- Abu Dhabi enters the emerging ecosystems ranking, in the 81–90 range.
- Riyadh is in the 61-70 range while Oman is also actively building an innovation community
- MENA saw a decline of 19% in Series B+ deal amount and a 14% decline in total VC funding in 2022.
Tel Aviv remains the Middle East and North Africa’s (MENA) leading startup ecosystem and moved from seventh in the rankings, where it had sat since 2020, to number five globally.
According to research organisation Startup Genome’s Global Startup Ecosystem Report 2023, Silicon Valley still holds the top position globally, followed by New York and London in second place while Boston and Beijing have both slipped out of the top five to number six and seven respectively, losing two positions each.
Los Angeles moved to number four and Tel Aviv is ranked at number five.
Th United Arab Emirates (UAE) has made great strides in diversifying its market from oil and gas, establishing itself as an innovation hub and hot spot for entrepreneurs.
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.
Unicorns on the rise
Dubai moved up three places and is the highest-ranked MENA entry in the Emerging Ecosystems ranking at number 12.
The number of exits over $50 million has grown by 50 per cent while the number of exits over $1 billion doubled, with Swvl at $1.5 billion while witnessing a 45 per cent increase in early-stage funding count, and 114 per cent in deal amount since the 2022 report.
Two of the biggest rounds were digital banking platform YAP’s $41 million Series A round in 2022, and Buy Now, Pay Later platform Cashew’s $40 million Series A round in 2021.
“The number of unicorns increased from two to four with Astra Tech and Fenix Games joining the club in 2022, contributing to an 81 per cent increase in Ecosystem Value.
The number of early-stage funding deals also increased, by 45 per cent,” the report said.
Oman flexes muscles
While Abu Dhabi entered the Emerging Ecosystems ranking, in the 81–90 range. The city has experienced a 134 per cent 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.
Riyadh also shot up 91-100 to the 61-70 range in the emerging ecosystems while the number of unicorns doubled to two, with the highest-valued unicorn Foodics valued at $1.2 billion, increasing the Ecosystem Value by over 100 per cent.
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 programme 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,” the report said.
MENA largely held steady from 2021 to 2022, with only a very slight decrease in the amount of early-stage funding (-5 per cent), a decline of 19 per cent in Series B+ deal amount, and a 14 per cent 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 per cent rise in early-stage funding amount, a 28 per cent growth in Series B+ deal count, and an impressive 113 per cent increase in Series B+ deal amount.
AI & Big Data accounted for 34 per cent of Series A deals in the same period. Cybersecurity accounts for a 15 per cent share of Series A deals, significantly above all other regions, where it makes up 6 per cent or less.