The year 2021 will be an excellent year for regional startups as the sector matures and starts to reap the benefits of business-friendly policies implemented in the first quarter.
Both entrepreneurs and venture capitalists have learned valuable lessons from the venture capital space in order to continue mobilizing investment in the startup industry.
According to research by the UAE-based leading enterprises Wamda, startups in the Middle East and North Africa (MENA) region have raised $170 million in March, a six percent rise month-on-month, across 43 deals. This brings the total amount raised in the first quarter of this year to $396 million through 125 transactions, indicating a strong start to the year.
The UAE once again led the charge in terms of amount invested with $130 million invested in 11 startups in March. This was largely due to two companies, Pure Harvest ($50 million) and Lyve ($35 million), both of which specialize in agritech.
Fintech has drawn the highest number of deals with 10, but it was agritech and logistics that have raised the highest amounts, as per the research.
Startup Investments
In the first quarter, the UAE ($256 million raised across 38 deals), Egypt ($22 million across 34 deals) and Saudi Arabia ($76 million across 28 deals) account for the bulk of investment deals and value. “These three countries continue to lead the way in terms of startup and investment operation, and with the launch of two new funds in Egypt this year, we can expect even more from the region’s most populous nation,” the study noted.
Startups need to raise funds on a regular basis because they are usually unprofitable for the first three to five years of their life. The venture capital is designed to take this risk. The valuations serve as a foundation for dilutions and provide benchmarks for venture capitalists to disclose to their limited partners.
