At the close of 2023, Saudi Arabia affirmed its status as a primary hub for venture capital in the Middle East and North Africa (MENA), witnessing a historic surge in startup funding. The month of December alone saw an inflow of $1.15 billion into the region’s startups, as reported by Wamda in conjunction with Digital Digest. This represents an 825 percent increase compared to the previous year and a 55 percent rise from the preceding month.
A significant contributor to this figure was the $700 million debt round secured by Tabby, a fintech originally established in the UAE and now operating out of Saudi Arabia. Discounting this major transaction, MENA startups still raised an impressive $456 million in December, marking a substantial increase in both month-on-month and year-on-year funding.
The year 2023 saw regional startups amass a total of $3.98 billion over 498 deals. While this was slightly higher than the $3.95 billion raised in 2022, the landscape shifts when excluding debt rounds. Without these, the funding amounted to $2.2 billion across 488 deals in 2023, in contrast to $3.45 billion from 786 deals in 2022, indicating a notable decline in both the value and number of deals.
Debt financing saw an exponential increase in 2023, with a 256 percent rise over the previous year, totaling $1.77 billion. The final month of the year also saw a spike in deal-making activities, with 60 transactions recorded, up from 49 in November. This growth was fueled by a rise in grants, particularly in the UAE, Saudi Arabia, and Lebanon, and the successful graduation of startups from accelerator programs like Sanabil 500 and Techstars Riyadh.
For two consecutive months, Saudi Arabia led as the premier destination for venture funding, largely thanks to sizable deals involving companies such as Tamra and Tabby. Egypt followed in ranking, with the UAE in third place.
Fintech stood out as the sector garnering the most deals, with 25 transactions exceeding $1 billion, largely due to Tabby’s funding. Clean tech was another area of focus, with notable investments in Saudi’s secondhand e-commerce platform Soum and UAE’s Zeroe. Other sectors, including health tech, edutech, logistics, and mobility, also drew significant interest from investors. Early-stage ventures, particularly those emerging from accelerators, dominated the volume of deals.
However, there was a noticeable disparity in funding distribution, with less than 1 percent of total deal value directed towards startups with mixed or all-female founding teams.
December also featured key corporate actions, including acquisitions and mergers such as Pure Harvest’s takeover of Red Sea’s production facility and Maxab’s union with Wasoko. In the run-up to the UN climate change conference, COP28, hosted in Dubai, clean tech initiatives gained traction, with new accelerator programs and a substantial climate tech fund introduced by Investcorp.
The increasing influx of venture capital into the MENA region, spearheaded by Saudi Arabia, is pivotal for the burgeoning startup landscape, setting the stage for future advancement in entrepreneurship and technology.
Dutch travel tech Jedo expands to Saudi Arabia
In a strategic move to widen its global footprint, Jedo, a Dutch travel technology firm, has taken over the Jump-in app, thereby marking its entry into the Saudi market. This acquisition enhances Jedo’s market presence and expands its customer base in the Kingdom. By incorporating the unique features of the Jump-in app, Jedo aims to revolutionize trip planning with the integration of artificial intelligence, providing more personalized travel experiences.
Jedo’s strategy entails collaborating with key stakeholders, including Plug and Play and Saudi tourism authorities, to harness technology in transforming the country’s tourism landscape. The Jump-in team is set to influence Jedo’s strategies in Saudi Arabia, fostering new partnerships and alliances. With a focus on enabling residents and international visitors to discover authentic Saudi experiences, Jedo is customizing its platform to cater to the local market’s cultural and consumer preferences.
UAE’s Phoenix Group acquires 25 percent of Lyvely
Phoenix Group PLC, a UAE-based entity specializing in cryptocurrency mining and blockchain, has broadened its investment portfolio by acquiring a 25 percent stake in Lyvely, a social networking and content monetization platform. The acquisition aligns with Phoenix’s strategy to expand and strengthen its digital footprint.
Lyvely has made a name for itself since its inception in 2020, helping content creators to monetize their online presence and offering consumers personalized experiences. Following seed funding from Cypher Capital, Lyvely is developing a cryptocurrency token, signaling its entry into digital currencies and expansion in the online content market. The synergy between Lyvely and Phoenix Group opens avenues for collaborative growth within the digital content arena.