Investments in MENA-based startups jumped by 31% in 2018 to $893m with 366 deals, according to data from UAE-based Magnitt, a leading data platform tracking the region’s startup ecosystem. The number of deals grew by 3% compared to 2017, showing continued appetite in startups from the region.
FinTech overtook e-commerce as the most active industry by number of deals, accounting for 12% of the total activity in 2018. Notable FinTech deals included $18m in Aqeed, $8m in Wahed Invest and $4.5m in Expensya. However, the sector also saw the major exit of TPay in Egypt, which brought about the first dragon startup in the region.
E-commerce still remains prevalent accounting for 11% of all deals, followed by transport and delivery, which was the third most popular industry in terms of total deals in 2018, accounting for 10%.
There is also growing interest from international investors in the region. More than 155 institutions invested in MENA-based startups in 2018, 30% of which were from outside the region and 47% who had not previously invested in MENA. Notable international investments were Gobi Partners’ $16m investment in HolidayME and General Atlantic’s $120m investment in Property Finder.
The UAE remains the most active ecosystem, accounting for 30% of all deals and 70% of total funding. Egypt was the fastest growing ecosystem in 2018 – receiving 22% of all deals, up 7% from 2017. Lebanon, which ranked third with 10% of transactions, saw the highest fall in deal flow compared to 2017 with a 4% drop.
Dubai-based ride-hailing app Careem topped the funding chart with an investment of $200m from existing investors which include Saudi Arabia’s Al Tayyar Group, Kingdom Holding, Saudi Technology Ventures and Japanese e-commerce company Rakuten.
In terms of exits, 14 startup exits took place across MENA last year, five less than 2017. Four of the exits in 2018 were by international acquirers. M