Investment Slowdown in MENA Startups Ecosystem in H1 2024

Pioneer Investors – In the first half of 2024, startups in the Middle East and North Africa (MENA) experienced a noticeable investment slowdown. The total funding reached $882 million, indicating a significant decline from previous years.

Investment Performance in June 2024

In June 2024, 38 startups raised $116 million, a 59% drop from May 2024, but a 182% increase compared to June 2023. The UAE led with $82.5 million, Egypt with $15 million, and Saudi Arabia with $13.5 million.

Sector Investment Breakdown

• Fintech: Dominated with $38 million across 10 deals.
• Construction: Significant boost from Tenderd’s $30 million deal.
• Proptech: Continued growth with $19.6 million across three deals.

H1 2024 Analysis

Total investments in H1 2024 were $882 million, a 46% decrease from the same period last year. Political and economic conditions, including conflicts in Gaza, impacted investment flows.

Geographical Performance

• UAE: Largest share with $455.5 million in H1 2024.
• Saudi Arabia: $300 million in investments, a decrease from $554 million.
• Egypt: 33 startups raised $83 million, an 80% decrease from last year.
• Morocco: Gained traction with $12.5 million across six startups.

Challenges and Opportunities

Despite the downturn, there are significant opportunities, especially with new investment funds expected in Q3 2024. Increased investor confidence and portfolio diversification are anticipated to boost activity.

Government Initiatives and Support

Governments continue to support startups through:

• Incubators and Accelerators: Providing technical and administrative support.
• Legislation: Improving business environments to attract more investments.
• Funding: Offering financial programs and grants for innovative projects.

Sector Trends

• Series A Funding: Four startups raised $45 million.
• Seed Stage Funding: Five startups raised $27.3 million.
• Pre-Seed Funding: Eight startups raised $3 million, with grants totaling $140,000.

H2 2024 Outlook

The first half of the year showed a slowdown, but expectations for H2 2024 are optimistic. New investment funds and increased government support are likely to stimulate growth. Startups need to adopt flexible and innovative strategies to overcome current challenges and attract necessary investments for growth and sustainability.

Conclusion

While the first half of 2024 has seen a decline in investments for MENA startups, the potential for growth remains high. Strategic initiatives, government support, and new funding opportunities are expected to drive the market forward in the latter half of the year.