According to a report, the UAE remains ahead of its peers in the MENA markets when it comes to non-mega funding for start-ups. In the first quarter of the year, the UAE secured more than $150M through 30 deals. Mega funding refers to deals exceeding $100M.
The report by start-up data platform Magnitt’s Q1 2023 UAE Venture Investment report reveals that over 60 percent of the funding in the UAE came from the top three rounds, involving companies such as Tabby, Qlub, and Cofe, according to The National News.
UAE Leads MENA Markets in Non-Mega Funding for Start-ups
These three businesses collectively raised around $100 million. Tabby, a Dubai-based buy now, pay later platform, raised $58M in a series C round, while Cofe received $15M to expand into new markets, and Qlub raised $25M for growth.
Other notable funding rounds in the first quarter include Numi, a metaverse start-up that secured $20 million, and education technology company almentor, which raised $10M.
FinTech companies Alaan and Investsky also obtained $10M and $5M, respectively, during this period, as per the Magnitt data.
“After a record year of exits in 2022, we predicted that given the challenges of raising funds in an environment of higher interest rates, start-ups will likely seek acquisitions or consolidations as an alternative to fund-raising,” the report said.
“This was reflected in the M&A activity in the UAE, as it recorded a 200 per cent increase compared to the quarter before and also reported more exits than in first quarter of last year.”
“Cross-pollination remained a popular theme as several Turkey-based ventures acquired start-ups based in the UAE.”
M&A Activity in the UAE Increases by 200%
In the first quarter of this year, the UAE accounted for 10 out of 11 exits recorded in the MENA region, solidifying its position as the Arab world’s second largest economy.
The exits included various companies such as Knowledge Planet UAE, Smileneo, ServiceMarket, paymennt.com, Namshi, and Botim, according to the report.
In January, Astra Tech, a Dubai-based technology-focused investment firm backed by Abu Dhabi’s G42, acquired Botim, a popular internet calling platform in the Middle East.
The acquisition aims to integrate Botim’s 90 million registered users, with 25 million active users, into Astra Tech’s upcoming “ultra app” that caters to diverse consumer needs.
During the first quarter, Al Dhabi Capital, Venom Ventures, and Arbor Ventures emerged as top start-up investors in the UAE, with investments of $25M, $20M, and $12M, respectively.