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| 09 January, 2018

Venture playground: MENA start-ups raise $475mln in 2017

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Image used for illustrative purposes.

Image used for illustrative purposes.

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Start-ups in the Middle East and North Africa raised about $475 million in new funding last year - 84 percent of which went to firms in the United Arab Emirates, according to a new report issued on Monday.

The MENA Venture Report by start-ups and technology website MENAbytes analysed 134 funding deals for 123 companies in 12 countries. It said that $400 million (84 percent) of the funding went to UAE-headquartered firms, which was largely a result of $275 million-worth of follow-on investments made in ride hailing service Careem and in regional entertainment platform Starz Play.

However, the report added that even with these deals removed, 63 percent of the total funding went to UAE-based companies. About 20 percent of the investment went into Saudi Arabia, although the level of investment was again skewed by one deal - a $20 million funding deal for payment processing firm Pay Tabs.

In terms of sectors, e-commerce attracted the most investment (15.6 percent of funding), followed by local services (11.2 percent), financial services (9.7 percent) and logistics (8.2 percent). In a press release announcing the report, MENAbytes founder Zubair Naeem Paracha said that 2017 was the "biggest year for MENA's ecosystems, in my opinion".

"We saw Souq exiting to Amazon, Kuwait's Carriage getting acquired by DeliveryHero, Emaar buying 51 percent of Namshi (and the) launch of big funds like STV, MEVP's MEVF III, Crescent Ventures, and many new early-stage VCs making their first investments," he added.

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The report also said that a "visible trend" demonstrated during the period was investments being made into e-commerce platforms target the business-to-business market, such as the UAE's OfficeRock and Floranow, as well as Morocco's WaystoCap.

The most prominent funders in the region were 500 StartUps (which completed nine deals), Middle East Venture Partners (seven) and Beco Capital (seven). Raed Ventures, Wamda Capital and Phoenician Funds all completed six deals each.

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(Writing by Michael Fahy; Editing by Shane McGinley)

(michael.fahy@thomsonreuters.com)

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