Why Is Global Investment in MENA FinTech Skyrocketing?

MAGNiTT, a top venture capital data platform, just released its H1 2024 MENA FinTech Venture Investment Report. This is right before the big 24 FinTech summit happening this week. The report gives us a good look at how the FinTech scene is doing across the MENA for the first half of this year.

So, in the first six months of 2024, the FinTech industry raised about US$186 million across 50 deals. That’s almost the same as last year, just a slight 3 percent drop in non-mega funding, and the number of deals dropped by 2 percent. Even though there's been a slight dip, FinTech is still one of the top sectors in the MENA region, grabbing 24 percent of all venture investments in H1 2024. What's interesting is that from 2020 to 2023, the region saw a massive 650 percent growth in FinTech funding.

Now, looking closer at the MENA region, the UAE was the leader in FinTech funding in the first half of 2024. It captured 39 percent of the region’s funding, which is a big jump from 25 percent in H1 2023. Even though the UAE's funding actually decreased by 36 percent compared to last year, it still led the way thanks to a 15 percent increase in the number of deals, especially in early-stage funding rounds like Seed and Series A.

Saudi Arabia (KSA) also made some big moves this year. It saw an incredible 391 percent increase in FinTech funding compared to the same period last year, making it a major player in the region. This was largely due to three huge deals with Moyasar, Abyan Capital, and SiFi, which made up 74 percent of all FinTech funding in KSA for H1 2024.

Philip Bahoshy, the CEO of MAGNiTT, commented on how investor patterns are shifting across the Middle East, Africa, and Southeast Asia this year. But one thing is clear: FinTech is still leading the charge in these emerging markets, reflecting the global investor appetite for this sector. Even with a global slowdown in venture investments over the past couple of years, interest in FinTech remains strong. In MENA, FinTech is a major focus for regulators, central banks, and big corporations. Events like ADGM’s FinTech Week, DIFC’s FinTech Summit, and now KSA’s 24 FinTech event are really important for raising awareness, shaping policy, and supporting FinTech startups. These events highlight the enormous potential of FinTech in the region.

Philip is also set to give a keynote speech at the 24 FinTech event on September 3rd, where he’ll talk about the state of venture capital in the region, focusing specifically on FinTech.

Another interesting point from the report is that the number of unique investors in FinTech jumped by 31 percent year-on-year, with a huge 93 percent increase in international investors. Most of these international investors came from the USA, Singapore, Hong Kong, and the UK, showing strong global interest in MENA's FinTech market. 500 Global stood out as the most active investor in MENA FinTech startups, showing their strong commitment to fostering growth in the region.

In terms of sectors, Payment Solutions remained the top dog, grabbing 44 percent of all FinTech funding in MENA for H1 2024. This was helped by four of the top ten deals during this period. Interestingly, Financial Research and Consultancy made a big leap, moving up seven spots to become the third most funded sector, thanks in part to Abyan Capital's US$18 million deal in KSA.