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Egypt leads North Africa and is the third-largest recipient of venture capital in the MENA region in H1 2023.

According to a Wamda research, in June 2023, startups in the MENA area secured a total of $35.6 million through 45 transactions, which added up to $1.6 billion in total funding for the first half of 2023.

Saudi Arabia took the top spot in terms of investment value, securing $25 million over the course of 12 funding rounds. Following far behind were the United Arab Emirates (UAE), whose entrepreneurs raised $6 million over the course of 20 rounds.

Due in large part to the $3.5 million fundraising round for Egypt’s trucking marketplace, Trella, Egyptian entrepreneurs reached third position in terms of capital received.

Twenty firms in the UAE raised money in June 2023, as opposed to 12 in Saudi Arabia, 5 in Egypt, 4 in Tunisia, and 2 in Morocco.

Similar to the rest of Africa, the fintech industry won out, collecting the most deals, with seven firms raising $3 million in total. However, the foodtech sector received more money than any other, exceeding $20 million across four businesses. This was about 56% of the entire sum raised.

Other industries that attracted a lot of investor interest were logistics, e-sports, and mobility:

With debt included, investment in the first half of 2023 has decreased by more than 21%, from $2 billion in 2022 to just under $1.6 billion in 2023. The decline in investment increases to 46% when debt is excluded. This fall shows that equities investing in the MENA region has significantly slowed down.

According to Wamda’s research, the impact of investor caution, affected by several reasons including the Ukrainian crisis, rising interest rates, and a drop in global economic development, became more noticeable in the second quarter. The amount of investment activity dropped significantly during this time.
Investments declined by 56% from one quarter to the next, while agreements likewise fell by 30%. Investments fell dramatically by 83% as compared to the same quarter in 2022 in the second quarter of 2023.
The number of agreements decreased significantly by over 50% during the first half of 2023, with Egypt seeing the highest decline of 70%. Despite this fall, the value of assets in Egypt decreased by 9% but remained largely steady.

However, it is important to note that MNT-Halan, a single company that generated an additional $400 million through securitization bonds and equity in 2023, was significantly responsible for supporting Egypt’s investment landscape. MNT-Halan raised $150 million in debt in 2022.

Without counting MNT-Halan’s funding rounds, funding for Egypt fell by a significant 90%. The investment amount substantially decreased to just $31.8 million between the first half of 2022, when Egypt raised $324 million, and the same time in 2023.

The research claims that Egypt has been adversely damaged by the global economic downturn, which has caused a significant increase in its debt, which currently represents 92% of its GDP.

The nation is also struggling with a high inflation rate of 30.7%. Additionally, the value of the Egyptian pound has fallen by 40% when compared to the US dollar. As a result, an increasing number of Egyptian entrepreneurs are actively looking for greater prospects abroad, including in Saudi Arabia and other nations.

Recently, a five-year tax exemption plan was unveiled by the government in an effort to help the environment for entrepreneurs.

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