Egypt took the lead within the region’s startup ecosystem, as the country with the highest funds at $45.7 million in December 2022, according to a report released in January 2023 by MENA accelerator, Wamda.
Egypt’s startup scene has been growing consistently and steadily over the years, with e-commerce, logistics, and fintech being the most popular within the ecosystem. Earlier in 2022, investments that came up top were in one of those three sectors, according to Zawya. However, in Egypt, e-commerce reigns.
UAE followed Egypt in terms of investments secured in 2022 with $31.8 million and Saudi Arabia came third with $31.7 million. While funding has decreased by 40% from December 2021, startups in the pre-seed and seed stages have taken over the share of the pie in terms of deals in 2022.
MENA investments
Fintech is the leading industry within the region with $ 1.1 billion in investments, reeling in almost twice as much in 2022 compared to the previous year, according to Wamda’s 2022 yearly review of investments within MENA. Of the $ 3.94 billion secured in 2022, women-led startups only regained 1.3 %, with startups founded by both men and women pulling in $ 168 million worth in investment. The bulk of the investment raised for the women-led startups was in sectors of health tech, edtech, and e-commerce tech, and hailed mainly from in Egypt and the UAE.
Leading sectors
Africa has seen a flouring growth in the fintech sector over the past decade. According to a 2022 report by Mastercard, the continent is coming up strong bringing together new technologies in an effort to provide financial services to the unbanked.
In December 2022, agritech secured most of the investments at 31%. One of the most promising startups within the agritech field includes Nilebot, which monitors the water and provides data in real-time, to improve farming methods within the country, according to market data platform, Tracxn. Zr3i and Fresh Source are two other platforms working towards improving farming and agriculture through technology.
“The sheer size of the Egyptian economy, the presence of very large firms and not that many mid-sized firms, and the well-connected and educated population mean that there is room for disruption, process efficiencies and moving people up the financial, social, manufacturing and services value curve,” Advisory Board Member at Apex Group, Dr.Bhaskar Dasgupta told the Arabian Gulf Business Insight.
Outlook
While the startup ecosystem has been flourishing across the Middle East and North Africa (MENA) region despite hardships, the recovery from the pandemic, compounded with the recent global inflation, is set to bring with it a few setbacks. However, it’s not a dead-end for startups in Egypt, merely a roadblock. In 2022, the North-African country hit a 3% increase in funding compared to the previous year as per StartupScene. While the first quarter (Q1) of the year might prove difficult for fund-raising, expanding sources for revenue streams by breaking out into foreign markets, may be a solution for startups to counter the global situation.
