VC funding in MENA, Africa, Pakistan and Turkey reached a record high in H12022, with startups raising nearly 70 percent of last year’s entire funding. Yet, the global economic turmoil is expected to slow down investments in H2 2022, according to a Magnitt report.
All four emerging venture markets had raised a total of $ 5.1 billion with more than 750 deals in the H1 2022, the Dubai-based startup data platform said in a report.
Africa outranked all markets in terms of the amount of capital raised with a total of $2 billion, which marked a 192% increase from the amount of funds raised in the same time last year, the report said.
“Africa was the only emerging venture market to cross the 50% mark of last year’s total transactions while MENA, Pakistan, and Turkey averaged 43% in H1 2022,” it noted.
The MENA region came second with a total of $1.8 billion, secured primarily through three mega deals by three different GCC-based startups. In the meantime, nearly half of a total of 67 exists closed across all four markets were executed by Middle East-based startups.
Turkey, alone, has raised $ 1.4 billion in investment led by logistics startup Getir, and gaming company Dream Games. Each has respectively raised $768 million and $121 million during the first half of the year, Magnitt said.
As to Pakistan, it has raised a total of 249 million with 35 deals. Although the number of deals dropped compared to H1 2021, venture capital raised recorded a 171-percent increase in H1 2022, with investors committing larger ticket sizes, the report noted.
The fintech sector remained the most capital attracting sector, raising nearly $1.7 billion and accounting for 34 percent of the total funding secured across all markets. Transport and logistics and e-commerce came in second and third, each raising respectively $1 billion and $501 million.
The report noted that most of the funding, a total of nearly 3.6 billion, was raised in the first quarter compared to only 1.5 billion in the second quarter. All four emerging markets had experienced a 47-percent QoQ drop in funding in Q2 2022 given global inflation and market adjustments spawned by the Russian invasion of Ukraine, added the report.
“Given the current market conditions and the QoQ deal drops observed across several EVMs between Q1 and Q2 2022, we are expecting more reserved deal activity in H2 2022,” the report expected.
(Writing by Noha El Hennawy; editing by Seban Scaria)