Saudi Arabia becomes Mena’s top market for venture capital funding with $1.38bn in 2023
Saudi Arabia has become the top market for venture capital funding in the Middle East and North Africa for the first time, attracting more than $1.38 billion of investment in 2023, according to a report.
The biggest Arab economy recorded a billion-dollar figure for the second consecutive year, as venture capital investments surged by a third annually, Magnitt’s report said.
This was driven by four mega deals, or investments worth at least $100 million, across the financial technology and e-commerce sectors, it said.
Funding in the UAE, the former leader in Mena, declined 45 per cent annually to $691 million, Magnitt said.
However, the Arab world’s second-largest economy still remained the region’s top destination for deals with 158 – a 9 per cent fall annually – compared with the kingdom’s 125, an annual decline of about 20 per cent.
The fourth quarter of 2023 also ended up as the best quarter yet, with the mega rounds of Saudi Arabia-based buynow, pay later platform Tabby and FinTech Tamara – helping both secure unicorn status, or start-ups with a valuation of $1 billion or more.
“Saudi Arabia has seen five consecutive years of growth. All indications from government, investment appetite and startup migration to the kingdom indicate a continued growth as the leader in the region,” Magnitt said in the report.
Saudi Arabia and the UAE are aggressively promoting and developing their technology ecosystems, which are key pillars of their digital-focused agendas to prepare for the economy of the future.
They have implemented a number of initiatives to push forward with this agenda, seeking to support the growth of the start-up network.
These include mentoring, providing access to the market and global investors, and allowing start-ups to tap into the technological infrastructure provided by the government and private companies.
“Saudi Arabia and the UAE emerged with resilience,” Philip Bahoshy, chief executive of Magnitt, said.
Egypt, the Arab world’s most populous nation, remained at third place in investments with $378 million, down 30 per cent. Morocco moved four spots up to fourth as funding nearly tripled to $81 million, while Bahrain fell one spot to fifth as investments slid 82 per cent to $44 million.