The MENA region registered a 20 percent jump in late-stage funding since 2018 amid a 49 percent fall in late-stage funding globally during the period, a latest market report said.
The report also highlighted a sharp retreat in international investor participation in the region in late-stage funding in the region of late.
“From 2019 to 2022, investors from outside MENA dominated the late-stage VC landscape in the region by capital deployed, contributing about 57 percent of late-stage venture investments. In contrast, in H1’23 only 13 percent of the capital deployed was from international investors,” the report by MAGNiTT, a leading venture capital data platform, said.
This has put greater pressure on regional investors to bridge the gap left by their international counterparts, who now lead deal flow and funding in late-stage rounds of the region, the report pointed out.
Late-stage is defined as investments made into post-Series A deals, spanning both disclosed and undisclosed deals from the last 4.5 years, according to MAGNiTT’s MENA Late-Stage Venture Funding report.
The report also revealed that some of the mega deals – over $100 million investments – have elevated the funding seen in MENA in late-stage rounds compared to global benchmarks.
Over 85 percent of total funding deployed in late-stage rounds in H1 ’23 went into mega deals raised by Egypt’s Halan, and KSA’s Nana and Floward.
Philip Bahoshy, the CEO of MAGNiTT, said this year’s market volatility resulted in a global investor retreat in both absolute dollar terms as well as relative participation by international investors.
“We are observing more regional investors stepping in to bridge the gap, with nine of the top 10 investors by transactions from 2019 to H1 2023 headquartered in MENA,” he said.
Globally, investments in the late stage have been constrained by economic uncertainty and macro factors.
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