q3 2019 mena venture investment summary · 3 2019 mea enture investment summary 9 top deals 08....

Q3 2019 MENAVenture Investment Summary

MAGNiTT report prepared for GITEX Future Stars 2019

magnitt.com gitexfuturestars.com

Q3 2019 MENA Venture Investment Summary 3

Founder and CEO at MAGNiTT

Head of GITEX Future Stars

ReportForeword02.

Philip Bahoshy

Annabelle Mander

The summer is over! The last few months have been busy, and we expect the rest of the year to be no different with events, conferences, meetings and investments. This Q3 2019 MENA Venture Investment Summary, prepared for GITEX Future Stars (GFS) 2019, serves as an up-to-date overview of the startup and venture capital ecosystem in the region. GFS is an ide-al opportunity to bring together all stakeholders post summer with continued interest from governments, corporates along with regional and international investors in MENA startups.

Q3 2019 continued the growth of venture funding into MENA-based startups. Year to date (YTD), $517M was invested in 354 deals. These figures are still ahead of 2018 in terms of funding, with a slight increase in the number of deals as well. Moreover, there have been sev-eral underlying trends that show the maturing stage of the startup ecosystem.

A new record has been hit! 2019 YTD has seen as many exits as the entire year of 2017, the previous high. This includes exits such as the blockbuster $3.1B deal of Careem and Uber, as well as the initial public offerings of Egypt’s Fawry and UAE’s Network International. These exits have multiple benefits – a positive externality is that we have seen examples of employ-ees of these successfully funded and exited companies such as ex-Careemers receiving fund-ing, including Swvl, MaxAB and Trella. These success stories and their alumni show lucrative opportunities for venture capital as an asset class and aids investors in raising their second, third, and subsequent funds.

I hope you enjoy the Q3 2019 update, as we look forward to the last quarter of the year!

It’s a great time to be a startup, especially in the UAE; the ecosystem is buzzing! The most promising aspect being the ability to secure exits as seen by the region’s biggest ever tech acquisition, Careem, at US$3.1B, as well as Souq.com for US$580M, Namshi, and even smaller companies like Glambox and Almosafer.

Naturally, this optimism and booming tech culture is also being reflected in this edition of GITEX Future Stars. The event has grown to include over 750 startups from 75 countries, while our investor programme has grown multifold to host over 400 top-ranked investors from around the world. We also address the key challenges, topics and trends taking a leading role in the startup world – the influence of Generation Z; scaling up in challenging market conditions; solving the ethical dilemma; and many more.

I’m really proud to welcome you to this year’s edition, which promises to be a memorable one with 19 tech sectors, a big spotlight on the creative economy, multiple pitch competitions, and a panel of superstar speakers. GITEX Future Stars is now one of the most important platforms for the worldwide startup ecosystem. We look forward to welcoming you this 6-9 October!

For in-depth funding evolution insights and commentary, visit MAGNiTT.com and purchase the full 100+ page report


Executive Summary03.

The startup ecosystem is growing quickly in the Middle East and North Africa (MENA), with $517M being invested in 354 deals in 2019 thus far. Below are the key data-driven highlights from the Q3 2019 MENA Venture Investment Report.

Total funding in 2019 YTD tops 2018 YTD, deals slightly up

2019 YTD saw $517M in total funding, an increase of 30% compared to the same period of 2018, with a 3% increase in the number of deals. Moreover, the average deal size is at an all-time high of $2.5M when excluding Souq & Careem.

The UAE remains top recipient of funding, Egypt tops in deals

The United Arab Emirates (UAE) continued to account for the largest share of total funding, 62% in 2019 YTD, while Egypt accounted for the highest number of deals, 27% in 2019 YTD.

FinTech maintains its top position by number of deals

The FinTech industry continued its dominance by number of deals in 2019 YTD, accounting for 14% of all deals. This is an increase of 3% to the same period in 2018, as more investors and accelerators invest in FinTech startups.

The number of investors surpasses full-year 2018

The number of investors in MENA-based startups has increased every year in recorded history, and 2019 YTD has surpassed full-year 2018, as 163 investors invested in startups in 2019 already, compared to last year’s 159.

The number of exits is equal to full-year 2017’s all-time high

With landmark exits in 2019 YTD, including the first unicorn exit with Careem being bought by Uber for $3.1B, the year is already on par with 2017 with 20 startup exits, which is another all-time high.

$517M 354TOTAL FUNDING 2019 YTD

NUMBER OF DEALS 2019 YTD


MENA yearly startup funding ($M) and deals (#)

MENA quarterly startup funding ($M) & deals (#)

Yearly Funding Evolution04.

$517M was invested across 354 deals in 2019 YTD, which marks an increase of 30% in total funding compared to the same period in 2018, with a 3% increase in the number of deals over the same period. Moreover, the average deal size of disclosed deals, excluding Souq & Careem, is at an all-time high of $2.5M in 2019 YTD.

Disclosed Funding

MAGNiTT Undisclosed Funding Estimate

Funding of Souq and Careem

Deals

Disclosed Funding

MAGNiTT Undisclosed Funding Estimate

Funding of Souq and Careem

Deals

Q3 ‘19Q2 ‘19Q1 ‘18 Q2 ‘18 Q3 ‘18 Q4 ‘18 Q1 ‘19

$100M

$117M

$96M

$113M$168M

$112M

$200M

$459M

$247M

$206M

$40M

$268M

$194M $32M$246M

109 105

131134

121

9983

$60M

$232M

$138M

2015

$435M

$150M

$646M

2017 2018

$200M

$855M

$554M

2019 YTD

$517M

$476M$294M

$625M

$958M

2016

354


Investor Landscape05.

More investors than ever before – 163 – invested in MENA-based startups in 2019 YTD, indicating an increasing appetite for the venture asset class. This includes established venture capital firms such as 500 Startups and accelerator programs such as Flat6Labs, as well as an increasing number of new accelerator programs being launched to help early-stage startups scale.

Investor rank by number of disclosed investments in MENA-based startups in 2019 YTD

Accelerators

Institutional Investors & Angel Groups

10+

5-9

3-4

2AlnamlahFamilyGroup


Geography Breakdown06.

The United Arab Emirates (UAE) continues to account for the lion’s share of total funding, 62% in 2019 YTD, but we are seeing emerging ecosystems that increasingly account for more deals, including Egypt, Saudi Arabia and Tunisia. Not only that, Egypt ranked first by number of deals in 2019 YTD for the first time this year.

UAE

Egypt

Saudi Arabia

Jordan

Lebanon

Egypt

UAE

Lebanon

Saudi Arabia

Tunisia

62%

13%

9%

5%

5%

27%

25%

11%

9%

5%

MENA’s top 5 countries by number of deals (#) and total funding ($) in 2019 YTD

% Change (‘19 YTD vs ‘18 YTD)


% of total ‘19 YTD


21%

1%

3%

-1%

-12%

0%

0%

2%

1%

2%

Funding

Deals

$517Mtotal

funding

354total deals


Industry Breakdown07.

Unchanged from H1 2019 and 2018, FinTech received the largest number of investments in 2019 YTD, accounting for 14% of all deals – an increase of 3% compared to the same period in 2018, as investors and accelerators increasingly focus on the industry. Real Estate and Renewable Energy’s total funding was mainly due to the $100M and $65M raised by EMPG and Yellow Door Energy, respectively.

MENA’s top 5 industries by number of deals (#) and total funding ($) in 2019 YTD

Real Estate

E-Commerce

Delivery & Transport

Renewable Energy

FinTech

FinTech

E-Commerce

Delivery & Transport

Food & Beverage

IT Solutions

19%

17%

16%

13%

6%

14%

10%

8%

7%

6%





19%

-11%

10%

11%

-4%

3%

-2%

1%

1%

0%

Funding

Deals

$517Mtotal

funding

354total deals


Top Deals& Exit Trends08.

Q3 2019 has not seen the same blockbuster later-stage deals as the beginning of the year, despite Egyptian MaxAB raising the largest seed round in MENA at $6.2M, as well as cryptocurrency exchange RAIN raising the largest seed round of any Bahraini startup, receiving $2.5M in funding. The number of exits, however, has increased steadily to an all-time high of 20 in 2019 YTD – the same number of exits that took place in the entire year of 2017.

Top 5 funding rounds in MENA in Q3 2019

Evolution of exits (#) in MENA

2019 YTD2012 2013 2014 2015 2016 2017 2018

78 9

16

13

20

17

20

#1 #2 #3 #4 #5

Egypt

Seed

$6.2M

Lebanon

Series A

$4.0M

Algeria

Series A

$4.0M

Bahrain

Seed

$2.5M

Saudi Arabia

Pre-Series A

$2.0M


About Us09.

About MAGNiTT | Key Stats

MAGNiTT is structured around 3 core pillars

About GITEX Future Stars

More than an event – GITEX Future Stars is the startup hub connecting game-changing innovators, Gen-Z entrepreneurs, superstar investors, futurists and tech geeks from around the world. A quick look at what’s on this year:

12,500+Startups

Database Access: Empower your team by accessing MENA most comprehensive data platform.

Startup Sourcing: Discover and connect to startups that meet your objectives.

Marketing Promotion: Get your message into the inbox of the people that matter.

Data Research Community

Bespoke Reports: Get monthly and quarterly investment insights, research and analysis.

Insights & Analytics: Make better investment decision! Access all MENA funding and exits from 2008 to date.

Subscription Plans: Unlock the full potential of MAGNiTT to stay ahead.

Ecosystem News: Be in the know! Subscribe to our daily and insights newsletter and Whatsapp alerts.

Funding Application: Grow your startup. Apply for funding from MENA’s most active investors.

Startup Jobs: Hire quality talent by posting your job for free or find your dream startup job.

40+Research Reports

400+Investors

300+Jobs

A chance to meet 750+ of the world’s hottest startups, coming from 75 countries

See the tech that’s making waves across 19 sectors, from AI to Blockchain To Sports Tech & more

250+ renowned speakers take the stage to share their success secrets and stories in the GITEX Technology Week & GITEX Future Stars combined conference programme – featuring over 290 hours of talks across nine industries

Mingle with 400+ top-ranked investors, accelerators and incubators coming from around the world

Top startups battle it out in the Supernova Challenge pitch competition, offering a bigger prize pool of USD 200,000 this year

Free learning sessions covering Gen-Z insights (NXG Programme), Mentorship Clinics, Creative Economy Program, Saudi Innovation Day and more

AI workshops powered by INSEAD

The G2i Summit is an exclusive, invitation-only conference for both regional and global leading venture funds, LPs, family offices and institutional and private investors.

GITEX Future Stars is inspired by and hosted together with GITEX Technology Week, the Middle East, North Africa & South Asia’s biggest technology event, gathering 4500+ exhibitors and over 100,000 visitors from 140 countries

For in-depth funding evolution insights and commentary, visit MAGNiTT.com and purchase the full 100+ page report

Be the first to knowbreaking startup news!

1. Scan me2. Send ‘SUBSCRIBE’

MAGNiTT is working with GITEX Future Stars to give you daily updates on the MENA startup ecosystem through WhatsApp

straight to your phone! Just scan the QR code below to get started.


magnitt.com gitexfuturestars.com

q3 2019 mena venture investment summary · 3 2019 mea enture investment summary 9 top deals 08....

Documents