Today's Edition
KHALED AL KHAWALDEH (ABU DHABI)
The UAE led the Middle East and North Africa (MENA) region in startup investment in July, raising $96 million across 12 startups.
The region as a whole saw $355 million invested, marking a 206 percent month-on-month increase and a 260 percent rise compared to the same period last year.
This data, provided by regional accelerator Wamda and publisher Digital Digest, comes as a positive development following a sluggish first half of the year.
The initial six months saw total investments nearly halve to $881.7 million due to concerns over potential military escalation in the region.
The UAE maintained its position as the largest startup ecosystem in MENA, securing $455.5 million in the first half of the year.
In June alone, the UAE raised $82.5 million across 15 startups, significantly outpacing Egypt, which raised $15 million in June and $83 million in the first half of 2024.
July's impressive figures were partly driven by a surge in Egyptian startup investment, with $185 million raised across seven startups.
Meanwhile, the Saudi market experienced a decline in July, despite having raised $300 million in the first half of 2024.
"In the face of a global economic downturn and looming conflict between Israel and Iran, the MENA tech ecosystem has shown remarkable resilience," the report stated.
"These concerns were eased by the anticipated Federal Reserve rate cut in September, which revived hopes for a return of capital to global markets."
The report also highlighted that debt financing made up less than 1% of total investments in July, signalling that the investment slump observed earlier in the year may be easing.
Fintech emerged as the leading sector, attracting $180.8 million in July. Other popular sectors included SaaS, Proptech, E-Commerce, Healthtech, Traveltech, and AI.
"The slowdown in the first half of the year should not be seen as indicative of the year's overall performance. It was a necessary period for market assessment and portfolio diversification, influenced by the US Federal Reserve's interest rate," the report explained.
It further noted that several venture capital firms have launched new funds in the past six months, with billions of dollars pledged to invest in MENA tech companies.
This is expected to be reflected in increased investment volumes in the third quarter.
