Saudi startups raked in USD 400 mn in venture debt (VD) in 2023, rising 602% y-o-y, according to venture data platform Magnitt’s FY 2023 Venture Debt report. VD in MENA hit an all-time high of USD 757 mn during the year, with Saudi accounting for 53% of the region’s total.

UAE + Egypt round out the lion’s share: The UAE and Egypt together accounted for 39% of total venture debt across the region last year, according to the report. Startups in the UAE secured USD 353 mn in VD in 2023, up 222% y-o-y, while Egyptian startups secured USD 4 mn in VD, marking an 86% y-o-y drop.

The standout sectors: Fintech accounted for 79% of MENA's total VD lending in 2023, owed in large to BNPL giants Tabby and Tamara, which together raked in USD 600 mn of the total USD 601 mn financing for fintech players. Transport and logistics followed with USD 150 mn, and e-commerce had a seat at the table with USD 3 mn.

Despite the rise in VD funding value, funding volume dipped across the region: Venture debt transactions in the UAE dropped 25% y-o-y to six, while Egypt saw an annual decline of 75%, with two transactions. Saudi bucked the trend, doubling the number of venture debt transactions y-o-y to four in 2023.

A changing financing ecosystem: VD lending to equity financing ratio shifted to 28% in 2023, from just 1.4% in 2020.

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