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A reality check looms for Middle East's tech startups 

An employee at "al-Gameya", a tech startup the runs an app to facilitate for strangers to create an informal money-pooling association to provide access for money in time of need, uses a computer with the official Facebook page of the application open on a web browser, at the company offices in Egypts capital Cairo on September 12, 2021. - Cash-strapped Egyptians fearful of banks have long relied on a "gameya" to access money in time of need, but now tech startups are cashing in on the practice. Such cooper
To:

Al-Monitor Pro Members

From:

Samuel Wendel

Senior Market Research Analyst, Al-Monitor

Date:

Nov. 9, 2022

Bottom Line:

After years of promising growth, MENA’s startups appear set to experience a course correction amid a broader global investment slowdown. Regional venture investment totals sagged notably in Q3 and are likely to continue falling against a backdrop of economic headwinds. Crucially, red flags are flying in Egypt as key startups struggle — most notably Capiter, a B2B e-commerce platform now embroiled in scandal after burning through $33 million in funding in barely a year. It’s a sign that regional startups need to prioritize profitability and fundamentals over aggressive growth as operating conditions worsen. Still, startups in Saudi Arabia and the United Arab Emirates are enjoying significant support, and the sector has matured enough across MENA that it should avoid a catastrophic collapse.