UAE startups raise $371 million in 9 months

Start-ups in the UAE raised $371 million in the first nine months of 2023, according to Magnitt’s Q3 UAE Venture Investment report.

“109 investors invested in UAE-based start-ups in the first nine months, a 41% decrease from the previous year,” according to the report.

According to the report, more than 82% of round sizes in the UAE were less than $5 million, and the average valuation of UAE start-ups in seed investment rounds increased by 25% from the previous year.

Series A values, on the other hand, are falling; the average difference in Series A values for UAE start-ups this year is roughly $13 million, compared to $40 million in 2022, according to the report.

“It’s an exciting moment to be watching what’s going on in the UAE’s ecosystem, especially since Gitex has just concluded and the conference season is still in full swing. We’re hoping to see some additional investment come up in the coming weeks before the holiday season,” said Philip Bahoshy, Magnitt’s founder and CEO.

“Another intriguing event taking place in the UAE is Cop28, which is scheduled for the end of November,” he added.

“When it comes to valuation trends in UAE-based start-ups, 2023 proved to be an intriguing year, as the average and median valuation corridor for Series A start-ups shrank to levels not seen since 2018,” he said.

Startups’ importance has expanded steadily in recent years. Governments have lauded them as a major economic engine, particularly in preparing for the future of an increasingly digital-focused society.

According to Magnitt, start-ups in the Middle East and North Africa raised $643 million in late-stage fundraising during the first half of 2023, helping the area dramatically surpass worldwide estimates.

“This has resulted in a 20% annualized rise in the region’s late-stage fundraising environment since 2018, compared to a 49% drop internationally during the same period,” according to the report.

The contribution of start-ups to the economy would also help accomplish the goal of doubling the UAE’s GDP by 2031, said Abdulla bin Touq, Minister of Economy, last month.

According to the Magnitt report, the UAE registered 12 financing rounds in the last week, and more than $105 million was invested in the nation in October, a 194% increase from September.

The UAE led the way in terms of departures in the Middle East, Africa, Pakistan, and Turkey, accounting for 30% of all exits in this area, according to the statistics.