Startups in Mena(Middle East and North Africa) raised $35.6 million in June 2023 across 45 deals, pushing the half year funding total to $1.6 billion.
While May was a bounceback month for investment in the region, June has been less dazzling, marking a 92 per cent decrease month-on-month.
However, if we exclude Tabby’s $350 million debt financing round announced in May, then this monthly decline falls to 62.5 per cent.
On a broader scale, B2C startups bagged the largest chunk of funding at $1.4 billion, while B2B startups attracted the highest number of deals at 113 worth $165.3 million, a dramatic drop compared to the $979 million raised by B2B startup in H1Y22. This can partially be attributed to the fall in valuations and investor desire to focus on startups with more viable and sustainable routes to profitability.
The first half of 2023 saw a total of 24 exits in Mena’s startup ecosystem, down from 34 recorded in the same period last year.
A couple of mergers were recorded in the facilities management sector, including Egypt’s Greek Campus’ with MQR and Saudi Arabia’s The Space with Vibes.
Also, three global startups were acquired by Mena-based companies, with the most prominent one being that of a US-based game developer Scopely, acquired by PIF-backed-Savvy Games for $4.9 billion.
Saudi Arabia ranked first in terms of the funding value with $25 million across 12 rounds. UAE was a distant second, with its startups attracting $6 million spread over 20 rounds.
Egyptians startups were the third largest recipients of capital thanks to Egypt’s trucking marketplace Trella’s $3.5 million round.
Sector-wise it was fintech that attracted the most number of deals with seven startups raising $3 million, but it was the foodtech space that secured the most funding with just over $20 million raised across four startups, accounting for 56 per cent of the total raised. Other sectors that gained investor attention were logistics, e-sports and mobility.
Late-stage venture capital activity witnessed a major slowdown, as well-capitalised startups continue to be frugal with spending and conserve cash amid a tighter fundraising environment.
Seed and pre-Seed rounds were not insulated from the funding crunch. In fact, June’s fundraises were dominated by grants and accelerator funding and it was due to this that nine female-founded startups managed to secure investment, compared to just one in May.