The Middle East and North Africa (MENA) region saw a troubled quarter for startup ventures in Q2 2023, with funding plunging 26% from the previous quarter to $1.4 billion. This is the lowest quarterly funding figure for the region since Q1 2020.

There are a number of factors that contributed to the funding plunge, including the global economic slowdown, the war in Ukraine, and rising inflation. These factors have made investors more cautious and have led to a decrease in the number of deals being done.

The decline in funding was particularly pronounced in the early-stage segment, with deals worth less than $5 million falling by 40%. This is a worrying sign, as early-stage funding is essential for the growth of startup ventures.

Despite the funding plunge, there were some bright spots in the MENA startup ecosystem in Q2. For example, the Egyptian fintech company Fawry raised $200 million in a Series D round, the largest funding round for a MENA startup in Q2.

Overall, the funding plunge in Q2 is a setback for the MENA startup ecosystem. However, there are still some promising signs, and the ecosystem is well-positioned to recover in the coming quarters.

What does this mean for you?

If you are an investor, the funding plunge in MENA startup ventures is a sign that the region is facing some challenges. However, there are still some promising startups in the ecosystem, and it is worth doing your research before investing.

If you are a startup founder, the funding plunge is a reminder that the fundraising environment is challenging. However, there are still investors who are willing to back promising startups, and it is important to be prepared to pitch your company to investors.

Conclusion

The funding plunge in MENA startup ventures in Q2 is a setback for the ecosystem. However, there are still some promising signs, and the ecosystem is well-positioned to recover in the coming quarters. Investors and startup founders should be aware of the challenges facing the region, but they should also be encouraged by the progress that has been made in recent years.

Here are some of the key takeaways from the funding plunge in MENA startup ventures in Q2:

  • The global economic slowdown, the war in Ukraine, and rising inflation have all contributed to the funding plunge.
  • The decline in funding was particularly pronounced in the early-stage segment.
  • There were some bright spots in the MENA startup ecosystem in Q2, such as the $200 million funding round for Fawry.
  • The funding plunge is a setback for the MENA startup ecosystem, but it is still well-positioned to recover in the coming quarters.