significant portion ($103.4 million, or 89%) of the capital. Only two female-led startups managed to raise a combined $200,000.

In the first half of 2024, the UAE remains the top-funded ecosystem, with 91 startups raising $455.5 million. However, this figure marks a decrease from the $604 million raised during the same period in 2023. Saudi Arabia also witnessed a decline, attracting $300 million compared to last year’s $554 million.

Egypt’s economic challenges significantly impacted its startup ecosystem. Only 33 startups raised $83 million in H1 2024, a staggering 80% drop compared to last year. Conversely, Morocco’s ecosystem gained traction, with six startups securing $12.5 million in funding.

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