(Bloomberg) — Investments in Middle East and North African startups jumped 35% during the first half of the year with companies in the United Arab Emirates raising the bulk of the funding, according to a report by online technology platform Magnitt.
Companies including cloud kitchen platform Kitopi raised a total of $659 million, with several funding rounds taking place during the coronavirus pandemic. Still, March and April saw the biggest drops in funding as governments imposed strict lockdowns to curb the spread of the virus.
“The full impact of Covid-19 is likely to hit later in the year,” as it takes an average of six months to raise funds, Magnitt Chief Executive Officer Philip Bahoshy said in a statement. Many deals that were completed in the first quarter had been in the works for a while, he said.
MENA countries, seeking to diversify their economies, are investing more in technology. Dubai International Financial Centre invested in four financial technology startups to help companies seeking access to the Middle East, Africa and South Asia. Beirut-based music streaming service Anghami is said to be assessing options for the business.
- Egypt had the highest number of deals.
- Lebanon dropped out of the top 5 for the first time, with a 78% decrease in deals.
- The financial technology sector had the highest number of deals, with 16% of all deals, followed by e-commerce and delivery and transport.