Saudi Arabia continues to dominate the region in terms of venture capital funding during the first nine months of the current year, according to a report by the analytics, data, and insights provider “MAGNiTT.”
Ongoing Dominance
The report shows that the Kingdom ranked “first” in the Middle East and North Africa in venture capital funding for the second consecutive year in the first half of the year. Saudi Arabia raised USD 412 million, down 7% YoY from 2023 levels.
Claps class
Venture capital is a form of financing typically offered to startups or SMEs with high growth potential but whose expansion plans are associated with considerable risks. Financiers focused on this form of investment aim to rake in significant returns by supporting innovative ideas and helping companies that can create “substantial change” in their respective markets.
So what
Singapore topped the list in terms of startup funding in emerging markets, with a total value of approximately USD 1.6 billion, followed by Saudi Arabia with USD 509 million. The kingdom’s success during the period was boosted by growth in the fintech, e-commerce, and retail sectors.
Saudi Arabia and the UAE reported a 7% and 12% YoY growth respectively in terms of the number of deals they secured during the first nine months of 2024.
Some context
The Middle East and North Africa witnessed the least contraction compared to other regions in the first nine months of 2024 despite a 13% YoY decline in total funding in the region to USD 1.3 billion, according to the report.
The number of deals also fell by 6% YoY to 352. However, the number of investors increased by 34% to 386, with a significant hike in the number of foreign financiers channeling funds toward MENA’s startup ecosystem.
Now what
Philip Bahoshy, CEO of MAGNiTT, said in an interview with Asharq that he projects that the fourth quarter will see more deals closed and funds flow into the region compared to the second and third quarters of 2024.
He noted however that funding is not expected to surpass levels recorded during the fourth quarter of the previous year, which saw funding of about USD 100 million.
Bahoshy added that interest rate cuts and geopolitical tensions have fortunately not yet impacted venture capital activity in the region.
