The UAE has been the most funded market through venture debt over the last few years, according to a new report.
Between 2018 and 2022, the UAE accounted for more than 50% of the number of deals and value of funding reported for the Middle East and North Africa (MENA) region, asset management and investment banking firm Shuaa Capital and data platform MAGNITT said in a report on Tuesday.
During the same period, the country saw local start-ups Tabby, TruKKer, Pure Harvest and STARZPLAY scoring deals worth $275 million. The value represents half of the venture debt reported between 2018 and 2022 across only 15% of the total deals in the region.
Tabby’s deal was the first mega transaction for venture debt in the MENA region, contributing 39% of the total venture debt funding reported in 2022.
Overall, the region continued to attract funding for start-ups despite global economic headwinds and uncertainty.
Venture debt in the MENA region aggregated $260 million across 18 deals last year, slightly down from $266 million in 2021. The decline is in line with a global contraction in venture investing, the report said.
The average deal size in 2022 also fell to $14.4 million, from $26.6 million in 2021.
“The start-up ecosystem across MENA continues to attract both international and regional investors even in a global climate of high inflation and aggressive interest rate rises,” said Natasha Hannoun, Head of Debt at Shuaa Capital.
Other major markets
The report also noted that Saudi Arabia emerged as the second-most funded market through venture debt, accounting for 29% of total funding in the region, followed by Egypt and Jordan.
Fintech accounted for the highest share of venture debt deals between 2018 and 2022, raising 61% of total venture debt funding over the same period.
Transport and logistics, as well as e-commerce and agriculture, remain the industries of choice for investors.
(Writing by Cleofe Maceda; editing by Daniel Luiz)