The investment value in the Middle East and North Africa (MENA) region experienced a substantial surge in May 2024. A total of 40 MENA startups managed to raise $282 million, which is a staggering 413% increase compared to April's $55 million. This growth was mainly driven by debt financing, which accounted for almost $140 million of the total amount raised.

However, on a year-on-year (YoY) basis, the deal value experienced a significant decline of 58%, dropping from $445 million reported in the same month last year across 39 deals.

Last month, Property Finder secured the largest ticket size with a $90 million debt round. Huspy also had a notable deal, surpassing its $37 million Series A raised in 2022. Keyper secured $34 million in pre-Series A funding, with $30 million of that being debt financing.

Startups based in the UAE acquired the majority of investment in the region, amassing $189 million spread across 23 transactions. Saudi startups came in second with a distant $56 million raised over 10 deals, and Egyptian startups secured the third spot with $24.5 million distributed across four deals, $16 million of which went to OneOrder’s Series A, combining both debt and equity.

In May, the proptech sector took the lead as the top-funded sector, even without Property Finder’s deal, garnering $167.2 million over seven rounds. The fintech sector lagged considerably, securing $32.7 million in investments across 12 startups, making it the second highest funded sector. In addition, three startups in the logistics industry managed to secure significant funding amounting to $25.3 million.

The agritech sector showed signs of recovery in Q2, with a total investment value of $23 million in May. This investment was divided among three startups, with $16 million allocated for iyris's Series A round. Software as a service (SaaS) startups also experienced a bounceback, raising a total of $27 million across three transactions. 

We can see that the region’s venture capital space showed a clear focus on later stage rounds last month, as five startups raised $59.3 million at their Series A stage and $44 million went to four startups at their pre-Series A stage. On the other hand, when it comes to the number of deals, the seed stage came out on top, with a total of seven deals worth $11 million.

UAE’s GrubTech was the only startup that closed a Series B round at $15 million, while Saudi Arabia’s SaaS startup, Merit, recorded $12 million for its pre-Series B. Up to $42 million wasn’t determined for which stage, as seven startups refrained from disclosing their stage rounds.

The business-to-consumer (B2C) model comprised 62% of the total funding in May, obtaining $174 million across 13 deals, while business-to-business (B2B) startups raised almost $100 million.

Despite the continued dominance of male founders in attracting the majority of investments, collecting 89% of the total amount, May marked an increase in number of deals closed in favour of male and female co-founded startups, as number of deals doubled from the four deals recorded in April, harvesting $28.6 million. In contrast, a mere four companies founded by women managed to secure $800,000 in funding.

Motion within the ecosystem

Last month observed notable activity in the VC space, as several funds were launched in the region’s major ecosystems, most of them focused on the Saudi ecosystem, such as the $100 million fund jointly launched by BIM Ventures and Japan’s SBI Holdings, the $250 million Afiyah Fund LP launched by UAE’s TVM Capital Healthcare, and 1957 Ventures launched by Riyad Capital. Meanwhile, Saudi Venture Capital (SVC) pledged $30 million in the US-based investment firm General Atlantic to invest in Saudi startups.

Bahrain’s Investcorp closed $570 million Investcorp Technology Partners V (ITP V) fund and Shorooq Partners and Korea’s IMM Investment Global (IMMG) launched a $100 million fund

Singapore-based VC firm Golden Gate Ventures launched a $100 million MENA fund in May, while Saudi Arabia-based HRtech Qsalary partnered with Itqan Capital to launch an $80 million investment fund.

In Egypt, two funds were launched last month, including the alliance between Beltone and Microfinanza Italia to launch a $2.4 million project to support the startup landscape and the $3 million Glint Fund II.

It is worth mentioning that Saudi Arabia’s Kingdom Holding, owned by Saudi billionaire Prince Alwaleed bin Talal, has participated in the $6 billion Series B round of Elon Musk's artificial intelligence startup, xAI, at a valuation of $24 billion.

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