Venture Capital (VC) investments in Qatar fell by 57% to QR 43 million ($11.8 million) last year, according to a new report.

The decline mirrors the regional trend in the Middle East and North Africa (MENA) region, which saw a 23% drop in funding, while the global VC scene saw a 42% decline, said the Qatar Development Bank (QDB) report, which is in collaboration with MAGNiTT research platform.

“The Qatari venture capital ecosystem displayed a more restrained performance in 2023, aligning closely with the global and regional deceleration observed in the venture capital landscape during the same year,” the report said.

Despite last year’s decline, the Gulf state’s VC ecosystem witnessed a 17% compound annual growth rate (CAGR) in capital deployment and a 10% growth in transaction volumes between 2019 and 2023.

Throughout the five-year period, around QR 475 million were channelled into 187 start-ups, contributing to 224 VC deals.

The bulk of venture funds (77%) last year went to five industries, which include manufacturing, which bagged 36% of the investments, fintech (15%) and healthcare technology (12%).

The global VC market had a challenging year in 2023 amid uncertainty, geopolitical tensions and high interest rates.

Both global VC investments and the number of VC deals posted significant declines year-over-year in 2023, with all regions experiencing major declines, according to a KPMG report.

(Writing by Cleofe Maceda; editing by Seban Scaria)