According to a report by Abu Dhabi Global Market (ADGM) and MAGNiTT, $237 million dollars has been invested in MENA-based FinTech startups since 2015.
FinTech has received 181 investments over 5 years, accounting for 10% of all venture investment deals across MENA. Other key points from the report include;
- FinTech Investments: 2017 was the breakout year for FinTech investments across MENA. In 2018 and 2019, FinTech ranked first in the region by number of deals, overtaking other popular industries such as e-commerce, transport, and logistics.
- Key Adoption Drivers: The report highlights 6 key drivers of FinTech across MENA, including faster connections and online payments penetration, government support through regulatory sandboxes and government funds & accelerators, consumer demographics and attitudes towards FinTech solutions, as well as the increase in private capital availability.
- Sub-industry verticals: In 2019, 45% of all FinTech deals were in Payments & Remittances startups. Wealth Management, Capital Markets, and Personal Finance also account for several deals, whereas InsurTech has received significant amounts of funding too, mainly for insurance comparison. Other FinTech sub-industries including blockchain are high on government agendas, but have yet to see significant traction in investments.
- Growth: The number of FinTech startups across MENA has grown rapidly over the past few years. Since 2012 the number of FinTech start-ups has seen a compound annual growth rate (CAGR) of 39%, with a total of 310 FinTech start-ups currently active across MENA.
- Market Leader: UAE is the largest MENA FinTech hub accounting for 46% of all FinTech start-ups, as well as 47% of all deals and 69% of total funding in 2019 YTD. Other ecosystems, such as Bahrain, Egypt and Saudi Arabia are emerging, with multiple private and government initiatives to boost the industry.
- Capital Availability: 37 investors in 2019 YTD have invested in FinTech startups, with regional investors accounting for 86% of them. However, 41% of these investors had not previously invested in FinTech start-ups. Moreover, local governments have launched $1.4B of funds that are open to FinTech investments, increasing the potential pool of capital available for startups.
You can see the full report here.
Alpha Management has years of experience with both the DIFC FinTech and ADGM Tech Start-Up regimes and we have helped many clients structure their entities in both jurisdictions. Please contact us for more information.