MidEast start-ups pull in $704m in 2019

Dubai: Investments in start-ups in the Middle East and North Africa rose 13 per cent to $704 million last year as more investors clambered on board seeking such opportunities. In total, there were 564 investments in regional start-ups during the year.

The value excludes the mega deals of Careem and Souq, according to the latest report by Magnitt, a data platform for start-ups and investors. Amazon had acquired Souq.com earlier, but rebranded it to Amazon.ae last year. Meanwhile, Dubai start-up Careem was acquired by Uber in early 2019 for $3.1 billion.

The UAE took in the most funding (60 per cent), while Egypt accounted for the maximum number of deals in the region (25 per cent). Start-ups in the UAE benefited from government support, corporate venture interest, and growing investor appetite for start-ups.

At the time of the Careem acquisition, experts said that the deal will put the region’s start-up sector in the international investor spotlight and serve as a catalyst to attract more funds.

Institutional backing

Magnitt’s 2019 Mena Venture Investment Report said that for the region as a whole, there’s been a spike in interest from international investors, with 25 per cent of entities investing in regional start-ups in 2019 being from outside the region.

The financial technology (fintech) sector remained the most active one based on number of deals, having overtaken e-commerce in 2018 as the category attracting the most deals. In terms of the value of funding, however, the delivery and transport industry accounted for the largest funding as bus transportation start-ups such as Swvl and trucking start-ups such as TruKKer raised sizable funds.

Magnitt said that other markets in the Middle East are beginning to emerge as hubs for start-ups. These include Saudi Arabia, the fastest growing start-up territory across the Middle East and North Africa.