Despite a significant drop in funding, the Middle East and North Africa (MENA) startup ecosystem has demonstrated strong resilience in 2024. MENA startups secured $2.3 billion in investment in 2024, a 42% year-on-year decrease. However, if debt financing is excluded, the decline is only 11%. Simultaneously, the industry has seen growth in both deal volume and sector diversity, indicating its continued development.
While total investment has decreased, the ecosystem has become more active, with deal volume reaching 610, a 3.5% increase year-on-year. According to Wamda's latest report, the UAE leads the MENA startup ecosystem with 207 startups securing $1.1 billion in funding. Saudi Arabia follows in second place with $700 million in funding across 186 deals. Egypt secured $334 million in funding through 84 deals last year, while Oman rose to fourth place with $41.5 million in funding.
The Gulf Cooperation Council (GCC) countries were the most funded region last year. Among them, Oman jumped from tenth place in 2023 to fourth place in 2024, securing $41.5 million in funding through 12 startups. This is followed by Bahrain, which secured $29 million in investment through 12 deals, and Kuwait, whose ecosystem secured $22 million in funding through 8 startups. In North Africa, excluding Egypt, Morocco and Tunisia lead with $20.8 million and $13.1 million in funding, respectively.
Meanwhile, smaller ecosystems such as Jordan, Qatar, and Lebanon have shown moderate growth and suggest long-term potential. Jordanian startups have demonstrated resilience, with investments increasing from $9 million in 2023 to $15 million, involving 26 startups. Smaller ecosystems such as Qatar, Palestine, Iraq, and Lebanon all received less than $15 million in investment.
The distribution of capital within the UAE startup ecosystem provides us with profound insights into the continued development of the UAE market. Investors are primarily focused on three sectors: fintech, securing $265 million in funding through 47 deals; Web 3.0 developers, securing $255 million through 19 deals; and proptech, attracting $197 million in investment through 13 deals. In the UAE, a large market with a diverse cultural population and a destination for some of the world’s wealthiest families, fintech and proptech have become the most secure investment areas. At the same time, the UAE remains at the forefront of adopting next-generation technologies throughout the region, which translates into growing investor interest in startups providing Web 3.0 services.
Fintech leads with $700 million in funding, accounting for 30% of the total funding. Fintech was the highest funded sector in Egypt and the UAE, while in Saudi Arabia, Software as a Service (SaaS) accounted for the majority of investments, which is reasonable considering the rise of Saudi Arabia’s tech sector. MENA startups providing Web 3.0 services ranked second with $256.8 million in funding across 23 deals, closely followed by e-commerce startups, securing $253 million through 58 startups.
In terms of deal volume, SaaS followed fintech in second place, with 65 SaaS providers securing a total of $228.6 million in funding. However, the food tech sector suffered a major blow last year, securing only $77 million in funding through 18 deals, a stark contrast to the $224 million secured by 47 startups in 2023.
Early-stage startups received the majority of investment last year, with 300 startups from seed to Series A rounds securing over $1.2 billion in funding. In the later stages, particularly Series B and C, total investment was $332 million across 10 deals, while only two startups successfully secured pre-IPO funding, totaling $143.3 million. Female-founded startups secured only $27.6 million in funding, accounting for 1.2% of total funding, but this marks an improvement compared to 2023. Meanwhile, startups co-founded by men and women secured $192 million in funding, albeit with fewer deals.
Last year, investor interest shifted towards business-to-business (B2B) models, injecting $1.2 billion into 325 startups adopting B2B models, while 209 startups adopting business-to-consumer (B2C) models secured $717 million in investment, with the remaining funding going to startups using both models and direct-to-consumer (D2C) models.
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