The Middle Eastern startup ecosystem has faced a challenging landscape in the first half of 2024, reflecting broader economic and geopolitical pressures in the region. This overview delves into the current state of startup funding, highlighting key trends, dominant players, and notable investments in the face of ongoing obstacles. Despite a significant decline in overall funding, the resilience of the startup scene in countries like the UAE and Saudi Arabia demonstrates the region's potential for innovation and growth, even in turbulent times.

Decline in Funding

Middle Eastern startups secured $753 million across 162 deals in the first half of 2024, marking a 35% decrease in funding compared to the same period in 2023. This decline is largely attributed to ongoing regional conflicts. The continued downward trend in startup funding comes as no surprise, given these persistent challenges in the Middle Eastern business landscape.

Dominant Players: UAE and Saudi Arabia

During this period, the UAE and Saudi Arabia (KSA) have firmly established themselves as the leading hubs for startups in the Middle East. The UAE spearheaded the region with 82 deals, securing an impressive $438 million in funding. Right on its heels, KSA closed 57 deals, raising a substantial $297 million. Other nations also made their mark: Bahrain, Iraq, and Oman achieved 6, 4, and 4 deals respectively, while the remaining countries collectively contributed 9 deals. Funding-wise, Jordanian startups raised $7 million, Bahrain garnered $3 million, and other countries collectively secured $5 million.

Highlighted Investments and Acquisitions

The first half of 2024 witnessed several high-profile funding rounds. The most significant was Salla’s $130 million raise. This was followed by Property Finder with a $90 million round, Tumodo with $35 million, Keyper with $34 million, and Tendred securing $30 million. On the exit front, notable transactions included Maqta Gateway’s acquisition of a 60% stake in Dubai Technologies for $7.6 million and Phoenix Group’s acquisition of a 12.5% stake in Rekt Studios.

Despite the challenges faced in early 2024, including a significant funding decrease, the Middle Eastern startup ecosystem shows resilience. The UAE and Saudi Arabia's dominance as startup hubs, coupled with notable investments and acquisitions, indicates ongoing potential in the region. While economic and geopolitical pressures persist, the diversity of deals across countries suggests a dynamic landscape. As the ecosystem evolves, startups' ability to adapt and innovate will be crucial in navigating these turbulent times and securing future growth.