As per a recent Wamda survey, companies in the MENA area raised USD 105 million through 44 agreements in the past month. Investments have significantly slowed down as a result. The figures for July show an 84% decrease year over year and a 68% decrease month over month. Even if July's figures don't include Kitopi's USD 415 million Series C round from last year, they still show a more than 50% decline.
Compared to June, the number of agreements dropped by over a third nearly halved since July 2021. Although the pace of investment proposals tends to slow down in the summer, this pattern reflects a broader worldwide downturn.
Fintech startups dominate in MENA:
The financial industry continues to contribute the most, and the UAE-based company Yap's USD 41 million expansion round is part of this. The Yap deal is responsible for 50% of all investments made in the UAE. With USD 53 million received over eight agreements, Yap's huge round catapulted fintech to the top of the charts regarding capital value.
Low FDI rates:
Less FDI is being invested in, with only 12 companies obtaining foreign capital, which reflects the general downturn. In eight transactions, US investors took part. In terms of agreements, Lebanon's Innovation Hub was perhaps the most active investor, with financiers from the UAE and Saudi Arabia engaging in 11 deals each.
Saudi Arabia's startup funding has been rising rapidly, but values fell by 55% in July compared to last month. UAE startups had a 73% decline.
With a 72% upturn, Egypt was the only country to have its investment level climb. Cartona's USD 12 million Series A round had a significant role in this.
The Energy Innovation Hub's accelerator, which awarded 13 firms a USD 12,000 grant, mainly in the cleantech and environmental areas, contributed significantly to an uptick in development in Lebanon.
However, the situation is not limited to the MENA area; as per CB Insights, the second quarter saw a 23 percent fall in the worldwide venture capital industry owing to economic uncertainties.
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