Mena start-ups raised an archive $1bn in financing in 2020
13 January, 2021
Start-ups in the centre East and North Africa secured record financing greater than $1 billion found in 2020, although the administrative centre was pass on across fewer offers sealed mainly found in the first one half of the entire year, according to data program Magnitt.
The amount raised was a 13 per cent gross annual increase and was the first time that fundraising for Mena start-ups broke through the $1bn barrier, Magnitt's 2021 Emerging Venture Markets report showed. The capital was invested into 496 companies, that was 13 per cent less than the previous year.
Start-ups raised the majority of the $1bn in funding through the first half a year of the year when they secured $725m, a good 29 per cent increase from the $563m secured in the primary half of 2019.
The next half of 2020 was more muted, even so, as the Covid-19 pandemic took its toll on the global economy. Start-ups raised $306m through the period, down 13 % from the second half of 2019. The capital was invested in 198 deals, that was a 35 % decline from the same period in 2019.
“2020 was a rollercoaster time that highlighted the importance of leveraging info to make opportunities obvious across borders,” Philip Bahoshy, leader of Magnitt, said. “Covid-19 speedily accelerated the adoption of technology across emerging markets, creating larger market segments and more prospects to scale."
The Covid-19 pandemic has plunged the global economy right into a deep recession, unleashing havoc on sectors from air transport, tourism, supply chains, manufacturing to shipping. On the other hand, businesses operating in major sectors such as health care and technology have seen an uptick popular.
The pandemic has prompted investors to re-allocate capital from early stage ventures to bigger-ticket seed and Series A investments which range from $100,000 to $3m, Magnitt said.
Shareholders also opted to rear industries such as e-commerce and FinTech, which found increased demand during the pandemic and retained both top spots by quantity of deals.
Together, e-commerce and FinTech garnered nearly a quarter of most deals on 2020, according to Magnitt. Investment in health care start-ups more than tripled to $72m through the pandemic.
Within the spot, the UAE, Egypt and Saudi Arabia accounted for 68 per cent of total deals disclosed in 2020.
The UAE, the Arab world's second-biggest economy, received the largest share of funds raised and ranked first in conditions of the number of bargains, the report showed.
Start-ups found in the UAE attracted more than half of the total capital raising into the area and just over a quarter of the full total Mena discounts. Its total show of funding rose 5 per cent to $579m but its show of total offers dropped 17 per cent.
Start-ups in Saudi Arabia, the Arab world's biggest economy, sealed 18 per cent of the region's discounts and 15 % of the full total funding. The essential oil producer registered the highest increase in the quantity of deals, up 35 % year-on-12 months, and financing flows to the kingdom's start-ups rose by 55 %.
Bahrain recorded the highest increase in financing, with capital flows to its start-ups tripling year-on-year to $20m.
Lebanon, which is facing the worst type of monetary crisis in its record, saw the number of deals stop by 64 % to 16, falling out in clumps of Magnitt's Top 7 Mena country deal position in 2020.
Topping the five biggest financing rounds in Mena, UAE-based EMPG raised $150m in its Series E round in April, followed by the UAE's Kitopi with $60m and Egypt's health care start-up Vezeeta with $40m.
Last year, a total of 243 investors participated in at least 1 funding round in Mena, with overseas funds accounting for 22 % of all productive investment institutions, Magnitt reported.
The amount of international investors risen to 54 in 2020 from 51 a year earlier, while the number of active investors remained relatively stable - up 3 % at 243.
The impact of the pandemic was highlighted through the third quarter of 2020, when Mena start-ups recorded 91 deals, the cheapest in eight quarters. The 4th quarter showed signals of a recovery, with a 57 % uptick altogether funding.
Excited, Magnitt expects you will have no mega deals greater than $100m over the Mena area in 2021. In addition, it expects Saudi Arabia will surpass Egypt regarding both the final number of investments and total capital deployed in venture funding this year.
Source: www.thenationalnews.com