Venture debt funding in MENA surpasses $260mln in 2022 – report

Venture debt funding in MENA surpasses $260mln in 2022 – report

Venture debt investments in the MENA region have exceeded $260 million through 18 financing deals during 2022, according to a report by Shuaa Capital and MAGNiTT.

The report indicated that the high value came despite a backdrop of growing global macroeconomic headwinds and caution by venture capital firms (VCs) amid a sense of general uncertainty.

Topline data showed that venture debt funding surged 18x between 2020 and 2021, underlining an increasing demand for the funding mechanism to back startup growth.

Moreover, the number of venture debt agreements almost doubled during the same period, as the ecosystem began recouping momentum following the COVID-19 pandemic.

Nonetheless, further analysis highlighted a minor decline in funding last year in line with a global contraction in venture investing, as it dropped by $6 million from $266 million in 2021.

The VC market deployed $3.10 billion in funding across 575 contracts from 2022 until the present time, compared to $2.90 billion and 675 deals in 2021.

The average deal size in 2022 plunged to $14.40 million from $26.60 million in 2021. However, last year witnessed the first mega-deal for venture debt in the MENA region closed by UAE-based fintech startup Tabby, contributing 39% to the total venture debt funding registered in 2022.

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