Startups in the Middle East and North Africa (Mena) raised $105 million across 44 deals in July 2022, marking a significant slowdown in investments so far this year. In terms of investment value, this is a drop of 84 per cent year-on-year and a 68 per cent drop month-on-month. Even without Kitopi’s record-breaking $415 million Series C round announced in July last year, the amount raised last month fell by more than 50 per cent.
The number of deals fell by almost a third when compared to June and has halved when compared to July 2021. Investment announcements typically fall during the summer months, but it seems like this slowdown is reflective of wider global trends that have impacted investor sentiment. Investment in startups worldwide fell by 23 per cent in the second quarter this year, according to CB Insights due to growing economic uncertainty and a decline in tech stocks.
Most of the investment in July was concentrated in the fintech sector thanks to UAE-based Yap’s $41 million growth round. This one deal accounted for more than half of the amount raised in the UAE alone.
Saudi Arabia, which to date has seen investment in its startup rise steadily, saw a 55 per cent drop in investment value in July when compared to June 2022, while investments in UAE startups dropped 73 per cent.
Egypt was the only country that saw its investments rise, with a 72 per cent increase in investment value thanks mainly to Cartona’s $12 million Series A round.
Activity in Lebanon also picked up, due to the Energy Innovation Hub’s accelerator programme which saw 13 startups receive a grant of $12,000 each, most of them in the cleantech and sustainability sectors. Yap’s large round propelled fintech to the top of the rankings in terms of investment value with $53 million raised across eight deals.
Just 12 of the startups that raised investment in July attracted foreign investment, of which US investors participated in eight of the deals. Regionally, Lebanon’s Innovation Hub was the most active investor in terms of number of deals, followed by UAE investors with 11 deals and then Saudi Arabia-based investors who participated in eight deals.
Female-founded startups raised just 0.1 per cent of the $105 million, the lowest so far this year, while startups founded by men raised $95 million, or just under 91 per cent. Startups with both male and female co-founders raised $9.6 million, or 9 per cent of the total.
Last month, six startups did not disclose the amount they raised. They include Lun Startup Studio, Modesta, Orisdi, Paymee, Sol, Stllr Network. We have assigned them a conservative amount of $100,000 each.
These monthly reports are a collaboration between Wamda and Digital Digest.