Despite high inflation, the UAE has been the most funded market through venture debt over the last few years, according to a new report by MAGNITT. Accounting for more than 50% of the number of deals and value of funding reported for the Middle East and North Africa (MENA) region, the country’s successful startup scene, including Tabby, TruKKer, Pure Harvest, and STARZPLAY, scored deals worth $275 million.
The value represents half of the venture debt reported between 2018 and 2022 across only 15% of the total deals in the region, as per the report.
Tabby’s deal was the first mega transaction for venture debt in the MENA region, contributing 39% of the total venture debt funding reported in 2022. The region continued to attract funding for startups despite global economic headwinds and uncertainty.
Venture debt in the MENA region aggregated $260 million across 18 deals last year, slightly down from $266 million in 2021. The report said that the decline is in line with a global contraction in venture investing.
The average deal size in 2022 also fell to $14.4 million from $26.6 million in 2021.
The report outlined that Saudi Arabia emerged as the second-most funded market through venture debt, accounting for 29% of total funding in the region, followed by Egypt and Jordan.
Fintech accounted for the highest share of venture debt deals between 2018 and 2022, raising 61% of total venture debt funding over the same period.