Fintech driving private capital investment across MENA

Fintech accounts for 23% of VC investments in the region since 2020, according to the MENA Data Insight Report from GPCA.

Fintech is driving investment across the MENA region according to a new report by the GlobalPrivate Capital Association (GPCA). The report, titled 2022 MENA Data Insight, highlights the importance of technological opportunities across the region.

VC thriving in MENA

The GPCA, a member organization of private capital investors managing a reported USD 2 trillion of assets in Asia, Latin America, Africa, Central and Eastern Europe and the Middle East, claim that venture capital is thriving in the MENA region. Investments totaled USD 4.3 billion between the first half of 2021 through to the first half of 2022.

According to the CPCA, the data shows that MENA countries represented four of the 13 ‘biggest movers’, or markets that exhibited at least 200 per cent year-on-year growth in capital invested in 2021 across Jordan, the UAE, Saudi Arabia and Egypt.

Tech startups: 89% of investments by VCs

The report reveals that deal flow has been driven by technology companies applying global business models to a regional context. Tech startups from the region’s top innovation hubs represent 89% of capital invested by VCs across the MENA region since the beginning of 2020.

The report highlighted deals such as Jordan-based Arabic language digital health platform Altibbi, as well as startups producing new innovations, including UAE-based smart farm Pure Harvest. UAE-based cloud kitchen Kitopi’s USD 300 million Series C extension round led by SoftBank was the largest VC deal in H1 2022, pushing investment into restaurant tech startups to over USD 1 billion since the beginning of 2020.

Fintech: 23% of investments by VCs

Fintech has accounted for 23% of VC investment since 2020, reflecting rising demand for crypto investment services, digital payments and buy now, pay later (BNPL) options – led by Bahrain-based crypto platform Rain’s USD 110 million Series B in January 2022.

In the first half of 2022, Global Ventures reached a USD 85 million first close for fintech fund Nclude with commitments from several large Egyptian national banks. e-commerce marketplaces have also drawn 20 per cent of VC investments, such as UAE-based beauty and wellness e-commerce marketplace Fresha and Pakistani B2B digital retailer Bazaar Technologies.

The report also reveals that MENA-based institutional investors have doubled down on private infrastructure and tech investments in global private capital markets. Middle East sovereign wealth funds have emerged as among the world’s most consequential investors, with trillions of dollars under management combined, the GPCA claim.

MENA region startups raised a total of USD 1.8 billion in H1 2022.