Arab News, Tue, Mar 05, 2024 | Shaban 24, 1445
Saudi Arabia startups close February with $16.3m in funding
Saudi Arabia:
Saudi Arabia emerged as a significant player in the startup ecosystem this
February, raising $16.3 million, making it the second-highest amount secured by
any country across the Middle East and North Africa.
According to Wamda’s monthly investments report
for the region, the Kingdom secured the funding across seven transactions,
marking a 48.18 percent increase from a total of $11 million in January 2023.
The UAE led the region in startup funding in the
second month of 2024, securing $65.6 million across 22 deals. This was greatly
influenced by a $35 million sum raised by Flare Network to take over half of the
total number of deals.
Investments in MENA startups amounted to $88.7
million in February, after 2024 kicked off at a slow pace with $86.5 million in
January. The figure represented an 88.28 percent decrease from the $760 million
raised in February 2023.
Egypt saw only two startups raising $4.6 million
in total.
“Web3 providers are the market’s rising stars this
month, having raised $39 million in three rounds, led by Flare Network’s $35
million,” the report stated.
In terms of sector performance, foodtech showcased
a robust performance, securing $21 million across two deals, with a notable $12
million directed toward The Cloud’s Series B round.
Fintech and logistics startups raised $6.9 million
and $5.4 million, respectively.
Seed-stage ventures continued to dominate
investment, with a total of $25.5 million raised by 11 companies.
Business-to-consumer startups received a
significant portion of funding, amounting to approximately $55 million across 16
transactions, while business-to-business enterprises secured $18.4 million
through 17 deals.
Firms led by men continued to dominate the
industry, accounting for over 55 percent of the total transaction value.
Startups led by mixed-gender teams received 44.6 percent of the funds, while
those led by women captured only 0.2 percent of the total investment.
Additionally, last month saw 14 new ventures not
disclosing their fundraising amounts. A conservative estimate of $100,000 each
was allocated to 12 of these companies.
Notable recipients included Bookr, PIESHIP, and
PhysioHome. Magpie Protocol and Groene Point received $1 million each for their
undisclosed rounds.
In terms of venture capital activity, notable
developments included the establishment of the Falcon Foundation in the UAE,
with plans to invest $300 million in open-source generative AI models.
The non-profit Falcon Foundation is dedicated to
advancing the development of open-source generative artificial
intelligence models and building sustainable ecosystems around projects that
accelerate technology development, according to a press release.
Ray O. Johnson, CEO of the Technology Innovation
Institute, stated: “We’re committed to fostering transparency and collaboration
in AI. Extending the UAE’s collaborative spirit into AI development, we set new
standards for openness, and we encourage all other entities that support open
source from around the world to join us.”
Jordan’s Innovative Startups and SMEs Fund
contributed $5 million to the MENA-focused initiative, MSA Novo.
MSA Novo is a multi-stage investment firm focused
on emerging markets, according to its website. It also provides global best
practices and institutional support to its portfolio companies, enabling them to
scale to regional leaders.
“As a responsible investor in venture capital
investment, MSA Novo is committed to building a better business for communities
in the region and around the world,” the firm’s website says.
MSA Novo says it integrates environmental, social,
and corporate governance to not only serve its goals but also as a powerful tool
to further its investment impact, with a policy aiming to incorporate material
ESG considerations into investment decisions with the objective of integrating
sustainability elements into the fund’s investment process and improving the
long-term financial outcomes.
COTU Ventures launched a $54 million inaugural
fund, while Globivest completed the second close of its first initiative.
“We are on a mission to transform the culture of
venture capital in the Middle East by setting the standard for others to
follow,” COTU says on its website.
“We are the Champions Of The Underdog. We help
people become extraordinary by showing them how to believe in themselves when
they are at the loneliest, earliest, and most challenging parts of their
journeys,” according to the firm’s manifesto.
Globivest is a venture capital firm on a mission
to “break the myth that opposes capital returns to impact-driven models.”
According to its website, the company focuses on
innovative and scalable early-stage startups.
The firm seeks to establish long-term
relationships with visionary entrepreneurs while adding clear value in strategy
and execution.
Sawari Ventures also announced plans for a $150
million fund to support Egyptian businesses without specifying a timetable.
The Cairo-based venture capital firm invests in
knowledge and innovation-based technologies across North Africa.
“In our part of the world, everywhere you look,
there are huge opportunities to be captured and entire industries ripe for
transformation,” the company says in its website.
The firm’s objective is to enable entrepreneurs in
the area to generate innovative solutions.
Sawari Ventures believes this will drive the
region’s economies for years to come.
The company invests in sectors including consumer
internet, fintech, and ed-tech, as well as health tech, deep tech, and
e-commerce.
These insights are a result of a collaboration
between Wamda and Digital Digest, providing comprehensive monthly reports on the
startup ecosystem.