MAGNiTT's MENA Funding Evolution Report Traces Growth Of Regional Startup Ecosystem
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MAGNiTT, a platform that tracks and provides insights on MENA startups, has reached a milestone of listing over 5,000 startups in its portal, and marked the occasion by releasing research on MENA's startup world. Titled MENA Funding Evolution- How Has The MENA Investment Landscape Evolved, the study analyzes investments made in MENA’s top 200 funded startups during the period of 2005-2017. Shedding light on key themes such as time taken to raise investment in MENA, active investors, demographics of top startups, among other investment trends, MAGNiTT hopes that the study could help create transparency for MENA upstarts embarking on their fundraising journey.
“It has been an incredible journey and learning experience to see the growth of the ecosystem. It has also been fulfilling to create transparency and seeing the greater importance of reliable and credible data,” says Philip Bahoshy, founder and CEO, MAGNiTT. “I looked back at my financial model in January 2016, and our target for end of year 2017 was 5,000 startups, and we are proud to have been able to achieve that. Remarkably, people are still surprised that there are that many startups across the region and we believe there are still many more to capture as the ecosystem grows,” he adds.
According to the report, MENA's top 200 funded startups have raised US$2.1 billion in aggregate funding, and excluding late stage funding, the most value of investment was found to be in Series A ($404 million). The report also notes that MENA’s entrepreneurs “are fundraising every 12 months (on average)”, and that six of the top 200 funded startups have, in fact, already secured exits including Souq.com, Glambox and JadoPado, among others. “This [the 12 months period] echoes much of the anecdotal evidence that entrepreneurs claim that “they are always fundraising.” Much of the data shows that this is relatively similar to international benchmarks in the US and Europe,” notes Bahoshy.
As for signs pointing towards growth and maturity of the region’s startup ecosystem, MAGNiTT’s report finds that 55% of the top funded startups were all founded within the last five years. Within the region, UAE, Jordan, Lebanon, Egypt and Saudi Arabia’s startups account for 90% of total funding raised with UAE-based new ventures alone making up 46% of the pool. Perhaps in a positive sign for those apprehensive about the investor ecosystem in the region, the report finds that over 200 institutional investors have participated during the period. “500 Startups, Middle East Venture Partners (MEVP), and Wamda Capital have been the most active investors across MENA,” notes the report, besides highlighting others actively deploying capital including STC Ventures, Naspers, Silicon Badia, BECO Capital, and Arzan Capital.
“Given the ticket size involved [in late stage], you see from the data that it requires multiple institutional investors, and many of which are not investing in that later stage, which is why we have seen the emergence of international players, VC and startups, making strategic investments in regional startups,” says Bahoshy, commenting on the investor ecosystem trends.“While I believe there is a gap in that space, you hear in the media that many VCs are looking to focus on Series B and above with the launch of their new funds. As the market continues to mature we anticipate more startups requiring later stage investment before exiting, and more players entering to solve for that capital gap.”
For detailed results of MAGNiTT's latest reseach, visit their official page here.