Investments in MENA start-ups came close to quadrupling from 2020 to 2021, fuelled by the growth in technology adoption and proactive startup ecosystems in major markets the UAE, Saudi Arabia and Egypt.
Investments reached $2.88 billion in 2021, with the overall value of deals growing by 3.7 times, according to a new report, The State of Digital Investments in MENA 2019-2021 by Digital Digest and Arabnet.
Startups based in the UAE attracted the highest value and number of investment deals in 2021, with Saudi Arabia in second position, followed by Egypt and Jordan.
Investment deals for early-stage funding rounds doubled, and the past year also saw the highest number of deals with participation from global investors, said the report.
“The overall value of deals in 2021 grew by 3.7x from 2020, fueled by the growth in technology adoption in the business sectors, as well as more proactive legislation in Saudi, the UAE, and Egypt,” said Racha Ghamlouch, co-founder of the Digital Digest.
“It is now more common to see investment deals over $10 million, even at a seed stage, and even more common to raise from global investors at every stage of the startup lifecycle.”
Participation of global investors increased significantly as startups matured, from five percent during the acceleration stage to 83 percent during Series C, said Omar Christidis, founder & CEO of Arabnet.
“The report observed clear patterns of investor interest in a number of business models, with Buy Now Pay Later, Crypto Exchanges, Cloud Kitchens, and B2B Marketplaces all commanding $100 million plus investment deals,” he added.
(Writing by Imogen Lillywhite; editing by Seban Scaria)