MENA startups raised USD 646 million in October

MENA startups have raised USD 3 billion across 551 deals in 2022, a 331% YoY increase over October 2021.

MENA startups have raised USD 646 million over 69 deals in October, taking 2022’s total raised to USD 3 billion over 551 deals, according to a report by Wamda and Digital Digest.

October’s deals value was 273% higher than that of September and 331% higher than that of the same period raised in 2021.

MENA startups: Leading countries

UAE-based startups received the majority of funding with USD 460 raised through 24 deals in October. Cleantech firm Yellow Door Energy received the vast majority, with its USD 400 million raise, the largest recorded in the regional startup environment.

Egyptian startups raised a total of USD 113 million across 18 deals. These deals included USD 31 million raised by Money Fellows, USD 20 million raised by Telda and USD 40 million raised by MaxAB.

Saudi Arabia raised USD 70 million through 12 deals, with e-commerce support platform Zid raising USD 50 million.

Timing of investments

The high levels of investment seen in October are largely due to an increase in late-stage financing. 84% of deals involved late stage startups, including those at Series B and growth stages.

Seed and pre-Seed startups saw a drop in activity, representing just 7% of the capital raised.

According to the report, debt financing is becoming a popular means of financing at startups with higher valuations, including KarmSolar and Trella.

MENA startups: Fintech’s ongoing domination

Yellow Door aside, fintech continued to dominate investment, accounting for 16 of the 69 deals and raising USD 70 million. Neobanks and open banking startups were the most funded fintech sector.

Foodtech, e-commerce and Web3 startups accounted for 7%, 8% and 3.5% respectively. B2B software-as-a-service (SAAS) startups raised USD 528 million across 36 deals, B2C startups raised USD 115 cross 30 deals.

Geographic breakdown

Egypt-based investors were the most active, participating in 18 deals, followed by those based in the UAE with 15 and Saudi Arabia-based with 13. 

International involvement continues to be lackluster. Only 18 out of 64 deals attracted foreign investors, with the US remaining a leading source of global funding for MENA startups. 

Female-led startups

Funding for female-led startups remains low, with October seeing just 0.06% of funding going to female-led companies. Startups with mixed teams raised JUST 0.47%. Male-led startups accounted for 99.47%.

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Read our exclusive interviews with the leaders of two regional VC firms, Venture Souqs and Flat6Labs.