The UAE has proved to remain the most active ecosystem in 2018 and this has been affirmed by Magnitt's 2018 Mena Venture Investment Report.
The UAE has maintained its dominance thanks to continued government support, corporate venture interest and growing investor appetite for startups. The report states that 30 per cent of all transactions were made in to UAE-headquartered startups in 2018, while it also accounted for 70 per cent of total funding.
Egypt was the fastest growing ecosystem in 2018 - receiving the 2nd highest number of deals at 22 per cent of all deals, up 7 per cent from 2017. Lebanon, ranked third by number of transactions with 10 per cent, saw the highest fall in deal flow compared to 2017, with a 4 per cent drop.
MAGNiTT, Mena's leading data platform tracking the region's startup ecosystem, today released their annual 2018 Mena Venture Investment Report, which provides an in depth analysis of startup funding across the Mena. The report highlights strong growth with a record number of transactions and an increase in total funding across Mena-based startups, up 31 per cent from 2017.
Philip Bahoshy, MAGNiTT founder and CEO, said: "This is an extremely positive signal. 2018 saw more international investors enter the foray than before, new accelerator programs created the region, multiple government initiatives spurring innovation and established regional Venture Capital firms closing out new funds to deploy further capital. The 2018 has seen more later stage investment deals at Series B and beyond than ever before and we expect this trend to continue into 2019 as startups scale to get closer to exits."
2018 saw 366 investments in Mena -based startups, which amounted to $893 million of total funding.
FinTech overtakes E-commerce
In another sign of a shifting landscape, FinTech accounted for 12 per cent of all deals in 2018. Notable deals include the $18 million in Aqeed, $8 million in Wahed Invest and $4.5 million in Expensya.
E-commerce still remains prevalent accounting for 11 per cent of all deals, followed by Transport and Delivery, which was the third most popular industry in terms total deals in 2018, accounting for 10 per cent.
Amir Farha, Managing Partner at BECO Capital and one of the investors in Wahed Invest, said: "Regulators are taking a more forward-looking approach to FinTech startups and are promoting their own initiatives to foster entrepreneurship. I believe Careem did a great job in helping regulators understand the impact startups can have on their market, which has likely assisted in getting the wider authorities to view startups differently."
Careem received the highest amount of funding by a single startup, raising $200 million in October 2018. The fund raised was the first tranche of its Series F funding round, and was led by existing investors STV, Saudi Arabia's Kingdom Holding, Al Tayyar Travel Group Holding, and Japanese E-commerce platform Rakuten. The company expects to raise over $500 million in its Series F.
The top 10 deals in 2018 account for 65 per cent of total investment amount in 2018, up 2 per cent from 2017. In terms of exits, 2018 has seen 14 startup exits take place across MENA, this marks a decrease of 5 compared to 2017. 4 of the exits in 2018 were by an international acquirer.
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