VC investments in emerging markets such as the Middle East and North Africa (MENA) plummeted by over 40% compared to 2023, according to a new report. The data mirrors the wider global trend of reduced VC funding in the last two years, especially for non-AI companies.
The total raised across the markets surveyed was $9.1 billion in 2024, a 41% decline year-on-year (YoY). Furthermore, there was a 20% drop in deal activity, with the number of deals falling to 1,527.
However, there may soon be signs of recovery as interest rates decline globally, resulting in lower inflation.
The trends are outlined in the 2024 Venture Investment Report from MENA-based research group MAGNiTT. The report looked at VC investments in the Middle East, Africa, Southeast Asia, Türkiye, and Pakistan.
In the MENA region, startups raised $1.9 billion in 2024, a 29% decline annually. Still, this was a small decline when set against that seen in Southeast Asia (45%) and Africa (44%).
Plus, funding levels in 2024 were still higher than they were in 2020, meaning venture interest in the region continues to grow — provided you account for the surge in the boom years of 2021 and 2022.
There was a 7% increase in deal count (571) and the number of investors increased by 18% (to 475) compared to a year earlier.
And 47% of all investments were in the $1 million to $5 million range, signaling a shift to early-stage investments. However, MENA experienced a significant decline in late-stage deals.
Across MENA, Africa, Southeast Asia, Türkiye, and Pakistan, fintech continues to put in a strong showing, raking in $3.9 billion in funding in 2024, reflecting that the sector is doing well in emerging markets, where more developed financial services are thin on the ground.
The report noted that this presents an opportunity for M&A activity across geographies within the region.
There was a predictable split, where international investors focused mo …