Venture debt (VD) in the MENA region reached an all-time high in 2023 with a 262 percent annual growth, an industry report said.
Venture debt facilities last year were a staggering 50 times its level in 2020, emphasising its increasing importance as a minimally dilutive source of capital for startups and growth-stage companies, the report by MAGNiTT, a leading data platform tracking private capital, said.
MENA venture debt landscape
The report said the MENA region has experienced consistent growth in venture debt for the fourth consecutive year in 2023.
Saudi Arabia, the UAE, and Egypt emerged as the dominant markets by activity in the MENA venture debt landscape, with Saudi Arabia leading the charge, capturing $400 million in VD facilities last year, accounting for 53 percent of the total VD facilities in the region, the report said.
The region also saw $750 million in MEGA deal facilities, posting a whopping 650 percent Y-o-Y jump in total VD MEGA deal value.
“These mega deals have been pivotal in propelling the MENA VD market to new heights,” the report said.
The UAE topped MENA markets by the number of VD facilities, capturing 50 percent of total transactions reported in 2023.
Philip Bahoshy, Chief Executive Officer of MAGNiTT, said despite the high-interest rate environment, the firm has observed significant funding, particularly in the Buy Now Pay Later (BNPL) segment.
“Investor interest has grown notably, with new funds established through investment from the Jada Fund of Funds in Partners for Growth, as well as Shorooq Partners’ latest Private Credit Fund, indicating a strong and growing confidence in the venture debt market,” he said.
The report said fintech continues to lead the way in venture debt lending, capturing 79 percent of MENA’s total VD facilities in 2023.
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