Investors are watching global economic events… A 66% decline in financing startups in the Middle East

Pioneer Investors – Startups in the Middle East and North Africa region reaped $103 million which was distributed over 22 deals in January. Comparing to the same period in previous year, when the financing was amounted to $299 million, there is a decrease of 66%.

The value of financing directed to this tranche is decreased by 17% comparing to the previous month, which indicates investors are being more caution about global economic events.

The total number of deals witnessed a sharp decrease of 73%, comparing to 81 deals recorded in January 2022.

According to the figures published by the Wamda Report on Entrepreneurship and Emerging Investments, the UAE is ranked as first in terms of the number of deals concluded, since the proceeds of financing raised by startups are over than $92.6 million that distributed over 12 deals, which constitutes 90.6% of the total financing proceeds.

Egypt ranked as second by a large margin, with total financing amounting to $3.45 million, distributed over 3 deals that were concluded as part of a $3 million debt financing round.

The Kingdom of Saudi Arabia came in third place, with financing proceeds amounting to $3.3 million and distributed over two investments, the bulk of which went to the cloud kitchen operator “My Kitchen”, which was able to attract $2.3 million in a pre-seed funding round.

The remaining 3% was distributed to some startups in Iraq, Morocco, and Qatar.

The financial technology services sector known as “FinTech” retained in first place in terms of total investments, as the sector accounted for 67% of the value of deals. However, in terms of the number of deals, the performance of the financial technology sector was close to that of the food technology sector.

The virtual world technology sector “Metaverse”, the clean technology sector calls “Clean Tech” and the food technology sector “Food Tech” have accordingly attracted the largest financial proceeds which were continually supported by the investors in food ordering platforms.

10 out of 22 concluded deals witnessed foreign direct investment in the first month of the new year, while 12 deals attracted regional investors.

In January, the entire investment went to startups founded by men, which means none of the invested startups were founded or co-founded by women.

The momentum continued over the past month, which witnessed many acquisitions and mergers, as the Egyptian company GB Arena acquired the Tunisian company Galactic in a stock exchange deal worth $15 million.

UAE-based Hot Disk acquired Spanish company Yadoo, Pune Cyber acquired DTS Solution, and Astra Tech acquired (UAE-based Astra Tech) Botim.