Big Data Startup Magnitt Reveals MENA Fin-tech Venture Report 2019

Magnitt, MENA-based startup data platform collaborates with award-winner regional tech hub, Abu Dhabi Global Market (ADGM), to launch the first-ever 2019 MENA Fin-tech Venture Report. The extensive report delves into the MENA region’s financial technology scene, with a key focus on startups and venture capital funding, marking the first for the region.

Through data-driven insights, the report delves into key trends in the regional Fin-Tech industry including successful exists, country comparisons, international milestones, growth driving factors and success stories.

The report reveals that a total of $237 million has been invested since 2015, totaling to 181 deals, with 51 of them being made in 2019 alone. In 2017, the fin-tech industry experienced a breakthrough in venture investments, overtaking other popular industries including e-commerce and transport and logistics.

The number of Fin-tech startups across MENA has grown rapidly over the past year, accelerating faster in numbers than most industries. Since 2012, the number of Fin-tech startups has seen a compound annual growth rate (CAGR) of 39%, with a total of 310 fin-tech active presently across the region. The United Arab Emirates (UAE) is the largest MENA fin-tech hub, accounting for 46% of all fin-tech startups, as well as 47% of all deals, and 69% of total funding in the current year. Other emerging ecosystems such as Egypt, Saudi Arabia and Bahrain are also facing a rise with the establishment of multiple private and governmental initiatives to boost the industry.

“Digitalisation of financial services is happening at an unprecedented pace. From payments, banking, financial advisory, capital market and insurance, deployment of financial technology have reimagined the financial services sector resulting innovation, efficiency and greater financial inclusion. Having a keen insight of the region’s fin-tech growth and development will enable policy-makers, regulators and investors to introduce better initiatives that support the industry. As an International Finance Centre and financial regulator, this report reveals the needs of the industry that we can better attract and secure more investments and funding to support the fin-tech ecosystem,” says Richard Teng, CEO of Financial Services Regulatory Authority (FSRA), Abu Dhabi Global Market (ADGM).

The report features six key factors that drive the industry’s prosperity, including the quick internet and online payment penetration, government support through regulatory sandboxes, government funds and accelerators. One major factor contributing the industry’s progress is the consumer demographics and positive attitudes towards fin-tech solutions and the increase in private capital availability. The combination of these factors accelerates the fin-tech industry’s efforts which boosts the success and adoption of modern-day technology.

Within the ever-growing industry, payments and remittances startups have significantly gained a large proportion of deals. In 2019, 45% of all deals were in payments and remittances, as the sub-industry continues to catch investor interest. Other sub-industry verticals include wealth management, capital markets, and personal finance. Additionally, other verticals such as blockchain are high on government agendas but have yet to see significant gain in investments.

“Fin-tech has become a buzzword across the region. It is important to be able to substantiate the hyper with data-driven insights and data transparency to support key government-level decision-makers to support founders with the right initiatives to see the continued growth of the fin-tech ecosystem,” says Philip Bahoshy, CEO and founder of Magnitt.

The availability of investors in the region is high, as the report highlights, 37 investors have invested in fin-tech startups, with regional investors accounting for 86% of them. However, 41% of these investors are first-time investors in fin-tech startups, showing a sign of increased demand. Local governments throughout the region have launched $1.4 billion of funds that are open to fin-tech investments, increasing the potential pool of capital up for grabs.