RIYADH: Startups in the Middle East and North Africa region witnessed a notable contraction in investment funding and deals during the month of September.
According to Wamda’s monthly investment report, a total of $36 million was raised across 36 deals, signifying a 64 percent month-on-month drop and an 82 percent decline from the previous year.
When looking at the year-to-date figures, the total investment comes in at $1.8 billion, inclusive of $687 million sourced from debt financing.
For comparison, the first three quarters of 2022 saw startups in MENA amassing $2.7 billion, with debt financing constituting $455.7 million of that figure.
The dwindling funding landscape affects the entire region, evident from the decreasing deal counts and shrinking cheque sizes.
The UAE dominated September’s charts, mostly due to substantial investments in Fuze and Zero Carbon Ventures, raising $14 million and $5 million, respectively. These significant deals propelled the UAE to the forefront in the region, with its startups collecting $27 million over 14 deals.
Saudi Arabia followed in the list, securing $2.7 million across seven transactions. Meanwhile, Egypt was a close third, with six of its startups accumulating $2.6 million.
Additionally, Saudi Arabia observed a staggering 95 percent month-on-month plunge in deal value, suggesting that the same investor cautiousness affecting the broader region is now palpable in the Kingdom, the report stated.
From a sectorial perspective, fintech retained its allure, registering six deals worth over $16 million. Clean technology and gaming trailed closely behind.
On business models, business-to-business startups reeled in over $25 million in investments, while their business-to-consumer counterparts secured slightly more than $10 million.
However, the number of deals was evenly distributed between the two models.
Furthermore, a gender-based analysis revealed that female-founded startups could only secure $320,000 during the month, primarily in grants.
In contrast, startups with mixed-gender founding teams managed $1.65 million over four deals, and those founded exclusively by men dominated with $34 million across 21 deals.
Egyptian deep tech firm Intella has successfully secured $3.4 million in a pre-series A funding round. (Supplied)
Egyptian AI startup Intella raises $3.4m from Saudi investors
In a significant development for Saudi Arabia’s technology sector, Egyptian deep tech firm Intella has successfully secured $3.4 million in a pre-series A funding round. This funding round was led by Saudi-based HALA Ventures and Wa’ed Ventures, the venture arm of Aramco.
The capital injection is set to accelerate Intella’s foray into the Saudi market and underpin the development of artificial intelligence models tailored for the Middle East and North Africa audience.
To demonstrate its commitment to the market, Intella is strategically relocating its headquarters to Saudi Arabia, positioning itself in the midst of the Kingdom’s growing tech and AI landscape.
“Saudi Arabia is quickly becoming a hub for technological advances. This move fits perfectly with our plans for expansion,” said Nour Taher, CEO and co-founder.
In its pursuit of technological excellence, Intella’s Voice system achieved a 95.73 percent accuracy rate after extensive testing involving 30,000 hours of Arabic audio. This accuracy rate surpasses industry giants like Google and IBM Watson.
Omar Mansour, Intella’s co-founder and chief technology officer, highlighted the Arabic-focused voice technology, emphasizing its move into advanced audio analytics.
Hailing Intella’s approach, Ali Abussaud of HALA Ventures noted: “We’re excited to back Intella’s vision. They’re making significant strides in connecting global AI progress with the needs of the Arab-speaking community, and it’s exactly the kind of initiative the region needs right now.”
As Intella aims to lead the way in Arabic voice technology, this funding brings it closer to its goal of aligning the MENA region with global tech advancements.
The funding round also received contributions from Sanabil500, INSEAD’s alumni angel network, and several other prominent investors.
"RedBox is leading the transformation in the Kingdom through smart locker devices that enable users to receive their shipments safely at the convenient time and place" — Abdulaziz Al-Houti, Chief investment officer at Jahez
Saudi-based RedBox secures $7m series A investment led by Jahez
In an endorsement of its innovative logistics model, Saudi shipping and logistics startup RedBox has successfully concluded a Series A funding round, amassing SR26.25 million ($7 million).
The funding round was spearheaded by Saudi-based food delivery company Jahez, according to venture platform Jawlah.
Launched in 2019 by Thamer Altuwaiyan and Zun Phan, RedBox has expanded its footprint across more than 50 Saudi cities.
The company operates a vast array of smart shipping lockers, which serve as strategic drop-off points for logistics firms, granting end-users the flexibility to retrieve packages at their convenience.
Commenting on the investment, Abdulaziz Al-Houti, chief investment officer at Jahez, said: “The last-mile service has developed in recent years more than ever before in the history of shipping and delivery, and RedBox is leading the transformation in the Kingdom through smart locker devices that enable users to receive their shipments safely at the convenient time and place.”
The investment is set to be used to finance the company’s strategic plans to enhance its infrastructure and expand its network of smart lockers in the aim of covering a larger number of regions across the Kingdom.
Capifly offers Shariah-compliant venture debt for burgeoning startups. (Supplied)
Jordan’s Capifly captures $1m pre-seed round, eyes expansion in Saudi Arabia
Jordanian fintech startup Capifly has successfully garnered $1 million in a pre-seed funding round, attracting investment attention from prominent players like Oasis500, BLDR Ventures, Joa Capital, and Ahli Fintech, supplemented by angel investors from Jordan and Saudi Arabia.
Incepted in 2022 by Dunya Bashiti, later joined by Ahmed Jaradat, Capifly offers non-dilutive, Shariah-compliant venture debt tailored for burgeoning startups.
This recent capital influx sets the stage for the firm’s plans, and it has earmarked a considerable $10 million non-dilutive capital facility, aiming to bolster the digital economy.
“Our vision positions Capifly at the forefront of the internet’s gross domestic product growth. Our unique technology isn’t just for our use; we’re gearing up to underwrite debt for other financial institutions, solidifying Capifly’s key role in the digital era,” Bashiti said.
In addition to these strategic moves, the startup has broadened its regional footprint by venturing into the Saudi market, underscoring its commitment to solidify its position and tap into the MENA region’s vast growth potential.
