Serrari Group

Start-up investments in the Middle East and North Africa (MENA) region saw a significant decrease in the first half of 2024, amounting to $882 million. This represents a 46% drop from the $1.6 billion raised in the same period in 2023, as reported by Wamda and Digital Digest.

The ongoing conflict in Gaza has introduced substantial uncertainty, prompting many regional and international venture capital firms (VCs) to adopt a cautious approach. This hesitancy has notably impacted the overall investment climate, with many investors opting to wait for more stable conditions.

Despite the sharp overall decline, the reduction is less severe when excluding last year’s debt financing, with a year-on-year decrease of about 12%.

Monthly Investment Patterns

June 2024 presented a mixed picture for MENA start-ups, which raised $116 million. This figure is 182% higher than June 2023 but 59% lower than May 2024, highlighting the month-to-month volatility in investment activities.

The United Arab Emirates (UAE) stood out in June, with start-ups securing $82.5 million across 15 transactions. Notably, the month did not feature any large-scale deals, with the highest amount raised by a single start-up being $30 million by Tendered.

Sector Insights: Fintech Leads

The fintech sector led the way in June, attracting $38 million across 10 deals. This indicates strong investor interest in financial technology solutions, despite broader market challenges.

Future Outlook

As the second half of 2024 begins, the investment outlook for MENA start-ups remains uncertain. Geopolitical tensions continue to weigh heavily on investor confidence. However, sectors like fintech offer some optimism due to their demonstrated resilience and potential for growth.

Industry experts believe that resolving regional conflicts and stabilizing the geopolitical climate will be crucial in reviving investor interest and restoring confidence in the MENA start-up ecosystem. Until then, both start-ups and investors are expected to navigate a cautious and unpredictable landscape.

Photo source: Google

By: Montel Kamau

Serrari Financial Analyst

9th July, 2024

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