The Global Startup Ecosystem Report 2023

Insights, Rankings & Ecosystem Pages

In the period 2018–2022, MENA saw a 96% rise in early-stage funding amount, a 28% growth in Series B+ deal count, and an impressive 113% increase in Series B+ deal amount.

MENA largely held steady from 2021 to 2022, with only a very slight decrease in the amount of early-stage funding (-5%), a decline of 19% in Series B+ deal amount, and 14% decline in total VC funding. Even with this downturn, the region remained above 2020 funding amounts.

In the period 2018–2022, MENA saw a 96% rise in early-stage funding amount, a 28% growth in Series B+ deal count, and an impressive 113% increase in Series B+ deal amount. AI & Big Data accounted for 34% of Series A deals in the same period. Cybersecurity accounts for 15% share of Series A deals, significantly above all other regions, where it makes up 6% or less.

The United Arab Emirates has made significant strides in diversifying its market from oil and gas, establishing itself as an innovation hub and hot spot for entrepreneurs. The nation prides itself on having a strong talent pool, ample funding opportunities, and both legislation and infrastructure that nurtures the growth and success of startups. Abu Dhabi and Dubai are both global hubs for entrepreneurship, with initiatives including the Cheung Kong Graduate School of Business's Global Unicorn Program in Dubai supporting the government's plan to foster the growth of 30 unicorns within 10 years.

Oman is also actively building an innovation community as it sets out a vision towards a more diverse, knowledge-based economy, as outlined in the Oman 2040 initiative. To aid economic recovery from the COVID-19 pandemic, the nation initiated a three-year program aimed at fostering and developing the financial sector. The city of Muscat was the Arab Digital Capital in 2022, cementing its status as a hub for digital innovation and enterprise.

Key Findings

  • Tel Aviv remains the region’s leading ecosystem and is thriving. It moved from #7 in the rankings, where it had sat since 2020, to #5. Its Ecosystem Value grew by 100% ($235 billion) from July 1, 2019–December 31, 2021 to July 1, 2020–December 31, 2022., buoyed by several exits over $1 billion. Fintech Pagaya reported the highest exit at $8.5 billion. The number of unicorns has also risen considerably, with a massive 33 new entrants bringing the total to 57, including Blockchain company Fireblocks, valued at $8 billion.
  • Dubai moved up three places and is the highest ranked MENA entry in the Emerging Ecosystems ranking at #12. The number of exits over $50 million has grown by 50% while the number of exits over $1 billion doubled, with Swvl at $1.5 billion. The number of unicorns increased by from two to four with Astra Tech and Fenix Games joining the club in 2022, contributing to an 81% increase in Ecosystem Value. The number of early-stage funding deals also increased, by 45%.
  • Cairo shot up from 71-80 to the 51–60 range in the Emerging Ecosystems ranking, fueled in part by a $1.5 billion exit from Swvl. The Ecosystem Value grew 97%, to $8 billion.
  • Riyadh also shot up 91-100 to the 61 - 70 range in the emerging ecosystems. Food delivery platform Jahez is valued at $2.4 billion, while the number of unicorns doubled to two, with highest-valued unicorn Foodics valued at $1.2 billion, increasing the Ecosystem Value by over 100%.
  • Abu Dhabi entered the Emerging Ecosystems ranking, in the 81–90 range. The city has experienced a 134% increase in Ecosystem Value to $3.9 billion, partly attributed to the growing number of exits over $50 million, with Agtech Pure Harvest Smart Farms valued at $1.3 billion.