Startups in the Middle East and North Africa region (Mena) raised $247 million across 67 deals in March 2023, a decline of 67 per cent month-on-month (MoM), and a 17 per cent dip from a year-ago.

The total funding raised by startups in Q1 surpassed the $1.1 billion mark in March 2023, marking a 17 per cent increase quarter on quarter.

Saudi Arabia was the top destination for startup investment last month, scooping up more than half of the total deal value in the region with $175 million across 20 deals. The rise was largely attributed to the $150 million raised by buy now pay later (BNPL) startup Tamara in a debt financing round from Goldman Sachs, which alone represented 64 per cent of the total funding value recorded last month.

The UAE was a distant second with $59 million raised across 18 deals. Notable deals include Qlub's $25 million Seed round and COFE's $15 million round led by Wa'ed Ventures as well as Almentor's $10 million pre-Series C round. 

Bahrain, Kuwait and Morocco ranked third, fourth and fifth respectively.

Amid a rising difficulty in raising capital, investor sentiment at later stages of funding remains tapped out. Last month saw a significant lull in late-stage funding activity, with only a few mega deals recorded. On the flip side, the earliest stages of funding witnessed noteworthy investor traction, accounting for the majority of transactions. Last month also witnessed a growth in grant funding. 

Once again, fintech was the preferred sector for investors, garnering 73 per cent of VC activity in March. After fintech, it was foodtech and edtech that brought in the second and third highest amount of funding with $19 million and $14 million respectively. The three sectors together accounted for 86 per cent of the capital raised in March. 

The remaining investments were allocated to startups in proptech and contech, e-commerce, Web3, traveltech, agritech and logistics, among others. The deal count however witnessed an uptick across all verticals.

As ever, male-led startups attracted the most capital at $244.5 million, translating to 98.8 per cent of the total amount raised. Female founders and gender-mixed teams took the remaining 1.2 per cent.

Last month, eight startups did not disclose the financial details of their transactions. They include Almatar, Vuz, Nuqtah, telfaz, Amplifidor, HORIZOONX, Ygii, neutrality.one. We assigned the first four a conservative amount of $1,000,000 and $100,000 to the last three.

These monthly funding reports are a collaboration between Wamda and Digital Digest.