Summary:
- The amount invested in MENA-based startups in Q3 2018 was roughly on par with Q2 2018, as $82M was invested across 62 deals.
- Deal activity declined in Q3 2018 relative to Q2 2018, although there was a pick-up of announcements and activity in September 2018.
- Total estimated funding, including calculations for undisclosed deals, over the first 9 months of 2018 amounted to $325m. This is down $95m from the same period in 2017, which amounted to $420m (excl. Careem’s $150m investment in June 2017).
- The UAE continued to account for the largest share of startup deals (29%) and investment amount (61%) in 2018 YTD, with the emergence of the Egyptian, Lebanese, Jordanian, and Saudi Arabian ecosystems
- 2018 YTD most active venture capital investors were 500 Startups (28), MEVP (12) Arzan Capital (9) being the most active by number of investments
2018 YTD Funding
- 239 investments were made in the first nine months of 2018, which marks a 4% decrease compared to the number of deals for the same 9-month period in 2017.
- In 2018 YTD, total disclosed funding in startups was down 38% to $238m compared to the same period in 2017 (when stripping out Careem’s $150m investment in June 2017).
- 37% of investments were shared with undisclosed figures in 2018 YTD, up 20% from the same period in 2017.
- Total funding in 2018 YTD, including calculations for undisclosed deals, amounted to $325m, which is down $95m from the same period in 2017.
2. Funding Institution activity:
- 500 Startups remains the most active venture capital investor by number of deals, accounting for 28 investments, followed by MEVP with 12 deals and Arzan Capital with 9.
- Moreover, accelerator programs remain a key stakeholder in supporting early-stage startups, with Flat6Labs Cairo graduating 18 firms, as well as Oasis 500, Flat6Labs Bahrain, Flat6Labs Beirut and Flat6Labs Tunis graduating cohorts of 8 startups each.
- Emerging active investors to the MENA region in 2018 include Flat6labs Bahrain, Kingsway Capital, Cedar Mundi, Phoenician Funds and Fikra Labs.
3. Investment Breakdown:
- The UAE continued to account for the largest share of startup deals (29%) and startup funding (61%) in 2018 YTD.
- Both Egypt and Lebanon saw an increase of 4% in the number of startup deals in the first 9 months of 2018 compared to H1 2018, reflecting increased activity over the summer.
- E-commerce still remains the most active industry with regards to startup investment in 2018 YTD, accounting for 12% of all transactions and 23% of disclosed funding.
- Early stage investment accounted for 77% of all transactions in 2018 YTD, down 1% from the same period in 2017, while accounting for only 19% of the total funding amount.
- 2018 YTD saw 34 Series A transactions and 6 Series B deals announced.
