Saudi Arabia Emerges as Top Destination for Venture Capital Funding in MENA
Saudi Arabia has solidified its position as a top destination for venture capital funding in the Middle East and North Africa (MENA) region. In December, the region witnessed an unprecedented influx of startup funding, amounting to $1.15 billion. This marks an 825 percent increase year-on-year and a 55 percent rise month-on-month. The UAE-founded and now Saudi-headquartered fintech, Tabby, was responsible for $700 million of this sum through a debt round. Excluding this substantial debt round, MENA startups raised $456 million in December alone, an 18 percent increase on November and a 253 percent rise on the same month of 2022. Overall, in 2023, startups in the region secured $3.98 billion across 498 deals.
Record-Breaking Influx of Startup Funding in December
The record-breaking influx of startup funding in December 2023 is a positive sign for the startup ecosystem in the MENA region. The $1.15 billion in funding in December represents an 825 percent increase year-on-year, indicating strong investor interest in the region’s startups. This surge in funding is also reflected in the number of deals, with 60 transactions recorded in December, a significant increase from the previous month. The increase in grants and the graduation of startups from accelerator programs further contributed to the growth in deal-making activity.
Fintech Dominates as Key Sector for Funding
Fintech emerged as the dominant sector for venture capital funding in the MENA region. With 25 deals exceeding $1 billion in funding, including Tabby’s debt round, fintech startups attracted significant investor interest. Other sectors like health tech, educational tech, logistics, and mobility also saw substantial funding rounds. However, it is worth noting that funding was skewed towards male-led startups, with less than 1 percent of deal value going to mixed founding teams or female-founded startups. This highlights the need to address gender diversity in the startup ecosystem.
Saudi Arabia Maintains Lead as Top Destination for Venture Capital Funding
For the second consecutive month, Saudi Arabia maintained its lead as the top destination for venture capital funding in the MENA region. The country’s thriving startup ecosystem and its ability to attract large-scale funding have been instrumental in its success. Saudi Arabia’s position as a top destination for venture capital funding is further solidified by the large-sized transactions from companies like Tamra and Tabby. Egypt ranked as a distant second, and the UAE came in third in terms of venture capital funding.
Dutch Travel Tech Company Jedo Expands to Saudi Arabia
Dutch travel tech company Jedo has made a significant move towards global expansion by acquiring the Jump-in app, marking its entry into the Saudi market. The acquisition is a strategic step for Jedo as it strengthens its market presence in the Kingdom and expands its user base. By integrating the unique capabilities of the Jump-in app, Jedo plans to digitize trip planning by using artificial intelligence technologies. This approach aims to offer more personalized and engaging travel experiences to users. Jedo’s partnership with local tourism authorities in Saudi Arabia and collaboration with key stakeholders like Plug and Play will further enhance its position in the Saudi market. The acquisition of the Jump-in app is expected to play an instrumental role in shaping Jedo’s operational strategies in the Kingdom.
Analyst comment
Positive news. The record-breaking influx of startup funding in December indicates strong investor interest in the MENA region’s startups. Fintech dominates as a key sector for funding, but there is a need to address gender diversity. Saudi Arabia maintains its lead as the top destination for venture capital funding. The acquisition of the Jump-in app by Dutch travel tech company Jedo is a strategic move for global expansion and aims to offer more personalized travel experiences. Overall, the market is expected to continue growing and attracting investments.
