MENA Funding Eases in August, Recovery Signs Emerge in September

Investments in the Middle East and North Africa eased in August, with total funding reaching US$83 million across 30 rounds.

This reflects a 76 percent drop from July’s US$355 million and a 24 percent year-on-year decrease, according to Wamda and Digital Digest’s monthly report.

Unlike previous months, August did not see any megadeals, with the largest round being UAE-based Yuze’s US$30 million deal. Debt financing played a minimal role, accounting for only 3 percent of the total raised capital.

The UAE once again led the region in startup investments, as 13 UAE-based startups raised US$55.7 million.

Saudi Arabia followed with US$16 million secured across nine deals. Egypt, which had been a top performer in July, saw a sharp decline, raising just US$7.6 million from four deals, while Kuwait made it to the top four with a single deal — Kem’s US$3 million raise.

Investor interest remained concentrated on fintech, which continued to be the most funded sector for the third consecutive month, raising US$54 million across eight deals. Web3 also regained momentum, securing US$13.5 million in three rounds, while food tech reappeared on the scene, raising US$9 million through four deals.

The month was dominated by early-stage funding, with two startups raising a total of US$19 million in Series A rounds, and five startups raising US$15.6 million in seed rounds. Seven startups did not disclose their funding stages, accounting for US$35.4 million of the total investment.

Business-to-business models remained highly attractive to investors, with 13 startups raising US$46 million. Business-to-consumer models attracted US$15 million across five rounds, while the remaining funds went to startups operating in both sectors.

Female-led startups continued to face challenges in raising capital, securing just 0.3 percent of the total investment in August. Only one female-founded startup, Powder Beauty, raised an undisclosed pre-series A round, and another female co-founded startup received a US$150,000 accelerator grant.

The MENA entrepreneurial ecosystem also saw other notable developments in August, including the formation of the Waad Investment firm, a coalition of GCC-based family offices targeting a US$200 million fund, and a US$100 million fund launched by Singapore-based Gate Ventures and the Blockchain Center in Abu Dhabi to promote Web3 innovation.

In Egypt, T-Vencubator launched the “Where’s the Problem?” initiative to support the local startup ecosystem.

On the mergers and acquisitions front, August saw the UAE-based property crowdfunding platform Maisour acquired by Meteora Developers, while Kuwait-based proptech Sakan acquired Qatari company Hapondo.