UAE Start-ups Raise $371 Million in First Nine Months of 2023

Start-ups in the UAE have raised $371 million in the first nine months of 2023, with 109 investors contributing to this investment, though this represents a 41% decline from the previous year. Most UAE start-ups received funding below $5 million, and seed funding rounds saw a 25% increase in mean valuation. However, Series A valuations decreased significantly, with an average gap of $13 million compared to $40 million in 2022.

Furthermore, the role of start-ups in the Middle East and North Africa has grown substantially, with $643 million raised in late-stage funding during the first half of 2023, outpacing global figures. This region has shown a 20% annualized growth in late-stage funding since 2018, compared to a 49% global decline during the same period. The development of start-ups is seen as a key driver of economic growth and a means to double the UAE's GDP by 2031, as stated by the Minister of Economy.

The UAE experienced a significant increase in funding activity in October, leading the way in terms of exits in the Middle East, Africa, Pakistan, and Turkey, contributing to 30% of all exits in the region. On the other hand, Saudi Arabia's exit activity remained relatively low compared to its peers, with Delivery Hero's acquisition of HungerStation being one of the notable exits in the third quarter.

Regional investors dominated the venture landscape, with only a few international investors in the top 10, such as US VC firm 500 Global and start-up accelerator Y Combinator. These investors had their investments distributed across the MEAPT region, and China's Tencent Holdings, Switzerland's Blue Earth Capital, Japan's Sumitomo, and the UK's Apis Partners were the other global players in the region, according to the report.