FinTech was the most active industry in terms of the number of deals last year, while IT solutions were the fastest growing. Meanwhile, the transport was the highest recipient of total venture funding
DESPARDES — Three countries (Saudi Arabia, UAE and Egypt witnessed growth in terms of startups, funding deals and entrepreneurship, making — the MENA region a highly attractive place for IT businesses and for professionals “outside the region also such as in Pakistan and in Sri Lanka” who are seeking or want to seek funding through knowledge-based joint ventures with local start-ups in MENA, says business consultant Irshad Salim.
According to Philip Bahoshy, CEO and Founder at MAGNiTT, growth is expected across the board and the geographical shift is set to continue.
The region saw a record 564 start-up investments in 2019, an increase of 31 percent from 2018, with a total amount of funding of $704 million, a recent report by start-up platform MAGNiTT showed.
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Saudi Arabia saw the fastest year-on-year growth in venture funding deals in the region in 2019, which was a record year for MENA-based start-ups in investment deals — the Kingdom accounted for 12 percent of the number of MENA funding deals in 2019.
Egypt topped the region with one-fourth of the number of all venture funding deals. Meanwhile, the UAE accounted for 23 percent of the deals.
In terms of the amount of funding for start-ups in the region, the UAE retained the top spot last year — accounting for 60 percent.
FinTech was the most active industry in terms of the number of deals last year, accounting for 13 percent of the overall deals, while IT solutions were the fastest growing. Meanwhile, the transport was the highest recipient of total venture funding with a share of 19 percent.
“We expect the trend seen in Saudi Arabia and Egypt to continue as they gain market share, while we also expect to see more international startups from outside of the region [to] come to MENA to set up either organically or through acquisition,” Bahoshy told Zawya.
“2020 will likely see another record for start-up exits, as we see further consolidation in crowded markets. As start-ups mature to a later stage, they will also become more interesting for acquisition by large corporates or international counterparts – as we have seen with Uber/Careem and Amazon/Souq, for example,” he added.