Startups in the Middle East and North Africa region (Mena) raised $323.7 million across 66 deals in June 2022, an 84 per cent increase in value and 57 per cent in deal volume month-on-month. Deal volume was pushed up due to the graduation of cohorts from three different accelerator programmes.
As has been the case in the past few months, early-stage companies led in terms of deal count but, the overall funding value was largely driven by late-stage and high-growth companies such as UAE-based agritech Pureharvest, whose $180.5 million round solely made up 55.7 per cent of the funding value.
The agritech company smoothly perched UAE into the top spot. Collectively, UAE startups raised $278.8 million across 16 deals, accounting for 86 per cent of the total amount raised.
Other large rounds included proptech Huspy with a $37 million round led by Sequoia Capital India; NymCard, a neo banking startup that raised $22.5 million and logistics startup Cartlow with an $18 million round from AlSulaiman Group.
Lebanon broke into the top three for the first time thanks to super app toters’ $18 million led by the International Finance Corporation (IFC), March Holding and B&Y Ventures. Egypt came in third with $8.6 million raised across 15 deals, followed closely by Tunisia with $8.5 million raised across nine deals, thanks primarily to Flat6Lab’s accelerator graduates. The four countries together accounted for 97 per cent of the total funding value.
Saudi Arabia, Qatar, Palestine and Morocco startups secured the remaining $9.5 million.
In terms of sectors, agritech, proptech and fintech were the hot sectors in June, together representing 75.6 per cent of the deal activity raised. Substantial funding was also invested in healthtech startups, benefitting from the rise in popularity of fitness and nutrition apps among consumers. UAE-based Vamstar was the largest recipient of funding in the healthtech sector, securing a $14 million round.
While US investors remain the most active foreign investor in startups from Mena, the global involvement has seen a drastic fall. Of the 66 deals, only 16 drew direct foreign investors. Meanwhile, investors based in Saudi Arabia were the most active, investing in 21 deals, followed by their counterparts from the UAE, who participated in nine deals. Accelerators were the most active investors in June, investing in 33 startups across Mena. They include Flat6labs Tunisia, Sanabil 500 and QBIC.
Startups with all-male founding teams received the majority of funding with 92.65 per cent, while female-founded startups raised 1.3 per cent of the financing, up from 0.04 per cent recorded last month. Startups with male and female co-founders raised 5.9 per cent of the total.
ADVA, Mr Mandoob and School of Humanity, and Vetwork did not disclose the exact amount they raised last month.
How did VC funding activity fare in Q2?
In the second quarter (Q2) of the year, startups in Mena raised $ 796.7 million, a decrease of 14.7 in value quarter over quarter but a 56 per cent increase from Q1 2021. The amount recorded in Q2 pushed the total raised in the first half of this year to $1.73 billion across 354 deals.
The deal count also witnessed a 36 per cent decrease from the previous quarter and a 12 per cent increase compared to the same period last year.
Sector-wise, fintech remained the most sought-after segment among investors in Q2, followed by e-commerce.
These monthly reports are a collaboration between Wamda and Digital Digest.