Entrepreneur Middle East Publishes Special Report Looking Into The State Of Fintech In The MENA Region

At the end of Q3 2021, there were 206 fintech unicorns around the world, each worth over US$1 billion; 119 of these fintech unicorns were minted in the first nine months of 2021 alone.

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Entrepreneur Middle East, in partnership with Lucidity Insights, has published a special report titled Shaping the Future of Fintech: MENA Overview, which covers the role that countries and startups in the region are playing within the larger, global fintech ecosystem.

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2021 was a great year for fintech around the world. At the end of Q3 2021, there were 206 fintech unicorns around the world, each worth over US$1 billion; 119 of these fintech unicorns were minted in the first nine months of 2021 alone. In contrast, only 27 fintech unicorns were minted the year prior. After the COVID-19 pandemic forced many consumers to utilize digital services across the board, fintech has been booming over the past two years. As consumers have flocked to digital apps to meet our banking, payments, investment, and trading needs, it's no wonder venture capital (VC) money is flocking to fintech startups, looking for the next big fintech unicorn.

In 2021, $1 out of every $5 spent by venture capital funds went to fintech startups. This equated to $132 billion in fintech fundraising in 2021. For comparison, 2020 funding for all fintechs globally sat at $49 billion, just 37% of the 2021 total. Whether it's in digital payments, digital lending, wealthtech, insurtech, digital banking, buy-now-pay-later (BNPL) platforms, or robo-advising and exchanges, every fintech vertical grew in 2021. In the MENA region, fintech was the leading sector for venture capital investments made in 2021.

In this special report, we take a look at fintech from a Middle East and North Africa (MENA) standpoint. With a collective population of 463 million inhabitants across MENA, the majority of whom speak the same languages and have cultural similarities, the report highlights the opportunity and potential for fintech in the region, and for fintech companies to geographically expand their territories within the MENA region.

The report also points out the extreme variances between countries that make up the MENA, some of which have the highest wealth, consumer spending, internet and smartphone penetration rates in the world, and others that have some of the lowest rates. The report also identifies the top five markets for fintech in the region, and illustrate why these are the power players and the markets to watch- a list that includes Israel, the United Arab Emirates, Egypt, Saudi Arabia, and Morocco. Israel is the region's fintech power player, with over 600 fintech companies in its ecosystem, and home to over a dozen fintech unicorns. Israeli fintech startups Melio, which is valued at over $4 billion, and Papaya Global, a global payroll and payment management platform, both raised $250 million each in 2021. The United Arab Emirates' fintech ecosystem follows, with an ecosystem of over 500 fintech companies.

The report also highlights a number of fintech players that are making waves in the MENA region. We deep-dive into a case study on ValU, the app that's geared up to be the market leader in Egypt's BNPL market forecasted to reach $1.6 billion by 2028. Cashee is a Dubai-based startup that has developed a fintech solution targeting the 37.3 million teens in the Middle East; it is looking to empower youth to make their own financial decisions, while providing tech-enabled parental controls on spending habits.

The report also highlights various payment solution providers such as Saudi Arabia's Geidea, and Egypt's PayTabs. Also included is an interview with PayTabs Egypt's General Manager, who discusses how BNPL solutions are helping a nation of largely unbanked people get access to financial services through fintech. No MENA fintech report would be complete without a look at STC Pay's growth story, and the path it took to become Saudi Arabia's first fintech unicorn in November 2020, when they sold a 15% stake to Western Union for $200 million. As fintech unicorns are getting minted around the world at unprecedented rates, the Middle East and North Africa region is gearing up to follow the global trend with the investments made in the past 12 months.

Check out the full report for yourself by downloading it from this link.

Related: The Recap: Leaders In Fintech Awards 2021