As 2024 came to a close, startup funding across the Middle East and North Africa (MENA) region showed an encouraging rise, with a total of $279 million raised in December. This marks an 8% increase from the previous month and signals a positive trajectory, even amidst challenges faced by the sector.
Funding Landscape in December 2024
The $279 million raised in December was distributed across 42 deals. However, when excluding debt financing—which accounted for 44% of the total—the amount drops to $156 million. While this reflects a month-on-month increase, the overall sum represents a 76% decrease compared to December 2023, illustrating the ongoing challenges startups in the region face.
UAE Continues to Attract Significant Investment
The UAE led the charge, attracting $217 million in 18 deals. A major contributor to this total was ALLO’s $100 million debt financing round, making the UAE the top investment destination in the region.
Saudi Arabia followed with $30 million raised across 11 deals, while Bahrain secured $25 million, primarily driven by Calo’s $25 million Series B round. Egypt’s startup scene showed weaker performance, with just $2 million raised across five deals, and other countries like Morocco, Jordan, Tunisia, and Qatar collectively raised $4.4 million, indicating a slowdown in funding activity across these markets.
Fintech and Web 3.0 Lead Funding Activity
The Web 3.0 sector took the lead in terms of total funding, but fintech remained the standout sector when excluding debt financing. Fintech startups raised $93.5 million across seven deals, showcasing continued investor confidence in the region’s financial technology landscape.
Food tech also saw strong interest, raising $25.1 million, mostly driven by Calo’s funding round. Education tech experienced a modest revival, securing $16 million through five funding rounds.
Focus on Early-Stage Investment
Seed-stage startups continued to attract significant attention, raising $59 million. Pre-seed rounds raised $7.7 million across seven deals. Additionally, six Series A startups secured $53 million, highlighting sustained interest in companies transitioning from early stages. In contrast, later-stage funding activity was minimal, with Calo’s Series B round being the only notable deal.
Addressing Gender Disparity in Startup Funding
Despite an overall increase in funding, gender disparity within the MENA startup ecosystem remains prevalent. Male-founded startups dominated the scene, raising $263 million, while female-led startups received just $12.6 million across four deals. Startups co-founded by both genders raised $1.5 million, underscoring the need to improve access to venture capital for women entrepreneurs in the region.
Noteworthy Acquisitions and Funding Rounds
December also saw several significant developments. Egyptian fintech Raseedi acquired Kashat and its subsidiary Pharos Microfinance S.A.E. in a strategic equity deal to expand financial inclusion services. Palestinian-Dutch company TAP raised $1 million in funding to enhance its AI-powered platform, supporting youth employment and job creation across Palestine, Jordan, and Lebanon.
UAE-based Opteam raised an undisclosed pre-seed round to enhance its construction tech solutions, while Jingle Pay secured investment from Pakistan’s Bank Alfalah to expand its digital remittance services across Pakistan.
Web3 and AI Startups Continue to Garner Investment
Sigma Capital, a global Web3-focused venture firm, launched a $100 million fund dedicated to supporting blockchain and cryptocurrency innovations across MENA. Meanwhile, Teammates.ai, a UAE-based AI solutions provider, raised an undisclosed funding round to expand its enterprise AI offerings across MENA and internationally.
Outlook for MENA Startups in 2025
The MENA startup ecosystem closed 2024 with positive momentum, particularly in fintech, Web 3.0, and food tech. As we move into 2025, it will be crucial for both investors and governments to continue fostering early-stage investments while addressing challenges such as gender disparity to ensure the region’s startup scene thrives in the long run.
