Commenting on the report’s significance, Abdulrahman bin Hesham Al-Sowaidi, CEO of QDB, said Qatar Development Bank remains at the forefront of enabling venture capital investments in Qatar, marking a nine-year journey of support for the industry. “As we review the data presented in this report, we recognize the important role we play in empowering Qatar’s entrepreneurship ecosystem. We are proud of the sector’s growth, particularly with the increasing participation of private and international investors, who now account for more than 50% of total investments. We also emphasize the importance of solid future planning and pursue our efforts to attract investors to tap innovative projects, which would boost venture capital investments in Qatar, especially in key clusters aligned with the Third National Development Strategy 2024-2030.”

“Our goal at this stage is to expand the base of investors and funds in Qatar. To this end, we have launched several pioneering regional initiatives, including the Startup Qatar Investment Program under the umbrella of Startup Qatar, a platform unveiled by the Investment Promotion Agency (Invest Qatar) last year, the Arab Entrepreneurs Investment Program, and the Partial Guarantee program, all aimed at boosting investment and supporting the private sector,” Al Emadi explained.

Philip Bahoshy, CEO and Founder of MAGNiTT, said his organization was pleased to publish its annual report in collaboration with Qatar Development Bank. “Over the past year, Qatar has seen remarkable growth, with notable events such as the Web Summit and the launch of the new fund of funds. Additionally, the emergence of several venture capital funds in the country has fostered positive momentum, with transactions increasing by 24% year-on-year.”

This year’s report underscores Qatar’s growing role as an attractive investment hub in the Middle East and North Africa, with the number of venture capital deals in the country increasing by 24% year-on-year in 2024. The total value of deals reached QAR 115 million, marking a significant 135% increase in direct investment despite a slowdown in venture capital investments across the region and challenges in the broader investment landscape. Qatar bucked the trend, ranking fourth in the MENA with 5% of the region’s total deals in 2024. QDB’s investment arm also ranked fourth in the region among the most active investors in terms of the number of deals, affirming Qatar’s leadership in the investment sector and solidifying its position as a hub for innovation. Additionally, Qatar ranked sixth for venture funding in the region in 2024, four times its share in 2023.

The report also underscores fintech as the leading sector in Qatar, accounting for 29% of deals in 2024, an increase of 12% from 2023, highlighting the success of initiatives driven by QDB’s Qatar FinTech Hub. QDB remains dedicated to strengthening the venture investment landscape by collaborating with partners in Qatar and the region through the Qatar FinTech Hub, fostering investments, attracting innovative startups to establish their businesses locally, and developing products that enhance private sector participation in venture capital.

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According to the report published today by the venture data platform MAGNiTT and sponsored by SVC, the Kingdom captured the highest share of total VC funding in the MENA region in the first half of 2024, which accounted for 54% of the total capital deployed in the region, increasing from 38% in the first half of 2023.

E-Commerce/Retail was the highest sector in the Kingdom by the amount of VC funding, where the sector accounted for 52% of total funding, amounting to $215 Million (SAR 806 Million). While FinTech continued to lead the Kingdom’s total number of deals, capturing 14% of deals in the first half of 2024.Commenting on the report, Dr. Nabeel Koshak, CEO and Board Member at SVC, said: “We are proud that SVC’s strategy contributed to the development of the Kingdom’s Venture Capital ecosystem. Through unwavering efforts, the Kingdom maintained its leading position in the region, which comes as a result of the economic development witnessed by the Kingdom with the support of the Custodian of the Two Holy Mosques, King Salman bin Abdulaziz Al Saud and His Royal Highness the Crown Prince, Prince Mohammed bin Salman Al Saud, through the launch of many governmental initiatives to stimulate the VC and startups ecosystem within the Saudi Vision 2030 programs”.

Philip Bahoshy, CEO at MAGNiTT, quotes: “Saudi Arabia continues to make significant strides in fostering innovation and supporting a robust startup ecosystem. This progress is evident in the Kingdom’s deal flow, which accounted for 30% of H1 MENA deal activity, up from 24% in H1 2023. MAGNiTT’s data shows that KSA led H1 VC funding in MENA, while non-mega funding (deals less than $100 Million) saw an impressive 84% YoY growth. This positive trend underscores the growth of investment in the foundational ecosystem, building a strong pipeline for future late-stage investments”.

SVC is an investment company established in 2018 and is a subsidiary of the SME Bank, part of the National Development Fund (NDF). SVC aims to stimulate and sustain financing for startups and SMEs from pre-Seed to pre-IPO through investment in funds and direct investment in startups and SMEs.

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The region’s inaugural founder-focused report draws insights on the 400 founders of 200 Saudi startups that raised more than $1M in VC funding between 2014 to 2023. In an effort to shed further light on Saudi startup founders’ characteristics and support informed decision-making in the ecosystem, the report underscores the analysis of founders’ backgrounds, experiences, and expertise while benchmarking them against global peers.

The report revealed that the 200 most funded Saudi-based startups raised a total of $3.3bn in Venture Capital (VC) funding from 2014 to 2023. Founder breakdown reveals that 44% of these startups were launched with two founding members, accounting for 53% of the total funding raised. Single-founder startups represented 30% of funded startups, with their share of total funding accounting for only 15%.

According to the report, 36% of these 400 founders had 10+ years of work experience before founding a startup. 66% of the 400 founders were first-time startup founders with only 30% of all founders having prior regional startup experience.

Commenting on the report, Dr. Nabeel Koshak, CEO and Board Member at SVC, said: “At SVC, we have witnessed the remarkable growth and dynamism of the Saudi startup landscape. The Kingdom’s strategic initiatives, driven by the Saudi Vision 2030, have laid a solid foundation for innovation, entrepreneurship, and investment. As a result, we have seen a surge in startup activity, with a growing number of ambitious founders seizing opportunities and driving innovation across various sectors”.

He further added, “The report provides deep insights into the founders who have managed to raise venture capital over the last ten years in the Kingdom. We continue our commitment at SVC to support the development of such reports that provide policymakers, government officials, investors, and founders with insights and data to inform strategic decisions and policies to further nurture the startup ecosystem for the next ten years”.

Philip Bahoshy, CEO at MAGNiTT, quotes: “I’m pleased to announce the inaugural release of the 10-year Saudi Founders Report in our ongoing efforts to foster transparency within Saudi Arabia’s venture and private capital landscape, in collaboration with SVC. At MAGNiTT, the core focus of our proposition revolves around data, insights, and analysis. We aim to support decision-makers in their policy initiatives through data and insights. There has been an absence of consolidated data on startup founders in the region. So, I’m proud that MAGNiTT is taking the lead in benchmarking the ecosystem and releasing the region’s first report on founders. I am confident that this research will prove invaluable for aspiring startups and investors seeking a deeper understanding of the regional landscape.”

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One of the most interesting shifts the report highlights is the sharp retreat observed in international investor participation in the region. From 2019 to 2022, investors headquartered from outside MENA dominated the late-stage VC landscape in the region by capital deployed, contributing about 57% of late-stage venture investments. By contrast, in H1’23 only 13% of the capital deployed was from international investors. 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.Philip Bahoshy, the CEO of MAGNiTT comments, “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. This is not to say that MENA has not been attracting global players into the region. In fact, since the start of the year, we’ve seen an increased interest from international investors, however, this has been largely driven by GPs of global funds looking to raise capital from sovereign LPs locally. But we continue to monitor how this interest will translate into active participation in the ecosystem through investments that we track.”

Furthermore, the late-stage investment landscape has also evolved in MENA. Participation from Venture Capital firms in such stages has dissipated with their share decreasing from 64% in 2019 to only 41% this year. Instead, investment companies and Corporate VCs have increased their participation in these stages as they offer a more strategic investment proposition with industry expertise, customer access, and deep pockets.Another interesting trend highlighted in the report is the rate at which MENA deal sizes for late-stage investments have been growing while the global benchmark has been declining since 2021. Since 2019, the late-stage median deal size has been steadily increasing, reaching a record high in 2023 with a growth of 43% CAGR over the past 4.5 years. Whereas, globally, the ability of late-stage companies to raise capital has been on a decline since 2021. The median deal size for global late-stage rounds has plummeted by 45% in 2023, aligning with their 2019 figures.

When it comes to valuations, we see average startup valuation from Series A to Series C rounds in MENA rise by 23X between 2019 to 2022. The only distinction to be made here is that the venture market in the region is still quite young. This can be seen as the proportion of startups who raise Series B and further rounds is 8% of all the deals recorded between 2019 to 2022, out of which only 1.3% raised their Series C round. You can now view all of the valuation trends of startups in MEAPT through MAGNiTT’s Advanced Analytics, which provides tools for market sizing and deal-size analysis and captures funding and exit trends. Now, with valuation charts the platform aims to aid investors understand granular insights and trends of the region.

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Philip Bahoshy, CEO & Founder of MAGNiTT, the leading data platform covering Venture Capital in Emerging Venture Markets, said, “2021 has in fact been more than just a record-breaking year for VCs, rather it has been a defining year. While the global pandemic posed great pressures on governments, private sectors, and startup ecosystems alike; the year 2021 marked the resurgence of VC activity tenfold.”

The report reveals unprecedented regional and global investor participation across markets and a new record of funding crossing $6Bn in Emerging Venture Markets, as well as the fact that FinTech is the leading industry amidst an exceptional growth of T&L and E-commerce.

Five overall EVMs 2021 key trends:

1. A record-high funding volume of $6.8B was raised across 1,329 deals, marking a growth of 228% in funding and 267% in deals when compared to 2020.

2. Record year for mega-deals with 12 mega-deals ($100M+) closed, more than all mega-deals combined between 2016 and 2020. These deals accounted for 42% of all capital raised across Emerging Venture Markets in 2021.

3. Turkey and UAE together accounted for 44% of total venture capital invested. Investments in Turkey were driven by mega-deals closed by Getir and Dream Games, amounting to $1.1B, while MENA saw one mega-deal each closed by a UAE, Egyptian and Saudi startup.

4. Fintech was the leading industry across all EVMs and the industry of choice for VC investments, indicating increased innovation and digitalization of the Financial services sector. These represent 21% of all deals closed and 31% of total funding raised. The 5 mega-deals in Africa, for example, were all Fintech deals. It was the only industry with 100+ deals in MENA.

5. Exits across EVMs doubled between 2020 and 2021, indicating more liquidity events in the region, with 87 startups announcing exits in 2021, vs 41 startups in 2020.

Bahoshy added, “It has become clearer than ever that the true potential for startups in Emerging Venture Markets lies in the cross-pollination across geographies. This scaling resulted in the creation of regional players which we’ve seen emerge organically through expansion or inorganically through cross-market acquisition. Success stories that highlight the latter include Nigerian HealthTech Helium health acquiring Qatari Meddy, UAE-based Trukker acquiring Pakistan-based Trucksher, or UAE-based Fenix acquiring its Turkish counterpart Palm.”

“Scale is the name of the game, and no doubt a big prediction for 2022 will be more companies in different areas expanding across geographical borders. In light of that, what we’re most excited about at MAGNiTT is ensuring the information transparency needed to break these silos and detail the landscapes of what were previously opaque markets”, he concluded.

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Philip Bahoshy, founder and CEO of MAGNiTT

Philip Bahoshy, MAGNiTT founder and CEO, indicates “this is an extremely positive signal. 2018 saw more international investors enter the foray than before, new accelerator programs created the region, multiple government initiatives spurring innovation and established regional Venture Capital firms closing out new funds to deploy further capital.” Another key highlight Bahoshy notes is “as startups mature and grow, 2018 has seen more later stage investment deals at Series B and beyond than ever before and we expect this trend to continue into 2019 as startups scale to get closer to exits.”

Year 2018 saw 366 investments in MENA-based startups, which amounted to $893m of total funding. This is an excellent indicator for the ecosystem, with a 31% increase in investment compared to 2017, in which $679m was invested. The number of deals remained healthy at a record high, up 3% compared to 2017, showing continued appetite in startups from the region.

The UAE has maintained its dominance thanks to continued government support, corporate venture interest and growing investor appetite for startups. 30% of all transactions were made in to UAE-headquartered startups in 2018, while it also accounted for 70% of total funding.

However, the landscape continues to evolve. Egypt was the fastest growing ecosystem in 2018 – receiving the 2^nd highest number of deals at 22% of all deals, up 7% from 2017. Lebanon, ranked 3^rd by number of transactions with 10%,  saw the highest fall in deal flow compared to 2017, with a 4% drop.

FinTech accounted for 12% of all deals in 2018. E-commerce still remains prevalent accounting for 11% of all deals, followed by Transport & Delivery, which was the third most popular industry in terms total deals in 2018, accounting for 10%.

The year also witnessed the major exit of TPay in Egypt, which brought about the first Dragon Startup, a startup whose exit pays back the full fund size of a VC.

2018 saw a 5% increase in the number of Institutions and Angel Groups making investments in MENA-based startups compared to 2017 and among all 30% of all entities that invested in MENA-based startups were international investors.

The top 10 deals in 2018 account for 65% of total investment amount in 2018, up 2% from 2017. And, Careem received the highest amount of funding by a single startup, raising $200m in October 2018. In terms of exits, 2018 has seen 14 startup exits take place across MENA, this marks a decrease of 5 compared to 2017. 4 of the exits in 2018 were by an international acquirer.

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A few high-level takeaways from their 80-page Venture Report include:

H1 Funding: 2018 saw a record year in number of investments made year to date:

• 141 investments made in H1 2018, which marks a 12% increase on the number of deals for the same 6 month period in 2017
• Total disclosed funding is down 43% to $112m compared to the same period in 2017 when stripping out Careem’s $150m investment in H1 2017
• In the first 6 months of the year, 23% of investments were shared with undisclosed figures, up 6% from H1 2017

For the first time, MAGNiTT, in their H1 Report also included calculations to estimate the funding amounts of undisclosed deals. MAGNiTT used four years of historical data as a basis for these  calculations, which highlighted:

• Total funding, including calculations for undisclosed deals, for H1 2018 amounted to $203m, which shows similar levels to H1 2017’s calculation of $206m (excluding Careem’s $150m investment)
• Notable undisclosed deals in 2018 include Mumzworld (Series B), Fadel Partners (Series B) and Armada (Series A) which were included in this calculation

MAGNiTT’s founder, Philip Bahoshy, commented, “We are pleased to launch the H1 Venture Funding report in which we have used new analysis to capture undisclosed funding across the region. This allows for more accurate estimates on the venture funding space as it continues to show signs of development and growth.”

Investment Breakdown: When looking at the geography and industries of startup investment, however, new trends are beginning to emerge. The UAE still maintains its dominance as the most active and largest recipient of startup funding, with other countries beginning to emerge:

• The UAE continues to account for the lion’s share of startup deals (32%) and investment (59%)
• Egypt saw an increase of 12% and KSA a 9% increase in startup funding in H1 2018, emerging into the top 3 countries across.
• E-commerce still remains the most active industry with regards to investment in H1 2018, accounting for 12% of all transactions and 16% of disclosed funding

Bahoshy points to “Governments across the region continue to focus on startup innovation. We have seen regional initiatives like visa regulation changes in the UAE, launch of the new Fund of Funds in Bahrain and changes to foreign ownership structures in KSA as examples to further support Entrepreneurs in the region. While challenges exist, similar to all emerging ecosystems, the public and private sector are working closely together to help solve for many founders pain points.”

VC activity and Exits: 2017 saw the emergence of many new Investment Institutions in the MENA region. H1 2018 has continued to see new market entrants as well as deployment from many of the same protagonists:

• 500 Startups remains the most active venture capital investor, especially at the SEED and PRE-SEED stage, accounting for 10 investments, followed by MEVP with 8 deals and Arzan Capital with 7;
• Moreover, accelerator programs remain a key stakeholder in supporting early-stage startups, with Flat6Labs in Cairo graduating 10 firms, as well as Oasis 500 and Flat6Labs Beirut graduating cohorts of 8 startups each.
• Early stage investment accounted for 84% of all transactions in H1 2018, up 6% from H1 2017, while accounting for 27% of the total funding amount.

Bahoshy commented, “In a record start of the year in terms of transactions, much of this investment had been focused at the Early Stage. Multiple governments have made announcements on the creation of Fund of Funds to help fuel investments across all stages of Startup growth. We are also seeing Corporates play an active role in Corporate Venture Capital activity and much of the MENA regulation is focused on supporting startups and investors connect. All these factors will help the acceleration of the MENA startup ecosystem.”

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