UAE startup sector growth unstoppable in 2022

Mena region witnessed $2.6 billion VC funding in 2021 — the highest the region has ever seen.

The UAE startup sector’s trajectory is unstoppable as the industry has retained its top position both in terms of funding and deals in 2021 despite the pandemic impact.

The inaugural edition of the Magnitt Emerging Venture Markets Report unveils the rush by venture capitalists (VCs) into emerging venture markets (EVMs) for growth. The EVMs covered by Magnitt’s new report include the Middle East, Africa, Pakistan, and Turkey.

Philip Bahoshy, CEO and 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 $6 billion 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.

Maintaining its first rank, the UAE-based startups raised $1.2 billion across 155 transactions. Meanwhile, Saudi Arabia overtook Egypt to rank second by funding in 2021, after VC investment in the country grew by 270 per cent year-over-year.

The Mena region witnessed $2.6 billion VC funding in 2021 — the highest the region has ever seen, registering a new record count of 590 transactions and 35 startups announcing exits in 2021.

“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,” added Bahoshy.

“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.”

Basil Moftah, General Partner, Global ventures, said: “2021 has been an extraordinary year for the region’s venture capital industry. Between fundraising and deal-making, Mena’s ecosystem was in hyperdrive this year. Whether it is record-breaking amounts of funding, growing appetites for later-stage transactions, the rising occurrence of diversified deal types (from M&A to venture debt) or the increasing number of mega-rounds, the region is signaling maturity. Underpinning these quantitative metrics is a pool of increasingly sophisticated entrepreneurs building world-class tech solutions and proving, year in and year out, that some of the most exciting opportunities of tomorrow will originate from emerging markets.” — sandhya@khaleejtimes.com