The 2018 MENA Venture Investment Report by MAGNiTT highlights strong growth with a record number of transactions and an increase in total funding across MENA-based startups, up 31 per cent from 2017.
Philip Bahoshy (pictured), MAGNiTT founder and CEO, commented: “This is an extremely positive signal. 2018 saw more international investors enter the foray than before, new accelerator programmes created the region, multiple government initiatives spurring innovation and established regional Venture Capital firms closing out new funds to deploy further capital.”
Another key highlight, Bahoshy notes, is “as startups mature and grow, 2018 has seen more later stage investment deals at Series B and beyond than ever before and we expect this trend to continue into 2019 as startups scale to get closer to exits.”
Interestingly, when excluding the outlier investments in UAE-based Souq.com and Careem, MAGNiTT highlights that 2018 was a record year in terms of funding, similarly up 31 per cent to $693m invested in MENA-based startups. This is higher than any previous year on record, based on MAGNiTT statistics. This is another sign of the ever-maturing ecosystem and subsequently led to an increase in the average deal size in the region, up 26 per cent year-on-year.
In another sign of a shifting landscape, FinTech accounted for 12 per cent of all deals in 2018. Notable deals include the $18m in Aqeed, $8m in Wahed Invest and $4.5m in Expensya. We also saw the major exit of TPay in Egypt, which brought about the first Dragon Startup, a startup whose exit pays back the full fund size of a VC.
E-commerce still remains prevalent accounting for 11 per cent of all deals, followed by Transport & Delivery, which was the third most popular industry in terms total deals in 2018, accounting for 10 per cent.
2018 saw a 5 per cent increase in the number of Institutions and Angel Groups making investments in MENA-based startups compared to 2017. 500 Startups remained the most active investment house, especially at early stage investments. However, 2018 was notable for the entrance of major international investment firms. Gobi Partners’ investment in HolidayMe and General Atlantic’s investments in Property Finder highlighted increased international interest in MENA startups. In fact, 30 per cent of all entities that invested in MENA-based startups were international investors.
Corporate Venture Capital continues to grow as well. Majid Al Futtaim, a key investor in Fetchr, continued their venture expansion with an investment in Wadi.com and acquisition in BEAM Wallet, while the Chalhoub Group launched their first accelerator programme for the region.
In another shift, the Al Waha fund in Bahrain announced the launch of the first regional Fund of Funds, having already deployed capital in 3 VC institutions to date. It is anticipated that this will continue as a trend for regional governments into 2019.
Careem receives the highest amount of funding by a single startup, raising $200m in October 2018. The fundraise was the first tranche of its Series F funding round, and was led by existing investors STV, Saudi Arabia’s Kingdom Holding, Al Tayyar Travel Group Holding, and Japanese E-commerce platform Rakuten. The company expects to raise over $500m in its Series F.
The top 10 deals in 2018 account for 65 per cent of total investment amount in 2018, up 2 per cent from 2017. In terms of exits, 2018 has seen 14 startup exits take place across MENA, this marks a decrease of 5 compared to 2017. 4 of the exits in 2018 were by an international acquirer.
Source Link: www.omanobserver.om