This year is a promising one for startups across the Middle East and North Africa (MENA) region. From venture capital (VC) funding rounds to mergers and acquisitions, 2021 is proving to be a continuation of the positive startup scene witnessed in the second half of 2020.
The first six months of 2021 marked a rise in startup funding from 2020.
Following the emergence and widespread coronavirus pandemic, businesses far and wide realized that customer habits were changing and they needed to accommodate them – in every sector.
This is clearly seen in the funding rounds made in the first half of the year and which continued well into the third quarter.
In this article, we’re sharing an overview of the top-funded startups in the Middle East and North Africa and the Gulf Cooperation Council (GCC) in the first half of 2021 and the third and fourth quarters of 2021.
Want to learn more about African startup funding rounds in 2021?Read: African Startup Highlights for Q3 & Q4 2021.
What happened in H1 2021?
Since January and till the end of June 2021, startups across the Middle East and North Africa (MENA) region witnessed growth, innovation, and above all a large number of investments.
In fact, the majority of investment rounds went to Egypt in H1 2021 and similarly in the third quarter of the year. It’s not surprising considering that Egypt is the most populous Arab nation with over 100 million people.
Moreover, data compiled by Disrupt Africa indicated that over 300 African tech startups raised a combined $1.1+ billion in the first 8 months of 2021.
Nigerian, Egyptian, and South African startups were the top 3 in terms of highest funding rounds.
Overview: Egypt H1 2021
VC funding in Egypt amounted to $190 million in 2020, marking an all-time high and 30% year-on-year increase, according to a report by MAGNiTT and the IT Industry Development Agency (ITIDA).
Egypt came in second in terms of funding in the MENA region, with an 18% share, backed by Vezeeta’s $40 million funding round.
The compound annual growth rate (CAGR) for Egypt between 2015 and 2020 stood at 100%, according to the report.
Egyptian startups swept into 2021 with the same remarkable pace and exceeding 2020’s total VC funding within the first six months of the year with $194 million.
This figure makes up nearly 26% of all VC funding for the greater MENA region during the same period, according to ITIDA CEO Amr Mahfouz.
The top-funded Egyptian startups in H1 2021 are:
- Trella with a $42 million funding round co-led by Maersk Growth in June
- Paymob with $18.5 million series A round
- Telda, a digital banking app raised $5 million in a pre-seed round
Ride-hailer Swvl wasn’t entirely out of the picture after its $1.5 billion valuation and SPAC merger. But more on that in our acquisitions section at the end of this article.
The UAE: Overview H1 2021
Meanwhile in the UAE, data compiled by MAGNiTT showed that the country’s transportation and logistics sector witnessed a year-on-year growth of over 170% in H1 2021, making it the “sixth most-funded industry” in the country during that period.
From January till the end of August, the food and beverage segment recorded the highest funding in the MENA region, registering a 300% year-on-year growth, according to MAGNiTT.
Now let’s dive into Q3 and then Q4 of 2021.
Part 1: VC funding in Egypt in Q3 2021
But if you’re thinking the first six months of 2021 were great, wait till you see how Egyptian startups performed in Q3. It’s safe to say that Q3 2021 alone has exceeded all that was raised in the full year 2020 – and then some!
MNT-Halan, which started out as a ride-hailing startup, has expanded into fintech and raised the quarter’s largest funding round in Egypt and Africa.
Moreover, MaxAB continued to make headlines for two months in a row with funding rounds and an acquisition.
Here are the top-funded Egyptian startups in Q3
MNT-Halan
The once-upon-a-time ride-hailing app for two- and three-wheeler vehicles marked a transformation in 2021, becoming a fintech and super app. MNT-Halan raised $120 million with the purpose of becoming Egypt’s largest and fastest-growing non-bank lender to the unbanked,” it said.
Launched in 2018, MNT-Halan offers digital payment solutions, mobile wallets, as well as a buy-now-pay-later e-commerce platform with last mile courier delivery.
The company, which serves over 4 million customers in Egypt, has disbursed over $1.7 billion in loans, according to its website.
MNT-Halan’s $120 million funding marks the largest funding round ever raised by an Egyptian tech startup.
MaxAB
MaxAB, Egypt’s fast-growing B2B e-commerce platform, marked not one but two investment rounds in 2021.
In July, MaxAB raised $40 million in a Series A round to bolster its expansion across its home country Egypt and the broader MENA region. A month later, MaxAB raised a further $15 million – also part of its Series A round – bringing the total to $55 million.
The company connects food and grocery retailers with suppliers in the country’s most under-served locations and geographies.
Since its launch in 2018, MaxAB has supplied over 55,000 retailers and fulfilled over 1 million orders. The fast-growing Egyptian startup has marked a year-on-year growth of over 5x.
This funding round is the second for MaxAB, which previously raised $6.2 million in a seed round in 2019.
Following the $15 million round, MaxAB acquired WaystoCap, its Moroccan counterpart, as part of its expansion in the MENA region.
Capiter
Capiter, a B2B e-commerce platform for manufacturers, brands, wholesalers, and retailers, raised $33 million in a Series A round in Q3 2021.
The startup, which was launched in 2020, said it was going to use the funds to expand both its offerings to include digital financial services and its footprint.
Capiter currently boasts more than 50,000 merchants and over 200 sellers on its platform.
Dopay
London-based but Egypt-focused Dopay, a B2B2C payment platform, raised $18 million in a series A round in September.
With its virtual banking platform, Dopay aims to digitize the cash payments between companies and their employees. Its clients currently include Swvl, Landbank, and McDonald’s. (Fintech News)
Elmenus
Elmenus succeeded in raising $10 million in a pre-Series C funding round.
Launched in 2018, Elmenus, which offers a comprehensive platform for online food-ordering, said it would use the investment to bolster operations and its several-million-user database.
Elmenus had previously raised $8 million in Series B funding in 2020 along with an investment from earlier this year.
Yodawy
Yodawy successfully raised $7.5 million in Series B funding. The startup “introduced a benefits management platform for pharmacies that enables the entire healthcare ecosystem – insurance companies, pharmacies, and pharmaceuticals – to serve a wider customer base, faster.” (Disrupt Africa)
The 2018-founded Yodawy boasts over 2 million users, helps patients get their medicine and products delivered, supports insurance firms in automating approvals, and pharmacies in growing their sales via an e-commerce platform. Yodawy previously raised $1 million in 2019.
Other notable funding rounds in the Egyptian market
| Startup Name | Funding round and type | Industry |
| Taager | $6.4 million seed round | E-commerce marketplace |
| Cartona | $4.5 million Series A round | B2B e-commerce platform |
| GoodsMart | $3.6 million | B2C e-commerce platform |
| Odiggo | $2.2 million | Automotive marketplace |
| Kashat | $1.75 million bridge funding | Fintech and micro-lending |
| Jeel | $1.2 million seed round | Edutainment |
| Sotech | $1 million pre-seed round | Healthcare technology |
| Nawy | Seven-figure seed round | Property technology (Prop-tech) |
In Q3 2021, Egyptian startups raised over $260 million.
By the end of the first nine months of 2021, total VC funding in Egypt exceeded $460 million, more than double the funding raised in all of 2020.
Part 2: VC funding in the GCC in Q3 2021
Saudi Arabia
- Unifonic
Saudi-based Unifonic marked one of the largest investment rounds in Q3 2021 with $125 million.
Founded in 2006, Unifonic offers cloud-based communications services and tools to business customers as well as an API platform for text-and-voice-based integrations and solutions.
- Syarah
Syarah, an on-demand automotive marketplace, has raised $20 million in a series B investment round. The funding will be used to bolster the startup’s hassle-free platform for people who want to buy cars online.
Syarah also provides car support and quality assurance checks and operations.
“Through their online platform, users can choose from a wide selection of cars, book on-demand, and have them delivered straight to their homes. With the high demand for online car buying, Syarah has expanded its offering by selling used cars as well in 2019, along with complimentary inspection and guarantee servicing.” (MAGNiTT)
Other notable mentions in Saudi Arabia
- Founded in 2021, CashIn, a digital payment and point-of-sale (POS) solution, raised $1.6 million, from Investor Mine, BIM Ventures, and angel investors.
- Accommodation platform Mabaat raised $2.4 million in funding to support its contribution to the kingdom’s tourism goals. A little like AirBnB, the Saudi firm manages the entire rental process from marketing to booking to payments to maintaining the properties in its portfolio.
The UAE
- Kitopi
Starting of the new quarter strong was UAE-based cloud kitchen platform Kitopi with a $415 million Series C funding round led by Softbank Vision Fund 2.
The cloud kitchen platform will use the funding to grow its presence in the Middle East and expand into Southeast Asia, which has a “highly attractive and fast-growing online food delivery market,” Kitopi said in a statement.
Kitopi currently has over 60 cloud kitchens across the UAE, KSA, Kuwait, and Bahrain. “It partners with restaurants and F&B brands, enabling them to expand their reach through its kitchens, in as little as 14 days,” it said.
This recent funding round brings Kitopi’s total funding to $504 million, according to CrunchBase data.
- Leena
Closing Q3 2021 was the UAE’s Leena AI with its $30 million Series B funding round. This announcement follows a $10 million Series A round earlier this year.
A conversational AI platform, Leena AI helps companies offer a better employee experience by saving time for HR personnel.
The startup automates various processes, such as “answering policy-related questions, knowledge management, generating employee documents on demand, and managing employee tickets,” so HR can focus on more important and high-value activities. (MAGNiTT)
- Sarwa
Fintech startup Sarwa raised $15 million in its Series B round in August. The round was led by the emirate of Abu Dhabi’s investment arm Mubadala, 500 Startups, Shorooq Partners, DIFC, among other investors.
Sarwa, which was launched in 2018, offers an investment management and personal finance platform.
“Sarwa is set to revolutionize how young professionals grow their wealth by introducing smart, simple, and affordable digital investing to the region,” according to Magnitt.
Other notable funding rounds in the UAE include:
- B2B marketplace Elkaso raised $2.1 million in a pre-seed round. Launched earlier in 2021, Elkaso is tech platform that connects restaurants with suppliers to help the former fill their inventory needs or make last-minute orders on-demand.
- Dubai-based Invygo raised $1.9 million in a Series A round. Founded in 2018, the ride-booking platform raised $1 million in 2020. Invygo is changing the automotive experience by revolutionizing the Middle East’s car subscription ecosystem.
- Healthcare financing platform Klaim raised $1.6 million in a pre-Series A round, its second funding round this year after it raised $1 million in March. Klaim helps healthcare providers manage cash flow problems resulting from insurance claims. It will use the funds to cement its presence in Saudi Arabia.
Acquisitions in Q3 2021
The third quarter has been a busy one in the MEA region. But it hasn’t all been fund raising.
There have been a few notable acquisitions as well.
Here are our top 3 picks for acquisition and non-funding deals:
Swvl’s SPAC merger and subsequent acquisition
Earlier this year, Dubai-based Egypt-born Swvl announced entering into a SPAC merger with blank check company Queen’s Gambit Growth Capital. The deal valued Swvl at $1.5 billion and will see the bus-hailing company listed on US NASDAQ in Q4 2021.
“As part of the deal, Swvl will receive $405 million in fresh capital to fund its expansion and $40 million will be used to cover the expenses and fee to close the transaction and list on NASDAQ,” MENAbytes reported in late July.
Following the merger agreement, Swvl announced breaking into the European market through the acquisition of Spanish shuttle bus firm Shotl.
“The deal not only leverages Shotl’s extensive business to government (B2G) and original equipment manufacturing (OEM) connections, but also accelerates Swvl’s entry into the European market a year ahead of schedule. It also extends Swvl’s geographic footprint impressively, given that Shotl operates across 10 countries,” MENAbytes reported.
Jordan’s Jawaker
Jordan-based online card game studio Jawaker was acquired by global gaming studio Stillfront Group for $205 million.
The acquisition will help Stillfront Group boost its presence and gaming portfolio in the MENA region.
MaxAB’s acquisition of Moroccan counterpart
Egypt-based MaxAB announced its acquisition of Moroccan B2B e-commerce platform WaystoCap as part of its MENA expansion plans.
WaystoCap is one of the largest B2B e-commerce platforms in Morocco. It boasts a network of 8,000 retailers and a presence in West African countries.
“While the acquisition signals MaxAB’s move into Morocco, it also shows the company’s entry into the Maghreb markets — Algeria, Libya, Mauritania, Morocco and Tunisia, where there’s little or no contest,” notes TechCrunch.
Nigeria’s Helium Health acquires UAE’s Meddy
One of the notable acquisitions of Q4 2021 was Nigeria-based e-health startup Helium Health’s acquisition of UAE-based Meddy.
Although it did not disclose the value of the deal, the Nigerian startup said the acquisition would support its expansion outside the African continent, particularly in the UAE, Qatar, and Saudi Arabia.
Further reading: The 9 Most Commonly-Used Startup Valuation Methods You Need to Know
Mega MENA funding rounds continue in Q4
New funding rounds are announced every day in the MENA region in 2021 with several million-dollar announcements made in October and November.
Here are some of the highlights from Q4:
Part 1: North Africa funding rounds
- Egypt’s 6-month-old logistics app Rabbit raised the largest seed round in Africa at $11 million.
- Egypt-based Breadfast raised $26 million in a Series A round to bolster is expansion across Egypt and to Sub-Saharan Africa.
- Morocco’s fintech and B2B e-commerce startup Chari raised $5 million in a seed round, bringing the company’s valuation to $70 million.
- Cairo-based B2B e-commerce and distribution platform Talabeyah raised $1.1 million from angel investors in October.
- Last-mile Egyptian delivery startup ShipBlu, which was launched in 2020, raised $2.4 million in a seed round.
- Sudanese marketplace and classifieds startup Alsoug raised $5 million in a Series A round. Investors included Egypt’s fintech unicorn Fawry.
Part 2: GCC funding rounds in Q4
- UAE-based agritech startup Pure Harvest Smart Farms raised $64.5 million in growth capital in October. This round brings Pure Harvest’s total funding to-date to $271.6 million, making it the highest-funded agritech startup in the MENA region.
- Saudi-based insurance technology (insurtech) startup Rasan announced raising $24 million for its Tameeni platform. This is the “first growth stage insurtech deal in the kingdom,” Rasan said in a press release.
- UAE fintech startup Nomod, which helps merchants worldwide accept cart payments via mobile phones, raised $3.4 million in a seed round. Nomod currently has operations in the UAE as well as the US and the UK.
- Open banking startup Tarabut Gateway raised $12 million in a pre-Series A funding round. This is the second round Tarabut Gateway has raised in 2021 after its $13-million seed round in February. The company was founded in Bahrain but is currently based in the UAE.
- Customer and employee engagement platform Merit Incentives raised $5 million in a Series A funding round. The UAE-based startup, which was founded in 2016 and began as a B2C gifting solution, now offers B2B engagement tools.
- B2B software startup Getbee raised $1.8 million in a pre-Series A funding round. The UAE-based startup was launched in 2018 to connect brands with customers using live video consultations.
Final thoughts
The MENA region is proving to be the birthplace of significant success in 2021.
This is particularly clear with many more multi-million-dollar funding rounds announced in October and November.
It appears that 2021 is going to be a record year for Arab startups.
It’s been common to see startups in the UAE and Saudi Arabia get higher funding than Egyptian startups. But 2021 is appears to be the year of mega funding rounds in the Egyptian startup market.
So far we’re seeing a lot of funding going into healthcare, an obvious choice following the pandemic. That’s in addition to fintech, another obvious choice as more people and businesses shift their payments online.
B2B marketplaces also seem to be increasing in number and building bridges among companies and industries in various parts of the MENA region.
But for startups to raise funding rounds, they would need to a have a few things ready to present to investors.
Startups need to present their financial and business plans to showcase their current progress and future plans. And of course, how much they’d like to raise and how they will use that funding to expand and grow.
If you’re a startup that needs help creating a financial plan and model, a business plan, or an investor pitch deck, get in touch with the Stride team and we’ll help you get everything ready for your funding round.
