The UAE continues to lead over its peers in Mena markets in terms of non-mega funding for start-ups, having secured more than $150 million across 30 deals in the first quarter of the year, a report has found.
Mega funding refers to big-ticket deals in excess of $100 million.
More than 60 per cent of the total funding in the UAE came from the top three rounds recorded by FinTech company Tabby, dine-in payment disrupter Qlub and online coffee marketplace Cofe.
The three business secured about $100 million collectively, according to start-up data platform Magnitt’s Q1 2023 UAE Venture Investment report.
Dubai-based buy now, pay later platform Tabby raised $58 million in a series C round in January while Cofe secured $15 million to expand its operations in new markets and Qlub raised $25 million to drive growth.
Metaverse start-up Numi raised $20 million from Venom Ventures Fund while education technology company almentor secured $10 million in a round led by e& capital, alongside existing investors Partech, Sawari Ventures, Egypt Ventures, Sango Capital and Endure Capital.
FinTech companies Alaan and Investsky also secured $10 million and $5 million, respectively, in the first quarter, Magnitt data shows.
“After a record year of exits in 2022, we predicted that given the challenges of raising funds in an environment of higher interest rates, start-ups will likely seek acquisitions or consolidations as an alternative to fund-raising,” the report said.
“This was reflected in the M&A activity in the UAE, as it recorded a 200 per cent increase compared to the quarter before and also reported more exits than in first quarter of last year.
“Cross-pollination remained a popular theme as several Turkey-based ventures acquired start-ups based in the UAE.”
The Arab world’s second largest economy accounted for 10 in 11 exits recorded in the Mena region in the first quarter of this year.
Some of these exits included EdTech platform Knowledge Planet UAE, Healthtech company Smileneo, home services company ServiceMarket, FinTech platform paymennt.com, e-commerce business Namshi and Botim, according to the report.