MEAPT region startup financing drops by 64% in H1 2023

The regional startup landscape continues to be affected by the global business landscape, with the MEAPT region witnessing a significant contraction in the first half of 2023, with startup financing falling 64 percent compared to H1 2022 to hit $1.879 billion through 530 deals, according to the latest report by MAGNiTT.

Within the Middle East, Africa, Pakistan, and Turkey (MEAPT) region, Africa accounted for 51 percent of total funding and 26 percent of the region’s deals, however, funding and deals fell by 54 percent and 50 percent year-on-year respectively, the report wrote.

Regional funding reached its lowest recording during Q2 2023, contracting to $619 million compared to $1.26 million in Q1 2023 and Q1 2022’s record $3.54 million. Funding in Africa fell by 54 percent compared to H1 2022 to hit $951 million so far this year.

FinTech was recorded as the top industry in terms of total deal share in Africa with 29 percent, ecommerce/retail saw 12 percent, and logistics and transportation received 11 percent.

Egypt’s venture capital firm Flat6Labs was the MEAPT region’s top ten investors with 26 investments, with 19 percent of investments directed towards North Africa. USA’s 500 Global was second with 21 investments, followed by Nigeria’s ARM Labs Lagos Techstars Accelerator with 13 investments.

In terms of deals, Egyptian deals fell by 75 percent in H1 2023, recording 23 deals. Nigeria fell by 54 percent but retained its position as the top country in Africa in terms of deals, followed by Kenya with a contraction of 18 percent.

Regarding the amount of funding, Egypt topped the report’s list for African countries, receiving a total of $305 million driven by a $260 million deal by FinTech company Halan which accounted for 14 percent of the region's total funding. MEGA deals still contributed to 29 percent of MEAPT's funding.

Halan topped the list of startups with the most significant funding deal, followed by South Africa’s Tymebank which received $78 million, and Kenya’s M-Kopa’s $55 million deal.

The first half of the year saw MEAPT startup exits were down by 16 percent annually, with Africa headquartered startups capturing 27 percent of total regional exits. The region saw 3 mega deals in the first 6 months of the year.