The volume of financing deals for startups grew by 228% in 2021

Pioneer Investors – The first edition of MAGNiTT’s Emerging Markets Report revealed that venture investors are investing in emerging markets to achieve high levels of growth and reap economic benefits. The new MAGNiTT’s report covers the emerging markets in the Middle East, Africa, Pakistan, and Turkey regions.

Commenting on this topic, Philip Bahoshy, founder and CEO of MAGNiTT, which is a leading data platform covering the activity of venture investors in emerging markets, said: “The year 2021 was record-breaking for venture investors and was a crucial stage in the sector’s journey. Despite of the significant challenges caused by COVID-19 pandemic for governments, private sector, and startup environments, the 2021 witnessed a clear activity of investors.”

The report reveals the unprecedented participation of local and international investors in various markets and indicates the registration of new investments worth more than 6 billion US dollars in emerging projects markets. The report also points to FinTech and its leading role in the exceptional growth in the transport, logistics, and e-commerce sectors.

The five most important trends in emerging market markets during 2021:

1. The markets recorded 1,329 investment deals with an exceptional financing volume of 6.8 billion US dollars, with a growth rate of 228% in the volume of financing and 267% in the number of deals compared to 2020.
2. 2020 was as an exceptional year in terms of the number of mega investment deals, with 12 deals worth more than $100 million each, exceeding the value of all mega deals recorded between 2016 and 2020. These deals accounted for 42% of the total capital raised by emerging market markets in 2021.
3. Turkey and the UAE accounted for 44% of the total venture capital investments. Investments in Turkey were prompted by huge deals held by Jettier and Dream Games, worth $1.1 billion; Meanwhile, the Middle East and North Africa region recorded one mega-deal held by an Emirati, Egyptian and Saudi startup.
4. Fintech topped all emerging project markets and was the preferred choice for enterprising investors, indicating the growing importance of innovation and digital transformation in the financial services sector, as it accounted for 21% of all deals and 31% of total project financing. The top five mega deals recorded in Africa, for example, were in Fintech, which was the only sector to record more than 100 investment deals in the MENA region.
5. Startup exits doubled between 2020 and 2021, indicating an increase in financing activity in the region; Where 87 startups announced their exit from the market in 2021 compared to 41 startups in 2020.

For his part, Basil Moftah, General Partner at Global Ventures, said: “The venture investment sector in the region recorded an exceptional performance in 2021, and the business environment in the Middle East and North Africa witnessed a great deal of activity between raising funding and making investment deals. The signs of the sector’s maturity in the region are evident through the unprecedented amounts of financing and the tendency of investors to finance companies in the later stages of their journey, in addition to the increasing completion of various types of deals (from mergers and acquisitions to venture loans) or the increasing number of large funding rounds. These quantitative metrics are based on a growing group of entrepreneurs who provide world-class technology solutions, and continually prove the importance of emerging markets in offering a wide range of rewarding opportunities in the future”.

Bahoshy added: “The real potential of startups lies within the startup markets in several geographical regions, and this has become clearer than ever. This expansion has resulted in emerging regional companies either through business expansion or through acquisitions of companies operating in several other fields or regions. There are some success stories to make it clearer, such as Nigerian health tech company called Helium Health’s acquisition of Qatari company Medi, UAE-based Troker’s acquisition of Troccher in Pakistan, or Phoenix’s acquisition UAE over its Turkish counterpart.

Bahoshy concluded by saying: “Expansion is the most prominent trend in the sector, and we expect that an increasing number of companies will expand their activities across geographical borders in 2022. In light of this, what we are most pleased with at MAGNiTT is to ensure the transparency of information necessary to motivate companies to view the reality of the markets new ones and start new businesses.”