Saudi Arabia has become the top market for venture capital funding in the Middle East and North Africa (MENA) region, attracting over $1.38 billion of investment in 2023. This marks the second consecutive year that the Arab world’s largest economy has reached this billion-dollar funding milestone, with venture capital investments increasing by a third compared to the previous year. Four mega deals, each worth at least $100 million, in the financial technology and e-commerce sectors were the primary driving forces behind this surge in funding. Meanwhile, the United Arab Emirates, which was previously the leader in the MENA region, experienced a 45% decline in funding to $691 million. However, it still maintained its position as the top destination for deals with 158, compared to Saudi Arabia’s 125. The fourth quarter of 2023 was particularly successful, with two mega rounds helping Saudi Arabia-based buy-now-pay-later platform Tabby and FinTech Tamara achieve unicorn status.
The report also highlighted the continued growth and importance of the start-up ecosystem in Saudi Arabia and the UAE. Both countries have implemented various initiatives to support the growth of start-ups, including mentoring programs, market access, and opportunities to tap into the technological infrastructure provided by the government and private companies. The top five industries receiving funding in the MENA region were fintech and e-commerce, followed by healthcare, education technology, and IT solutions. However, there was a 40% decline in funding for these sectors collectively in 2023 compared to the previous year.
