Start-ups in the Middle East and North Africa (MENA) region raised $277 million in the first three months of 2020, a 2 percent increase on last year, according to Magnitt’s Q1 2020 MENA Venture Investment report.
The start-up data platform revealed this was down to a strong start to the year – pre-coronavirus – with several start-ups raising large funding rounds in January and February, including Kitopi ($60m), Vezeeta ($40m), and SellAnyCar ($35m).
However, the data platform added that investment deals for the first quarter were down 22 percent compared to the same period last year and, with the onset of the COVID-19 pandemic, that figure dropped further in March, with a recorded drop of 67 percent.
“Historical data highlights that investment rounds across MENA tend to take, on average, six months to come to fruition,” said Philip Bahoshy, Magnitt’s founder & CEO.
“We will most likely not see the full impact of Covid-19 on the venture funding space yet for a few months. However, early indications have already shown a slowdown in funding announcements, as start-ups and investors re-evaluate their positions in this new environment.”
A survey of over 100 start-up founders participating in Magnitt’s weekly webinar series saw 59 percent say their business had already been impacted by the crisis.
Some 48 percent said revenue generation was their major concern and 25 percent pointing to fundraising as the issue that keeps them up at night; while 41 percent anticipate lower-than-expected revenue growth rates in 2020, with 29 percent anticipating revenue below 2019 figures.
Content courtesy: Magnitt’s Q1 2020 MENA Venture Investment report.