Wamda, a research platform, revealed that Egypt was absent from the startup funding deals map in the Middle East and North Africa (MENA) region for the first time last March. This indicates a slowdown in the regional market amidst escalating economic and geopolitical challenges.
This absence occurred despite Egyptian fintech solutions company "Hambleton Labs" announcing that it secured an investment round during the same month from "Exian Investment," the investment arm of "AXIAN Group." However, the funding value was not disclosed, which prevented its inclusion in the announced deals.
Regarding the geographic distribution of funding, the UAE topped the list of countries most attractive to startup investments in March, securing a total of $36.8 million across 8 deals. This continues to solidify its position as a regional hub for entrepreneurship. Saudi Arabia followed with $10.2 million from 4 deals.
Morocco came in third with $2.1 million across two deals, followed by Qatar with a single funding round worth $500,000, and Syria with one deal estimated at $100,000.
According to the report, March was one of the weakest months for startup funding activity in recent years. The market was directly affected by rising geopolitical tensions in the region, especially due to the repercussions of war and tensions related to targeting infrastructure and the energy sector in some regional countries.
Startups in the region recorded only 17 funding deals in March, totaling $48.3 million, a sharp 85% decrease compared to February of the same year. This reflects a state of extreme caution among investors.
The report explained that many investors opted to pause and re-evaluate investment opportunities, reducing liquidity in the market. Meanwhile, a number of company founders resorted to completing closed funding rounds, awaiting more stability and clarity in the coming period.
At the sector level, the fintech sector led the list of most attractive areas for investments with $15.1 million, followed by the healthtech sector with approximately $15 million, then Software as a Service (SaaS) solutions with a total of $6.7 million. This indicates continued investor interest in high-growth technology sectors despite current challenges.
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