MENA Start-ups Garner Nearly $4 Billion in 2023, Debt Financing Soars

In 2023, start-up ventures throughout the Middle East and North Africa (MENA) region collectively amassed an impressive $3.98 billion in funding, marking a modest 1% rise compared to the figures of the previous year.

This data comes from a comprehensive report jointly presented by Wamda and Digital Digest.

Breaking down the figures, the report reveals that these funds were generated through 498 separate financial transactions, encompassing various forms of financing including debt.

When focusing solely on equity-based financing, excluding debt, the MENA start-ups secured $2.2 billion across 488 deals.

This represents a notable 36% downturn from the $3.45 billion amassed in 2022, which was spread across a more substantial 786 deals—a 38% decrease in deal volume.

Interestingly, debt financing emerged as a significant growth area in 2023, skyrocketing by an astonishing 256% to reach a total of $1.77 billion.

The month of December 2023 particularly stood out, witnessing 60 start-ups securing a record-breaking $1.15 billion.

This represents an astounding 825% surge compared to the funding levels observed in December of the preceding year.

A notable contributor to this surge was the FinTech company Tabby, headquartered in Saudi Arabia and founded in the UAE, which secured a whopping $700 million in debt financing from J.P. Morgan. This massive injection of capital precedes Tabby’s eagerly anticipated initial public offering (IPO).

Excluding the substantial financing garnered by Tabby, the remaining start-ups in the MENA region still managed to raise a commendable $456 million in December 2023. This reflects an 18% month-over-month increase compared to November 2023 and a staggering 253% surge when juxtaposed with December of the previous year.

Geographically, the majority of these recent financing deals were concentrated primarily in the United Arab Emirates, Saudi Arabia, and Lebanon, highlighting these nations as key hubs for burgeoning start-up activity in the MENA region.

Cleofe Maceda / Zawya