In March, startups in the Middle East and North Africa (MENA) region secured $254 million across 54 deals, marking a significant increase of 186% month on month (MoM) from February’s $88.7 million and a slight uptick of 1.17% year on year (YoY) from the $251 million raised in March 2023.
This surge in investment activity during March reversed the downward trend observed in January and February, bringing the total for Q1 to $429 million from 129 funding rounds. However, it’s worth noting that the ecosystem’s recovery is not complete, as the activity remains 62% lower than the same quarter last year.
The LEAP24 event, held in Riyadh from March 4–7, propelled Saudi startups to the forefront once again, securing a total of $198 million across 25 transactions. Notably, $130 million of this amount was allocated to Salla’s pre-IPO round. Meanwhile, the UAE ranked second with $39 million raised by 12 startups, followed by Egypt in a distant third place with eight startups raising $7 million.
The majority of funding was directed towards software as a service (SaaS) providers, which received $130.6 million across nine deals, surpassing fintech, which saw $40 million across 12 transactions. Additionally, four e-commerce startups secured $18 million.
Excluding Salla’s deal, this month lacked significant funding rounds and later-stage investments. Seed rounds attracted $49 million, while four startups received $38.5 million at their Series A stage. Additionally, 16 startups received grants totaling $1.75 million.
A noticeable trend is the decline in investment directed towards the business-to-customer (B2C) model, which accounted for only $48 million, or 19% of the total investment. Conversely, the business-to-business (B2B) sector dominated, attracting $188 million, representing 74% of total rounds.
As usual, male-led startups secured nearly 90% of the deals, with female-led startups comprising only 0.21% of transactions, while the remaining transactions involved mixed-gender founders.
In March, 11 startups did not disclose their funding amounts. A conservative estimate of $100,000 each was allocated to 10 of them, including Grintafy, 30Med, Seeru, Zameeli, Receiptable, Pharmacy Marts, Talabatcom App, Eesee, Kaskade Finance, and Houmata. Mojo received $1 million for its undisclosed round.
March also witnessed several mergers and acquisitions (M&A) deals, including MBC Group’s acquisition of a 14% stake in Anghami and Egypt’s MNT-Halan’s acquisition of Pakistan’s Advans Microfinance Bank. Additionally, Classera acquired Saudi Arabia’s Expert Solutions, RasMal acquired Pentugram, Mitgo acquired Embedded, and Saudi Arabia‘s T2 acquired Omani data analysis startup Promize.
Furthermore, LEAP24 announced billions of dollars in investment funds, including the $500 million KSA Logistics Fund III launched by Bahrain’s Arcapita Capital, Saudi Arabia’s National Development Fund’s two VC funds valued at $120 million, and the $100 million investment pledged by the UAE’s Gulf Capital and RDIA.
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