UAE Startups Raised $353 Million via Debt Funding in 2023
Magnitt’s 2023 MENA Venture Debt Investment Report: the figure represents a leap of 222% year on year (YoY).
The UAE has witnessed an increase in the number of startups seeking venture debt financing for their operations, reaching $353 million in 2023. This figure represents a leap of 222% year on year (YoY), according to Magnitt’s 2023 MENA Venture Debt Investment report.[1]
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The UAE remained the most active country for transactions among all the countries, which played a major role in becoming a hub for startups.
The report also highlights that Middle Eastern startups collectively brought in a record $756.6 million of venture debt funding; Saudi startups dominated this by securing 53% of the amount worth $400 million, with a 602% YoY growth.
Egypt underwent a notable decrease in venture debt funding by 86% YoY, as only $4 million was invested in Egyptian startups. There has been quite a drastic decline in the number of transactions in Egypt, which dropped by 75% YoY.
Fintech startups absorbed 79% of the total venture debt lending in the MENA region in 2023. Notably, UAE-based Tabby and Saudi Arabia-based Tamara contributed more, as these two obtained $600 million of the $601 million in funding for participating fintech players. Coming next were transport, logistics, and supply chain startups with $150 million.
Once known for its vast oil reserves, Saudi Arabia is quickly becoming a hub for innovation and entrepreneurship. The ambitious Vision 2030 plan, which aims to diversify the economy and advance technological progress, is driving this transformation.
Last year, Tabby, the UAE unicorn fintech previously headquartered in Dubai and now based in Riyadh, raised $200 million in its Series D funding round, achieving a valuation of $1.5 billion, while Tamara raised $340 million in a financing round that valued the fintech at $1 billion, making it the first Saudi fintech unicorn startup.