eighth January at 9:30 am Dubai
VC investments in rising markets such because the Middle East and North Africa (MENA) plummeted by over 40% in comparison with 2023, in response to a brand new report. The information mirrors the broader world pattern of diminished VC funding within the final two years, particularly for non-AI corporations.
The whole raised throughout the markets surveyed was $9.1 billion in 2024, a 41% decline year-on-year (YoY). Furthermore, there was a 20% drop in deal exercise YoY, with the variety of offers falling to 1,527. However, there might quickly be indicators of restoration as rates of interest decline globally, bringing with it decrease inflation, whereas early-stage investing confirmed resilience.
The developments are outlined within the 2024 Venture Investment Report from MENA-based analysis group MAGNiTT. The report covers Aggregate Emerging Venture Markets (EVMs), taking a look at VC investments within the Middle East, Africa, Southeast Asia, Türkiye, and Pakistan.
In the MENA area, startups raised $1.9 billion in 2024, a 29% decline yearly, however this was a small decline when set in opposition to that seen in Southeast Asia (45%) and Africa (44%).
Plus, funding ranges in 2024 have been nonetheless increased than 2020 ranges, previous to the 2021 and 2022 increase years, which means the area continues to develop within the enterprise house.
There was a 7% YoY improve in deal depend (571) and the variety of traders elevated by 18% (to 475).
And 47% of all investments have been within the $1-5M vary, signaling a shift to early-stage investments. However, MENA skilled a major decline in late-stage offers.
Across MENA, Africa, Southeast Asia, Türkiye, and Pakistan, Fintech continues to place in a robust displaying, raking in $3.9 billion in funding in 2024, reflecting that Financial Technology is doing effectively in rising markets the place extra developed monetary providers are skinny on the bottom.
The report famous that this presents a possibility for M&A exercise throughout geographies inside the area.
There was a predictable break up the place worldwide traders targeted extra on late-stage offers, reminiscent of Insider’s $500M spherical and Tyme’s $250M Series D. These sorts of traders made up 53% of the 475 traders that backed startups within the area. Meanwhile, native traders tended to stay to early-stage.
This is all within the context of worldwide exits dipping by 32% YoY to simply 94 in 2024, and late-stage capital changing into more durable to return by as public markets stayed closed.
Philip Bahoshy, CEO at MAGNiTT, commented in a press release: “We anticipate price cuts to start boosting capital availability inside the subsequent 6-9 months, paving the way in which for a stronger funding surroundings in 2025. He mentioned that total, 2024 was “in all probability the underside of the curve” when it comes to the funding downturn.
He added that the UAE, Saudi Arabia, and Qatar noticed “elevated deal exercise yr on yr” regardless of a slowdown in whole capital deployment. The whole variety of traders additionally elevated considerably in MENA, displaying that traders, particularly worldwide ones, might have growing confidence within the area’s startups.
