The Arab world is home to a number of success stories in the startup ecosystem; those that have been acquired for millions (or billions) of dollars are a case in point. To be able to push beyond their limits, startup founders need financial advocates on their side. Raising funds and receiving funding become vital to the growth and success of startups.
Turns out, startups in the MENA region have been getting the funds they deserve. In fact, in just the first half of 2019, the total funding in startups in the region spiked 66 percent with a total of 238 investments. Released by MAGNiTT, the MENA Venture Investment Report displays the investments made in regional startups in the first half of the year.
A sum of $471 million was invested in MENA startups in H1. To put things in perspective, the first half of 2018 only saw a cash inflow of $283 million injected into regional startups.
In terms of industries, FinTech received the largest number of investments in H1 2019, accounting for 17 percent of all deals made during the stated period. Next up we've got e-commerce (12 percent) followed by delivery & transport industry (8 percent).
Investments during the first half of 2019
According to the report, 130 institutions invested in MENA-based startups during the first half of the year — a 30 percent increase from the same period during 2018. A total of 30 percent came from foreign investors including Endeavor Catalyst, Vostok New Ventures, and Kingsway Capital.
Regional investors include the likes of UK Lebanon Tech Hub, Choueiri Group, MEVP, and Wamda - among many others.
Which country's startups received the highest funding?
The UAE has retained its spot as the largest recipient of startup funding (in terms of number of deals) during the first half of the year. Over the years, the Emirati country has proven just how serious it is about entrepreneurship and creating an environment where young talent can thrive and succeed.
Earlier this year, the UAE government announced it is granting long-term visas to the World Economic Forum's (WEF) selection of "100 Arab startups shaping the Fourth Industrial Revolution." The announcement came during the World Economic Forum's event in Jordan back in April. Of the top 100 startups, 21 hailed from the UAE.
The UAE is the region's hotspot for startups - and the acquisition of Dubai-based shopping Souq by Amazon is just one example of the promising potential of the nation's startup ecosystem. Uber's acquisition of Careem is another.
However, other countries in the MENA region have witnessed tremendous growth in their startup ecosystem. These include Saudi Arabia, Tunisia, and Egypt.
Dubai-based STEP Group, the company behind Step Conference, launched its very own edition in Saudi Arabia earlier this year. The kingdom has witnessed ever-growing numbers in its small and medium enterprises (SMEs) in recent years. Back in May, the country's Human Resources Development Fund (HADAF) stated that 140,000 people have registered in an e-services program for entrepreneurs and SMEs. Launched in August 2016, the 9/10ths program provides businesses with online platforms that promote and support "entrepreneurship and SMEs as well as helping to create new jobs in innovative ways."
In 2018, the kingdom's Small & Medium Enterprises General Authority (Monsha'at) revealed that the number of registered startups in the country reached 190,000. At the time, this figure accounted for 40 percent of the country's total number of SMEs. From telecommunications to food delivery, fashion, and e-commerce, Saudi startups are here to stay.