The Middle East and North Africa tech startup scene is sizzling, fueled by rapid growth in the United Arab Emirates and Saudi Arabia, a new crop of cash-rich investors and Egypt’s newest unicorn.
There’s a new entrepreneurial energy from Rabat to Riyadh, accelerated by the rise of sovereign wealth funds as major investors and growing smartphone penetration. Startups attracted a record-breaking $3.94 billion in funding in 2022, with the heaviest deal concentration in the UAE, Saudi Arabia, and Egypt, according to Wamda, a regional thought leader and tech investor.
While those numbers may seem modest compared to more advanced tech startup markets or even emerging market peers (Southeast Asian startups, for example, raised nearly $18 billion), the rise of sovereign wealth fund investments and government mandates to grow tech ecosystems coupled with intense competition to attract entrepreneurs portends robust growth over the coming years.
“The sovereign wealth funds have been game changers in the region,” Fadi Ghandour, the founder of Aramex and executive chairman of Wamda, said in a Zoom conversation. “They have a mandate to enable ecosystems locally. They can move the needle with their big checks, but it’s not just the money. This also moves the regulators to act and build the best environments for entrepreneurs. This also attracts talent. All three – funding, regulations, and talent – are in the best place I’ve ever seen it.”
Source: Forbes
