Saudi Arabia relinquished its MENA startup funding lead in 2024, raising USD 700 mn across 186 transactions, dropping 70% y-o-y, according to Wamda’s 2024 Investments in MENA report (pdf). Last year’s tally places the Kingdom behind the UAE, which drew in USD 1.1 bn — almost half of regional funding — across 207 transactions.

The drop in numbers is partly explained by a disparity in debt funding: 2023’s tally was buoyed by USD 1 bn in debt. Excluding this, the drop in investment numbers narrows from 70% to 44% y-o-y. Debt accounted for just USD 34.3 mn of investments in our startup scene last year.

The standout sectors: SaaS startups attracted the most capital in the Kingdom, securing USD 177 mn across 27 transactions. Fintech followed closely with USD 171 mn across 24 startups, while mobility startups raised USD 86 mn from four agreements. The majority of investments were driven by local venture capital firms and government-backed programs to bolster the tech sector in keeping with the diversification agenda.

Saudi investors were also the most active in the region, accounting for 175 agreements and surpassing the UAE (98), Egypt (57) and the most active foreign investor, the US (100). Among Saudi-based investors, PIF-backed Sanabil 500 ranked second in MENA with 14 agreements.

ON THE REGIONAL FRONT-

The MENA region’s total startup investments declined by 42% y-o-y to USD 2.3 bn in 2024 across 610 transactions. Rounds taking place without debt amounted to USD 2 bn, while debt-enabled transactions reached USD 331 mn.

The most popular sectors in 2024 for venture investors: The fintech sector accounted for 30% of total investments in the region in 2024, with USD 700 mn injected into 119 fintech startups — followed by web3 at USD 260 mn, and e-commerce at USD 253 mn in investments.

Early stage investments accounted for the bulk of investments last year with a total exceeding USD 1.2 bn across 300 startups and ranging from pre-seed to Series A stages. The later stages reached a total of USD 332 mn across 10 transactions, while only two startups secured pre-IPO rounds with a value of USD 143.3 mn.

The B2B model took the lead with USD 1.2 bn in investments across 325 startups, followed by the B2C field with USD 717 mn, with the hybrid model amounting to USD 311.7 mn and direct-to-consumer to USD 25.5 mn.

How do these figures compare? Wamda’s estimate for total investments in the region was higher than Magnitt’s, with total startup investments amounting to USD 1.5 bn, marking a 29% y-o-y decline in comparison to 2023. Both reports agree that early-stage investments are becoming more appealing to investors than late-stage rounds.

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