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Startups in MENA raised well over a billion dollars in 2020

MENA startups raised over a record $1 billion of investment in 2020, indicating a 13% increase year-on-year

The UAE, Egypt, and Saudi Arabia, accounted for 68% of total deals E-commerce and fintech retained top spots by the number of deals Saudi recorded a 35% year-on-year increase in the number of investment deals in the technology startup sector

MENA startups raised over a record $1 billion of investment in 2020, indicating a 13% increase year-on-year.

Roberto Croci, managing director of Microsoft for Startups MEA, said: “The UAE has all the ingredients to become a vibrant hub for start-ups, underpinned by effective public-private partnerships and fast regulatory decision-making.” 

The three main innovation hubs, the UAE, Egypt, and Saudi Arabia, accounted for 68% of total deals with the UAE ranking first, garnering 56% of all capital deployed across MENA via 129 deals and $579 mn in funding in 2020. 

E-commerce and fintech retained top spots by the number of deals, with the two sectors together representing 24% of all deals in 2020. Similarly, the amount invested in healthcare startups more than tripled, increasing by 280% to $72 mn.

The recently released Magnitt report ‘2021 Emerging Venture Markets’,  ranked Egypt second for both total funding with $179 mn (up 31%) and number of deals (down 10%) and fast-growing Saudi at third place for total funding with $152 mn (up 55%), with the number of deals seeing the highest increase in MENA, up by 35%.

Saudi tech startups

Saudi recorded a 35% year-on-year increase in the number of investment deals in the technology startup sector last year, according to the aforementioned Magnitt report.

It found the Kingdom accounted for 18% of the 496 investment deals across the MENA in 2020.

In the first half of 2020, $725 mn of funding was raised, an increase of 29% compared with $563 mn in H1 2019. 

In H2, $306 mn was raised, a decrease of 35% compared with the last six months of 2019.

Pre-seed investments, deal sizes of less than $100,000, represented 47% of transactions in 2019, while in 2020 it fell to 27%. This revealed that in 2020 investors went after bigger-ticket Series A investments or deals between $100,000 and $3 mn.

Funding for the food and beverage and healthcare startups tripled to $122 mn and $72 mn, respectively.

In its predictions for 2021, Magnitt forecasted Saudi will overtake Egypt in the total number of investments and total capital deployed and become second only to the UAE in the rankings.