MENA startup funding down in H1, but not out for the count this year

📉 The first half of 2024 saw a notable decline in total funding.

Wamda reported a 46% decrease, while MAGNiTT noted a 34% slump—splitting hairs isn’t necessary.

The long and the short of it is: funding was down, and pretty significantly.

🔎 Why?

At a regional level, uncertainty due to the war in Gaza and the potential for military escalation likely contributed to doubts among local and international VCs.

Zooming in on Egypt, the startup ecosystem saw a drastic decline, with 33 startups raising only $83 million, an 80% drop from last year, driven by economic crises and high inflation.

🌪️ The positive spin

Despite the downturn, investor activity increased by 33%, and new funds launched surged by 130%. Capital is coming.

Q2 funding saw a slight 5% increase over Q1 (although it was still down 9% compared to the same period in 2023, but let’s not dwell on that).

🔑 Key takeaways

• UAE and Saudi Arabia: Continue to lead in transactions and funding.
• Deal Count: Down 18% with 211 transactions.
• Proptech: Surpassed fintech as the most funded sector with $200 million across 14 deals.
• B2C vs. B2B: B2C model deals declined by 64%, while B2B model deals surged by 153% in H1 2024.
• Female-led Startups: Raised $1.8 million across 15 deals, down from $6 million the previous year.
• Debt Financing: Dropped from 39% of total funding in H1 2023 to 17% this year.
• Series A Startups: Attracted $169 million, with Seed stage financing 52 rounds totaling $131 million.
• Exits: Plummeted by 63%, with only 10 exits.

🔮 Flashforward

Several VCs have launched new funds, pledging billions to invest in MENA tech companies, which fingers crossed will boost investment volumes in the second half of the year.