After reaching new heights in 2021, EMEA VC funding slowed sharply in 2022.
The final tally for the full year is yet to be finalized, but data for the first three quarters clearly show that startups in Europe, the Middle East and Africa (EMEA) have had fundraising despite a relatively strong first half. suggesting that you are feeling the chill of the winter.
In this year’s fundraising overview, PYMNTS looks at the impact of the global recession on venture capital (VC) investments across the EMEA region.
Europe: Market Conditions Hit Startup Valuations
As usual, Europe will dominate the EMEA VC dollar in 2022 and was on track to surpass €100 billion in total funding for the second year in a row in the first half of this year.
But then the third quarter happened and now it looks like the continent’s startups will end the year with less than €90 billion in funding.
Continuing its position as Europe’s engine of innovation, the UK has attracted more investment than any other country in the region. Nevertheless, in a pattern repeated across the continent, the country has been unable to beat 2021 levels of investment since the second quarter.
The UK’s largest VC round came courtesy of online payments company Checkout.com, which raised $1 billion in January at a valuation of $40 billion.
That said, earlier this month PYMNTS reported that the company had lowered its internal valuation to around $11 billion to better reflect market conditions.
Middle East: UAE still leads, Saudi Arabia chasing
In the Middle East, VC investment follows a pattern similar to other regions.
Notably, Saudi Arabia has been able to buck trends in the wider region, observing year-over-year (YoY) growth in VC investment in every quarter so far this year.
Saudi Arabia now even rivals the United Arab Emirates (UAE) in terms of startup capital, attracting more VC investment than its neighbor the Gulf Cooperation Council (GCC) for the first time in Q2 2022. rice field. The most valuable round of the year was restaurant tech company Foodics, where he raised a $170 million Series C in April.
But while Saudi startups are catching up with their emirate peers, the UAE remains the only country with consistent funding rounds of $100 million or more in the GCC.
In 2022, the UAE’s status as a major regional financial center will remain important in attracting VC investment.
For example, some of the nation’s largest VC checks written this year have gone to corporate investors, such as $150 million raised by blockchain gaming company Fenix Games. Made by a small studio.
On Monday (December 19), Dubai-based technology development and investment firm Astra Tech announced it had raised $500 million from G42. A company in the artificial intelligence (AI) business.
Africa postpones slowdown until Q3
After a record-breaking 2021, when VC firms invested $5.2 billion in African startups, the African continent is off to a similarly strong start to the year. In the first half of this year, the region was able to sustain year-over-year growth in his total VC funding.
In an interview with PYMNTS in July, Obi Emetarom, co-founder and managing director of Fintech AppZone in Nigeria, said: [investment] There is a lot of cash in circulation in the winter.
However, despite the auspicious start to the year for the African VC ecosystem, Emetalom’s optimism was not shared by all.
Maurizio Caio, managing partner at TLcom Capital, a VC fund manager, told PYMNTS in August: [but it’s only because] Less stuff to pinch. ”
By the end of the third quarter, it became clear that Africa’s initial immunity to investors’ tougher attitudes could not last forever.
The exception to this rule is Kenya, which, along with Saudi Arabia, is one of the few countries in EMEA to see a year-on-year increase in VC funding in Q3.
Kenya’s anomalous positioning in the third quarter was helped by a string of FinTech deals ranked among the continent’s largest, including a $10 million Series A round in InsureTech firm Turaco.
As the PYMNTS FinTech Funding Map reveals, Kenya is one of Africa’s prominent FinTech hotspots, with M-KOPA’s disclosed funding of $263.6 million being the highest in South Africa. It outperforms successful FinTech startups and is beaten only by a few large Nigerian companies.
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