Accelerator startups doing better in raising investment in MENA region

Decline in MENA startups seems to continue even with raising $173 million across 51 deals in the month of September. The MoM decline in investment value is about 54% while it’s almost a 50% drop when compared to the same time the previous year.

According to a report by Wamda, the impacts of the global economic crisis, which have led to rising inflation and a decline in IT stocks, are still being felt by investors who have their eyes on the MENA region.

In those 51 deals, TruKKer, Saudi Arabia-based truck aggregator was able to secure one of the biggest funding rounds in 2022 by raising $100 million in a pre-IPO round which was led by Bahrain’s Investcorp. Before that, the company managed to raise $96 million in a Series B round and has raised a total of $320 million to date. This also shows that without the $100 million funding by TruKKer, the amount raised by startups in the MENA region would be lower than $73 million

UAE saw 12 of its startups raise just a little shy of $27 million whereas Jordan was pushed to third spot with the help of liwwa’s $18.5 million debt and equity pre-Series B.

Twenty firms were successful in attracting foreign investment, with US investors taking part in 11 of the deals, while UK investors were the second most active, taking part in seven deals. Egyptian investors were the most active in the region, taking part in 14 transactions, followed by UAE investors, who took part in 11 transactions.

The slowdown in investment was somewhat moderated by accelerators where about 26 startups moved up from pitch competition and accelerators, collecting over $2 million in funding. Flat6Labs was the most active investor with seven startups graduating from its Jordan programme.  It seems investors are more interested towards early-stage funding and writing smaller cheques, making it harder for later-stage startups to raise money for investment.

Another point to notice was that startups founded by men raised the majority of the investment while female-founded startups only managed to get 0.03%.

Fintech businesses received a quarter of all agreements, demonstrating the region’s investors’ continued interest in this industry. Eight healthtech startups, mainly in the mental health and Medtech sectors, claimed second place in terms of the number of deals.