RIYADH: Investments in the Middle East and North Africa slowed in August, with total funding reaching $83 million in 30 rounds.
This reflects a 76 percent drop from July’s $355 million and a 24 percent year-over-year decline, according to the monthly report from Wamda and Digital Digest.
Unlike previous months, August saw no major deals, with the largest round being raised by UAE-based Yuze for $30 million. Debt financing played a minimal role, accounting for just 3 percent of the total capital raised.
The UAE once again led the region in startup investments, with 13 UAE-based startups raising $55.7 million.
Saudi Arabia followed with $16 million raised across nine deals. Egypt, which had been a standout performer in July, saw a marked drop, raising just $7.6 million across four deals, while Kuwait made it into the top four with just one deal – Kem’s $3 million haul.
Investor interest remained concentrated on the fintech sector, which remained the most funded for the third consecutive month, raising $54 million in eight deals. Web3 also regained momentum, raising $13.5 million in three rounds, while food technology made a comeback, raising $9 million in four deals.
The month was dominated by early-stage funding, with two startups raising a total of $19 million in Series A rounds and five startups raising $15.6 million in seed rounds. Seven startups did not disclose their funding stages, accounting for $35.4 million of the total investment.
Business-to-business models remained highly attractive to investors, with 13 startups raising $46 million. Business-to-consumer models attracted $15 million across five rounds, while the remaining funds went to startups operating in both sectors.
Female-led startups continued to face challenges in raising capital, securing just 0.3 percent of total investment in August. Only one female-founded startup, Powder Beauty, raised an undisclosed pre-Series A round, and another female-co-founded startup received a $150,000 acceleration grant.
The MENA startup ecosystem also saw other notable developments in August, including the formation of the firm Waad Investment, a coalition of Gulf-based family offices targeting a $200 million fund, and a $100 million fund launched by Singapore-based Gate Ventures and the Blockchain Center in Abu Dhabi to promote Web3 innovation.
In Egypt, T-Vencubator launched the “Where is the problem?” initiative to support the local startup ecosystem.
In the M&A space, UAE-based real estate crowdfunding platform Maisour was acquired by Meteora Developers in August, while Kuwait-based real estate technology company Sakan acquired Qatari firm Hapondo.
FlapKap raises $34M in pre-Series A round
UAE-based fintech startup FlapKap has raised $34 million in a pre-Series A round consisting of debt and equity funding. The round was led by BECO Capital, with additional participation from Pact VC, A15, Nclude, QED Investors, and debt funding from Channel Capital.
Founded in Egypt in 2022 by Ahmad Coucha, Khaled Nassef, Sherif Bichara and Kunal Harisinghani, FlapKap offers integrated, revenue-based financing solutions to help small and medium-sized businesses grow their inventory and digital advertising spend with quick access to capital and the flexibility to pay later.
The new capital will enable FlapKap to expand its SME financing services in the Gulf and the broader Middle East region. The company had previously raised $3.6 million in a seed funding round, bringing its total funding to $37.6 million.
Paymob raises $22M in Series B extension
Egyptian fintech Paymob has raised an additional $22 million in a Series B extension round, bringing the company’s total Series B funding to $72 million.
The round was led by EBRD Venture Capital, with participation from Endeavor Catalyst, as well as existing investors PayPal Ventures, BII, FMO, A15, Nclude and Helios Digital Ventures.
Founded in 2015 by Islam Shawky, Alain El-Hajj and Mostafa El-Menessy, Paymob offers digital payment solutions to both online and offline merchants. The additional funding will help the company continue its growth strategy in the MENA region.
HissaTech secures $666,000 in seed funding
Saudi Arabia-based real estate technology company HissaTech has raised 2.5 million Saudi riyals ($666,164) in a pre-seed round led by undisclosed angel investors.
Founded in 2024 by Ali Al-Shareef, HissaTech offers a platform that allows people to co-own properties, offering rental income and potential capital gains, making real estate investing more accessible to smaller investors.
The company plans to use the funding to expand its customer base, enhance its digital platform and build strategic partnerships within the real estate technology sector.
Entlaq acquires stake in food technology company Brotinni
Egypt-based entrepreneurship support company Entlaq has acquired a stake in Brotinni, an Egyptian foodtech startup, for an undisclosed amount.
Founded in 2020 by Dalia Abu Omar, Brotinni operates as a dark store that provides customers with online access to meat and poultry products.
The investment will support Brotinni’s plans to expand its operations both in Egypt and in regional markets. The company had previously raised $600,000 in a seed funding round in 2022, led by Innlife Investments.
IO Kitchens closes $2.8 million seed funding round
IO Kitchens, an Oman-based cloud kitchen startup, has closed a $2.8 million seed round, led by Tanmia Small-Cap Fund, with additional backing from family offices and regional investors.
Founded in 2021 by Hisham Hasan, IO Kitchens operates delivery-only cloud kitchens and manages a portfolio of over 30 food and beverage brands. The funding will enable the company to expand its operations across Oman.
Oyster raises $59 million, reaches $1.2 billion valuation
Lebanon-founded Oyster raised $59 million in its latest Series D funding round, reaching a valuation of $1.2 billion.
Founded by Lebanese entrepreneur Tony Jamous, the company offers a payroll and HR platform that specializes in distributed workforces or global employment.
The new funding brings Oyster’s total raised to $286 million and boosts its valuation to $1.2 billion, up from $1 billion in 2022, when it raised its $150 million Series C.
This marks a remarkable achievement as the company has maintained its valuation while many tech companies have faced declines amid challenging market conditions, according to a report by Tech Crunch.
“We’ve grown significantly, more than 7x in two years, and we’ve improved our margins tremendously. It’s a completely different business financially. So I’m glad we didn’t have a downside funding round, which would have been the expected scenario if we hadn’t grown so much and improved the business in that time,” Jamous told Tech Crunch.
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