As we approach the final quarter of 2024, the global venture capital landscape is undeniably in flux. Funding has tightened, and Emerging Venture Markets (EVMs) are also feeling the pressure.
Our latest quarterly update shows that the first nine months of this year saw a significant 45% year-on-year decline in total investments across markets in Southeast Asia, Africa, the Middle East, Turkey, and Pakistan. It’s a tough environment to navigate, and yet, not every market is feeling the pinch in the same way.
The standout story so far has been seen within the markets of the Middle East and North Africa (MENA). Despite global headwinds, MENA has managed to buck the broader trend, with just a 13 per cent decline in funding—far from the steeper contractions seen elsewhere. This resilience is no accident; it reflects the region’s increasing maturity, its appeal to international investors, and the strategic role it plays in the broader global investment narrative.
At MAGNiTT, we’ve been closely tracking these developments, and what we’re seeing in MENA is remarkable. The region’s startups raised US$1.3 billion in the first nine months of 2024, and although the number of deals dropped slightly, MENA has proven itself capable of weathering the storm.
In fact, Q2 and Q3 of this year both outperformed the same periods in 2023. This speaks volumes about the growing confidence investors have in the potential of this region.
Also Read: Golden Gate Ventures hits first close of US$100M MENA Fund
The driving force behind this performance is clear: international interest in MENA has surged. In the first nine months of 2024, we’ve seen a 34 per cent increase in the number of investors, with a staggering 69 per cent rise in international participants. Events like Expand North Star and the Future Investment Initiative Forum are only amplifying this trend, bringing global investors into direct contact with the opportunities this region has to offer. With Q4 typically being the strongest quarter for VC activity in MENA, we’re optimistic about what’s to come.
Countries like the UAE, Saudi Arabia, and Egypt are leading the charge. The UAE saw a 12 per cent rise in the number of closed deals, capturing nearly 40 per cent of all MENA transactions. It’s no surprise—this is a hub where early-stage rounds are thriving, particularly in seed and pre-Series A deals, which grew by 40 per cent year-on-year.
Saudi Arabia isn’t far behind, with deals counting up to seven per cent, driven by a 46 per cent rise in seed deals from innovative startups like Moyasar and SiFi. Even Egypt, while experiencing some headwinds at the pre-seed level, posted impressive growth in seed and Series A deals, signalling a shift toward more mature startups.
Of course, the picture isn’t universally bright. Africa and Southeast Asia have faced significant challenges this year. Africa’s startups raised US$839 million, a sharp 38 per cent YoY drop, while Southeast Asia saw the largest contraction of all EVMs, with a 51 per cent YoY decline in funding. These markets are currently recalibrating, particularly as mega deals are becoming fewer and the ecosystem shifts.
Looking ahead, we believe Q4 2024 will be critical—not just for MENA but for the global venture ecosystem. With global trends suggesting lower interest rates and an uptick in investment activity, the real question is: can we expect a rebound in Q1 of 2025?
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