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MENA Startups Raise $2.3 Billion In 2024, UAE Leads With $1.1 Billion

The startup ecosystem in the Middle East and North Africa (MENA) region demonstrated notable resilience in 2024, despite a 42% year-on-year decline in overall funding, according to the latest report from Wamda. MENA startups secured $2.3 billion in investments, with the UAE leading the way, raising $1.1 billion across 207 startups. The region also saw an increase in deal volumes and sectoral diversity, highlighting the maturing nature of the ecosystem.

Key Facts

  • Despite a significant drop in total funding, deal volumes rose by 3.5%, with 610 deals closed in 2024.
  • Saudi Arabia followed the UAE, raising $700 million across 186 deals, while Egypt secured $334 million in 84 deals.
  • Oman made a notable leap, climbing from 10th place in 2023 to 4th in 2024 with $41.5 million raised.
  • GCC countries led the funding with Oman, Bahrain, and Kuwait securing investments in smaller yet growing startup ecosystems.

GCC Leads The Way

The Gulf Cooperation Council (GCC) countries emerged as the highest-funded in the region. Oman saw significant growth, while Bahrain and Kuwait secured $29 million and $22 million, respectively. Smaller ecosystems like Jordan, Qatar, and Lebanon also showed promising development, with Jordan raising $15 million, marking a notable increase from $9 million in 2023.

Sectoral Insights In The UAE

In the UAE, three sectors dominated funding: fintech, Web 3.0, and proptech. Fintech led with $265 million raised across 47 transactions, followed closely by Web 3.0 startups with $255 million raised in 19 deals. Proptech attracted $197 million across 13 transactions. The UAE’s growing interest in these sectors aligns with the country’s global appeal, diverse population, and wealth.

Fintech Dominates Regionally

Fintech remained the most funded sector in MENA, securing 30% of the total investment, amounting to $700 million. In Egypt and the UAE, fintech led the charge, while in Saudi Arabia, software-as-a-service (SaaS) startups attracted the most attention. Web 3.0 and e-commerce startups followed closely, with $256.8 million and $253 million raised, respectively.

Early-Stage Startups Lead Investments

Early-stage startups dominated investments in 2024, attracting over $1.2 billion across 300 startups from pre-seed to Series A stages. Later-stage startups saw $332 million in funding across 10 deals, while only two startups secured pre-IPO funding, raising $143.3 million.

Investor Shifts To B2B Model

A significant shift in investor appetite was observed, with a preference for B2B models. B2B startups raised $1.2 billion across 325 companies, while B2C startups secured $717 million. Startups operating in both B2B and B2C models, as well as direct-to-consumer (D2C) startups, received the remaining investments.

Challenges And Opportunities

The MENA region’s startup ecosystem faces challenges, particularly with the decline in funding for foodtech and the underrepresentation of female-founded startups, which raised just $27.6 million, although this marked an improvement from 2023. However, the growing diversity in sectors and investor interest in B2B models present opportunities for continued growth.

UAE Embarks On 2031 National Investment Strategy To Boost Annual Foreign Inflows

The UAE has set a bold vision with its National Investment Strategy 2031, targeting an elevation in annual foreign investment inflows from AED112 billion ($30.5 billion) in 2023 to AED240 billion ($65.4 billion) by 2031. His Highness Sheikh Mohammed bin Rashid Al Maktoum highlighted the strategy’s goal to transform the UAE into a premier global investment hub. Aiming to swell the foreign direct investment stock from AED800 billion to AED2.2 trillion, this strategy focuses on key sectors: industry, financial services, transport and logistics, renewable energy, and telecommunications.

Key Initiatives And Economic Contributions

The approved strategy includes 12 new programs and 30 distinct initiatives, such as the Financial Sector Development and the Investment Offices Promotion Incubator. Currently, foreign direct investment contributes significantly to the GDP, with predictions to increase its share to over 30% of the total investments by 2031.

Dive deeper into the global market shifts in Wall Street Tumbles Amid Trade Tensions.

Technological And Digital Advancements

The strategy outlines the UAE’s vision to become a digital economy powerhouse by 2031, intending to enhance the digital economy’s current contribution to GDP from 9.7% to 19.4%. The Industrial Technology Transformation Index (ITTI) will also play a pivotal role in gauging technological advances and sustainability practices.

The introduction of a remote work system and the launch of the National Green Certificates Program further highlight the UAE’s efforts to harness global talent and promote sustainable development.

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