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January 8 at 9:30 am Dubai
VC investment in emerging markets such as the Middle East and North Africa (MENA) decreased by 40% compared to 2023, according to a new report. The data shows how global capital has slowed VC investment in the past two years, especially for non-AI companies.
Raised revenue across all surveyed markets was $9.1 billion in 2024, a 41% year-over-year (YoY) decline. Additionally, there was a 20% decline in YoY activity, with the number of contracts falling to 1,527. However, in the near future there may be signs of recovery as interest rates are falling around the world, leading to lower inflation, while early investment has shown resilience.
These characteristics are described in 2024 Venture Investment Report from the MENA research group MAGNiTT. The report covers the Aggregate Emerging Venture Markets (EVMs), looking at VC investments in the Middle East, Africa, Southeast Asia, Turkey, and Pakistan.
In the MENA region, startups raised $1.9 billion in 2024, down 29% year-on-year, but this was a slight drop in contrast to what was seen in Southeast Asia (45%) and Africa (44%).
In addition, the income levels in 2024 were still higher than in 2020, before the years 2021 and 2022, which means that the area is still growing.
There was an increase of 7% YoY in the number of sales (571) and the number of investors increased by 18% (up to 475).
And 47% of the total investment was in the $1-5M range, reflecting the change in the initial investment. However, MENA fell sharply in late activity.
Across the MENA region, Africa, Southeast Asia, Türkiye, and Pakistan, Fintech continues to show strong growth, with a revenue of $3.9 billion in 2024, showing that FinTech is thriving in emerging markets where developed financial services are very limited. .
The report indicated that this is providing opportunities for M&A activity in all areas of the region.
There was a clear division where investors from around the world focused on late-stage projects, such as Insider’s $500M round and Tyme’s $250M Series D. These types of business make up 53% of the 475 investors who supported startups in the region. Meanwhile, local traders tend to stick to the original stage.
This is due to the global outflow of 32% YoY to 94 in 2024, and the limited funds are difficult to find because the public markets are closed.
Philip Bahoshy, CEO at MAGNiTT, also said: “We expect a reduction in prices to start boosting liquidity in the next 6-9 months, paving the way for strong liquidity in 2025. He said, 2024 is “probably” at the bottom of the curve” in terms of reduction for money.
He added that the UAE, Saudi Arabia, and Qatar saw “year-on-year growth in employment” despite a decline in total remittances. The total number of investors has also increased significantly in MENA, indicating that investors, especially international ones, may have more confidence in launching the region.
