Source: Arabian Business
Startups in the Middle East and North Africa (Mena) region raised $277 million in the first three months of 2020, a two percent increase on last year, according to Magnitt’s Q1 2020 Mena Venture Investment report.
The startup data platform revealed this was down to a strong start to the year - pre-coronavirus - with several startups raising large funding rounds in January and February, including Kitopi ($60m), Vezeeta ($40m), and SellAnyCar ($35m).
However, it added that investment deals for Q1 were down 22 percent compared to the same period last year and, with the onset of the Covid-19 pandemic, that figure tumbled further in March, with a drop of 67 percent recorded.
"Historical data highlights that investment rounds across Mena tend to take, on average, six months to come to fruition,” said Philip Bahoshy, Magnitt’s founder & CEO.
“We will most likely not see the full impact of Covid-19 on the venture funding space yet for a few months. However, early indications have already shown a slowdown in funding announcements, as startups and investors re-evaluate their positions in this new environment.”
E-commerce, edtech interest
Understandably, Bahoshy said that investor appetite has increased in startups covering grocery delivery, healthcare, e-commerce and edtech.
While Magnitt’s fundraising tool, which virtually hosts 74 investor and accelerator applications, has seen a 117 percent increase in applications month-over-month since January, as startups increasingly look for alternative ways to fundraise during the current crisis.
A survey of over 100 startup founders participating in Magnitt’s weekly webinar series saw 59 percent say their business had already been impacted by the crisis.
Some 48 percent said revenue generation was their major concern and 25 percent pointing to fundraising as the issue that keeps them up at night; while 41 percent anticipate lower-than-expected revenue growth rates in 2020, with 29 percent anticipating revenue below 2019 figures.