Technology opportunities have breathed new life into the Middle East and North Africa (MENA) private capital industry, according to the 2022 MENA Data Insight report from the Global Private Capital Association (GPCA).
GPCA, a member organisation of private capital investors managing $2trillion of assets in Asia, LatAm, Africa, C&E Europe and Middle East, says venture capital is thriving in the MENA region. Investments totalled $4.3billion between the first half of 2021 through to the first half of 2022.
The latest trends show that MENA countries represented five of the 13 ‘biggest movers’, markets with at least 200 per cent year-over-year growth in capital invested in 2021: Jordan, UAE, Saudi Arabia, Pakistan and Egypt.
Its report reveals that deal flow has been driven by technology companies applying global business models to a regional context. Tech startups from the region’s top innovation hubs together represent 89 per cent of capital invested in MENA VC since the beginning of 2020.
Fintech has accounted for 23 per cent of VC investment since 2020, reflecting rising demand for crypto investment services, digital payments and buy now, pay later (BNPL) options – led by Bahrain-based crypto platform Rain’s $110million Series B in January 2022.
In the first half of 2022, Global Ventures reached a $85million first close for fintech fund Nclude with commitments from several large Egyptian national banks.
E-commerce marketplaces have also drawn 20 per cent of VC dollars, such as UAE-based beauty and wellness e-commerce marketplace Fresha and Pakistani B2B digital retailer Bazaar Technologies.
The report also reveals that MENA-based institutional investors have doubled down on private infrastructure and tech investments in global private capital markets. Middle East sovereign wealth funds (SWFs) have emerged as among the world’s most consequential investors, with trillions of dollars under management combined.
Since the onset of the pandemic, SWFs have reportedly poured into tech companies that are contributing to the global digital revolution.