UAE, Egypt & Saudi Arabia top investments in H1 2021

MAGNiTT, one of the leading data platforms providing research and insights across emerging venture markets has released its suite of H1 2021 reports, which take a deep dive into the fintech, e-commerce, food & beverage, delivery & transport, and healthcare sectors.

Fintech led the way with USD 222 million invested into the sector in H1 2021 across MENA, Pakistan and Turkey. The first half of the 2021 also marked the highest amount of Fintech funding raised within a period of six months in the MENA region. The UAE and Saudi Arabia accounted for 60 percent of total MENA funding into Fintech during this time.

The overall findings of the reports showed record levels of Venture Capital (VC) investment into the Middle East and North Africa (MENA) region, as well as Pakistan and Turkey, with USD 3.47 billion deployed into these emerging markets in the first half of 2021. Startups in MENA attracted more than USD 1.2 billion in funding, a 64 percent YoY growth and a 12 percent increase from USD 1 billion raised in 2020.

Within MENA, the UAE secured the largest share of transactions in the first half, accounting for 26 percent of total deals in the region, valued at USD 755 million. Egypt was a close second with 24 percent of the share and USD 166 million in investment, followed by Saudi Arabia which stood at 21 percent and USD 168 million in investment. The difference between the UAE and third ranked Saudi Arabia went from 41 deals in 2020, as a whole, to just 11 deals in the first half of 2021, closing the gap between the top three markets. The difference between the UAE and Saudi Arabia went from 41 deals in 2020, as a whole, to just 11 deals in the first half of 2021, closing the gap between the top three markets.

Interest from international investors also appeared to grow in the region, with MENA capturing the attention of a larger number of global VCs. 31 percent of MENA-based transactions were made by investors based outside of the region, a 4 percent increase from 2020. This was primarily driven by a maturing ecosystem, which has led to a significantly larger number of VC firms setting up regional offices and deploying capital into MENA startups.

Commenting on the shift in MENA investments, Philip Bahoshy, Founder & CEO of MAGNiTT, added, “While the overall investment figures have risen, we saw a dip in the number of deals secured by early-stage startups. This is due, in part, to the inactivity caused by COVID-19 restrictions in regional accelerator programmes that proved to be essential in facilitating ecosystem growth and interaction. Without the same level of support from incubators and accelerators over the last year, early-stage startups haven’t been able to gain enough exposure to potential investors, and the majority of capital is now being raised by growth-stage startups.”