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KSA, UAE Lead MENA’s Q3 2024 VC Boom

KSA, UAE Lead MENA’s Q3 2024 VC Boom
Image Source: MAGNiTT

The venture capital landscape experienced notable shifts in Q3 2024, MAGNITT reports in its latest reports on KSA and the UAE. Most importantly, the reports reveal distinct investment dynamics with broad implications for the MENA region’s startup ecosystem.

KSA: A Magnet for MEGA Deals

Saudi Arabia continued its upward trajectory in venture funding, securing USD 412M in the first half of 2024. MEGA deals, like the USD 130M  raised by Salla, played a pivotal role in bolstering the Kingdom’s position.

Despite a slight year-on-year decline, Saudi Arabia’s venture ecosystem remains resilient. Most interestingly, non-MEGA deal funding recorded an 83% increase signaling a solid foundation for early-stage startups.

Also, the Kingdom accounted for 39% of MENA’s total funding, outperforming its peers in capital deployment. FinTech continues to dominate the Saudi landscape, although other sectors, such as e-commerce, are also making waves​.

UAE: Steady Growth in Early-Stage Investments

At the same time, the UAE demonstrated resilience with a 12% increase in deal volume. The rise allowed it to maintain its status as the most active market in the region.

While overall funding dipped by 13%, non-MEGA deal funding saw a 7% increase. The data reflects investor confidence in the country’s early-stage ventures.

With international investors becoming more prominent, particularly those from the U.S. and U.K., the UAE has solidified its role as a global hub for venture capital. That is particularly true for the FinTech and transport​ sectors.

Implications for Startups and Investors in Q3 2024

For startups in both KSA and the UAE, these trends highlight growing opportunities in early-stage financing during Q3 2024. While MEGA deals remain critical for scaling, the surge in non-MEGA funding indicates a supportive environment for innovation.

Investors, on the other hand, are likely to benefit from the growing presence of international capital. That is key for fueling competition and driving up valuations, especially in the FinTech sector.

Regional Trends Challenge Global Norms

Interestingly, while global venture funding has faced significant challenges, the MENA region—particularly KSA and the UAE—continues to attract substantial investment. In contrast to global markets, where funding has contracted significantly, the MENA region remains resilient, driven by both domestic and international capital.

This divergence underscores the region’s potential as a key player in the global startup ecosystem, making it a hotspot for venture capital in the years to come​.

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