Middle East startups navigate funding crunch as global venture slump deepens
A once hot venture market for Middle East startups is cooling amid an enduring global investment slump.
Al-Monitor Pro Members
Samuel Wendel
Senior Market Research Analyst, Al-Monitor
July 26, 2023
A once hot venture market for Middle East startups is cooling amid an enduring global investment slump, creating a funding crunch that will further squeeze companies in coming months. Startups in the Middle East and North Africa (MENA) raised roughly $4 billion last year, a record total for the region, but Q2 of 2023 saw venture funding slump to levels not seen since 2020. Plus, three mega rounds alone accounted for roughly 50% of MENA’s venture funding in H1 2023. Still, there are relative bright spots — namely Saudi Arabia — and there is dry powder in the region. Gulf wealth funds are also flush with cash and courting exposure to tech globally. However, investors are largely sitting on the sidelines currently, a trend that could reshape the next era of growth in MENA’s digital economy.
