Region’s leading data platform tracking the region’s startup ecosystem, MAGNiTT today released their annual 2018 MENA Venture Investment Report, which provides an in depth analysis of startup funding across the Middle East and North Africa. The report highlights strong growth with a record number of transactions and an increase in total funding across MENA-based startups, up 31% from 2017.
Philip Bahoshy, MAGNiTT founder and CEO, indicates “this is an extremely positive signal. 2018 saw more international investors enter the foray than before, new accelerator programs created the region, multiple government initiatives spurring innovation and established regional Venture Capital firms closing out new funds to deploy further capital.” Another key highlight Bahoshy notes is “as startups mature and grow, 2018 has seen more later stage investment deals at Series B and beyond than ever before and we expect this trend to continue into 2019 as startups scale to get closer to exits.”
Year 2018 saw 366 investments in MENA-based startups, which amounted to $893m of total funding. This is an excellent indicator for the ecosystem, with a 31% increase in investment compared to 2017, in which $679m was invested. The number of deals remained healthy at a record high, up 3% compared to 2017, showing continued appetite in startups from the region.
The UAE has maintained its dominance thanks to continued government support, corporate venture interest and growing investor appetite for startups. 30% of all transactions were made in to UAE-headquartered startups in 2018, while it also accounted for 70% of total funding.
However, the landscape continues to evolve. Egypt was the fastest growing ecosystem in 2018 – receiving the 2nd highest number of deals at 22% of all deals, up 7% from 2017. Lebanon, ranked 3rd by number of transactions with 10%, saw the highest fall in deal flow compared to 2017, with a 4% drop.
FinTech accounted for 12% of all deals in 2018. E-commerce still remains prevalent accounting for 11% of all deals, followed by Transport & Delivery, which was the third most popular industry in terms total deals in 2018, accounting for 10%.
The year also witnessed the major exit of TPay in Egypt, which brought about the first Dragon Startup, a startup whose exit pays back the full fund size of a VC.
2018 saw a 5% increase in the number of Institutions and Angel Groups making investments in MENA-based startups compared to 2017 and among all 30% of all entities that invested in MENA-based startups were international investors.
The top 10 deals in 2018 account for 65% of total investment amount in 2018, up 2% from 2017. And, Careem received the highest amount of funding by a single startup, raising $200m in October 2018. In terms of exits, 2018 has seen 14 startup exits take place across MENA, this marks a decrease of 5 compared to 2017. 4 of the exits in 2018 were by an international acquirer.