The first quarter of 2024 proved challenging for startups in the Middle East, as funding fell short of the impressive performances seen in the corresponding quarters of the previous years. Despite uncertainties on both global and regional fronts, startups in the Middle East managed to secure funding, with Saudi Arabia and the UAE leading in the region.

Let's have a more thorough exploration of the most significant metrics that defined the landscape of startups in the Middle East for Q1 2024.

Delving into the Middle East Startup Funding Scene in Q1 2024

Despite recording 102 deals in Q1 2024, startup funding in the Middle East plummeted significantly to $387 million, marking a 43% decrease compared to Q1 2023. The average funding amount per deal also decreased to $3.8 million, down from $7.5 million in Q1 2023.

While peak funding levels were achieved in the first quarters of 2022 and 2023 (notably during February in both years), the same period in 2024 showcased the challenges prevailing in the VC market, regionally and globally.

Middle East Top Countries in Startup Funding in Q1 2024

In the initial quarter of 2024, both KSA and the UAE continued as dominant players in the region’s VC landscape, leading in both funding and deal numbers. Together, these two nations accounted for approximately 97% of the total funding in the Middle East during this period.

In particular, Saudi Arabia saw the highest funding secured in March 2024, amounting to $198 million, primarily driven by a significant pre-IPO funding round of $130 million for the Saudi Software as a Service (SaaS) provider, Salla. Additionally, 12 other transactions in the same month amassed $40 million, while e-commerce startups secured $18 million.

Standout Middle Eastern VC Deals in Q1 2024

In the first quarter of 2024, the Middle East witnessed notable deals, especially Salla's pre-IPO round raising $130 million. Other significant investments, ranging from $5 million to $35 million, occurred across various funding rounds, spanning from pre-seed to series A.

Notable Startup Exits In the Middle East in Q1 2024

In Q1 2024, the Middle East saw significant exits, including acquisitions like Mitgo Group's purchase of Embedded and Maqta Gateway acquiring 60% of Dubai Technologies. The merger of Basserah and Nybl demonstrates collaboration between Saudi Arabia and the UAE. These exits reflect the region's dynamic startup landscape and its appeal for investment and partnerships.

In the initial quarter of 2024, Middle Eastern startups faced challenges, reflected in decreased funding and deal numbers. However, standout deals like Salla's pre-IPO round demonstrate the region's resilience and potential. Despite the downturn, these significant investments signal continued investor confidence and affirm the Middle East's commitment to nurturing innovation and entrepreneurship.