Last year was the most successful year for the tech startups in the Middle East and North Africa (MENA region). This is in terms of investment. The startups got 270 deals from which they secured an investment worth $650 million. U.A.E alone accounted for 33% of the number of deals and the share of investors. This is according to a new report titled The State of Digital Investments in MENA (2013-2017). It was brought to the public by ArabNet. ArabNet is a media, research and event startup. It focuses on regional entrepreneurship and it collaborates with SME from Dubai.
According to ArabNet CEO and founder Omar Christidis, the U.A.E is still the hub of entrepreneurs in the Middle East region. This is because it represents the highest number of funding, deals, and investors. The findings that came out were based on statistics collected from a total of 52 accelerators and investors across the region. This is especially in Egypt, the U.A.E, Saudi Arabia, Bahrain, Algeria, Morocco, Palestine, Kuwait, Jordan, Lebanon, Tunisia, and Algeria.
The report states that almost 40 new funds launched every year between 2015 and 2016. It adds that 30 new funds launched between 2016 and 2017. Lebanon, Jordan, the U.A.E, Saudi Arabia and Egyptian investors collectively account for 70% of the total funding. Meanwhile, a third of the total investors come from U.A.E. Lebanon is coming up as an uprising funding hub. It has grown its overall share of investors from 7% to 13% in a span of four years that is between 2013 and 2017. In 2017 the country contributed to a quarter of the total new funds.
According to a research carried out, early-stage funds summed up to 47% of the investment community from the region and the rest were growth funds. A quarter of total investment was accounted for by Venture capital and the highly spread type of investors were accelerators. Corporate investors have been the fastest growing group of the investor community in the last five years. There is uneven investor landscape when it comes to the Middle East and North Africa. Lebanon, Saudi Arabia, and the U.A.E are the homes of almost all the region’s capital fund. Egypt is boasting of having many early-stage investors but it does not have growth capital. Kuwait has a promising funding at the growth stage but does not have early-stage funds.
In the last five years, the U.A.E managed to house 298 investments into tech startups. It, therefore, outshined its regional neighbor. Jordan, Egypt, Saudi Arabia and Lebanon gave an average of 155 deals in each country. Comparing the investment value according to the size of the ticket we can say that the most common deals are early-stage deals. The U.A.E received 76% of the totals investments that went into the region in 2017. Investments made in StarzPlay Arabia and Careem was 78% of the total capital invested.