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The United Arab Emirates (UAE) is one of the largest economies in the Middle East and North Africa (MENA), cementing its position as the region’s leading destination for venture capital investment.
In the first half of the year (H1), UAE-based companies completed a total of 85 deals with a total investment of $699 million, most recently Report MAGNiTT revealed.
The fintech sector emerged as the most successful sector in attracting investor capital in terms of total funding and number of deals completed, accounting for 34% of total UAE investment and 22% of all VC deals in the first half of 2022.
Overall, the UAE’s fintech sector brought in $234 million in 28 deals in the first half of this year, representing a 249% increase in value compared to the first half of 2021.
related: UAE’s growing role as regional fintech hub
Agriculture ranks among the two most attractive industries for investors for the first time after raising $181 million in a single funding round for AgriTech startup Pure Harvest Smart Farms. The single deal also accounted for 26% of venture capital raised in the country in the first half of 2022, while the top five deals combined accounted for 52% of the total investment raised.
UAE company with global ambitions
On the high-value end, UAE-based startups are using venture capital to expand into the wider MENA region and beyond.
When Pure Harvest Smart Farms announced its $181 million funding round, co-founder and CEO Sky Kurtz noted that the large funding round showed the company “can reliably deploy our high-tech farming solutions in the GCC. [Gulf Cooperation Council]. Now is the time to enter new markets that face similar challenges to ours. “
The UAE’s second-highest valued venture capital deal in the first half of the year was the buy now, pay later (BNPL) firm Tabby, which netted $54 million in a Series B round in March.
Learn more: UAE’s BNPL Tabby raises $54 million in Series B funding
Read the interview with Tabby’s CEO: Tabby remains independent amid growing consolidation of MENA BNPL spaces
Since then, the Dubai-based company has secured an additional $150 million in debt financing to fund its regional expansion plans. As the company said in a press release at the time, the loan was the largest line of credit ever for a GCC fintech company.
related: BNPL provider Tabby secures $150m loan to expand in MENA region
Finally, PropTech startup Huspy, which secured the fifth-largest deal in the UAE with a $37 million Series A, said it will use the capital injection to expand its operations in the UAE, Spain and seek growth in new European markets.
See more: PropTech startup Huspy raises $37 million in Series A funding
Strong start to second half of 2022
A few days later in the second half of the year, UAE-based digital bank Yap reaffirmed the country’s regional dominance in the venture capital space, with a $41 million injection earmarked to expand into Saudi Arabia, Egypt, Pakistan and Ghana .
More on this: UAE-based digital bank YAP raises $41 million to expand into Saudi Arabia, Pakistan and Egypt
What’s more, the UAE government last month announced a state-sponsored initiative aimed at promoting a business-friendly environment and fostering innovation and entrepreneurship in the country.
Learn more: UAE government employees offer paid annual leave to start businesses
As PYMNTS reports, UAE citizens employed by the government can now take a year off to start their own businesses. They will be able to do so without risking their jobs, and the state will continue to pay half their usual wages while they are on leave.
“His Highness Sheikh Mohammed was a visionary. He understood the importance of supporting the citizens of this country to realize their dreams,” said Alanoud Alhashmi, founder and CEO of Futurist Company, according to Khaleej Times. “Look at Talabat and Souq.com. They have become unicorns in the country due to their business-friendly environment.”
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