MENA Startups Secure $282 Million in September 2024, Marking Significant Recovery

Middle East and North Africa (MENA) — The investment landscape in the MENA region is showing robust signs of recovery, with 63 startups collectively raising $282 million in September 2024. This marks a substantial 234% increase month-on-month and a remarkable 607% rise year-on-year. Debt financing constituted just 12% of the total investments, indicating strong equity confidence in the region's startups.

The largest funding round was secured by Saudi mobility startup SHIFT, which raised $82.8 million. Close on its heels, Syarah, an online car marketplace, garnered $60 million in a Series C round, with $20 million financed through debt.

Saudi Arabia Reclaims Top Spot

After a two-month hiatus from leading the region's funding charts, Saudi startups surged back to the forefront. In September, Saudi ventures attracted over 60% of the total regional investment, amassing $170.8 million across 23 deals. The United Arab Emirates (UAE) secured the second position, with 12 startups raising $73.8 million. In contrast, Egyptian startups lagged, with 13 companies securing a total of $25 million.

Fintech Continues to Dominate

Investor confidence in fintech remains strong, with the sector maintaining its position as the top-funded industry for the fourth consecutive month. Fourteen fintech startups attracted an impressive $102.5 million. The mobility sector secured the second spot, largely propelled by SHIFT's significant funding round.

In terms of deal volume, the e-commerce and edtech sectors showed notable activity, each closing nine deals and raising $63 million and $4.35 million respectively. Additionally, eight Software as a Service (SaaS) providers attracted $10 million in investments.

Accelerators and Early-Stage Investments Shine

Thanks to demo days by Flat6Labs in Jordan and Saudi Arabia, accelerator investments saw a boost, with 17 startups receiving a collective $2 million. Early-stage startups continued to attract significant attention, securing $102 million across 15 seed deals and $5 million in pre-seed funding for seven startups. Notably, two later-stage investments included Paymob's $22 million Series B round and Syarah's $60 million Series C.

Business-to-consumer (B2C) startups led in investment value, attracting $93.7 million across 24 companies. Business-to-business (B2B) startups weren't far behind, with $84.6 million invested in 28 companies. Startups operating in both domains received a combined $100 million across five deals.

Gender Disparity in Funding

Female-founded startups continued to face challenges, with only six such startups raising a mere $583,000, primarily through grants. In contrast, male-founded startups dominated the landscape, with 49 companies raising $260 million. Startups co-founded by both men and women secured $21 million across seven deals.

Quarterly Insights: Resilience Amid Regional Tensions

Despite escalating regional tensions, particularly following the Iranian missile strike on Tel Aviv, the MENA startup ecosystem demonstrated resilience. In Q3 2024, 136 startups secured a total of $727 million, marking a 192% increase compared to the same period last year and a 60% rise from the previous quarter.

Top Performers

Sector Highlights

Fintech reclaimed its top-funded status, attracting $355 million across 38 transactions—a 247% quarter-on-quarter increase and a 936% year-on-year surge. The Web3 sector followed, raising $99 million through five deals, while e-commerce startups secured $86 million across 17 deals.

Early-stage investments remained a favorite among venture capitalists. Seed-stage startups led with $218 million raised across 32 deals, followed by Series A rounds totaling $160 million across 14 startups.

Outlook for Q4

Despite global uncertainties, the MENA region's investment activity is expected to maintain its upward trajectory into Q4 2024. The surge in oil prices benefits oil-rich Gulf Cooperation Council (GCC) countries, home to major venture capitalists and investment funds. This local investor confidence is likely to sustain the momentum, with significant impacts anticipated to become evident in 2025.