Saudi Arabia was the only country to see investment growth substantially at a rate of 159 % compared to 2022, within its start-up scene, start-up data platform Wamda said in a report.

“Government efforts to ease regulations and build an attractive start-up hub in Riyadh are paying off, with an increasing number of start-ups from across the region relocating their headquarters to Saudi Arabia, in a bid to gain access to capital and the region’s largest market,” said the report.

According to the report, most of the countries in the region performed lower, including Egypt, which saw the number of transactions decrease to 90 and investment drop 17 % last year compared to 2022 while debt-free investment. The amount raised by UAE-based startups decreased by 47%  including debt, while debt-free investment decreased by 65%.

“While the overall amount raised grew slightly to $4 billion in 2023 across 583 transactions, this includes the $1.77 billion in debt financing across 10 deals. Without this debt, the total amount raised by Mena startups dropped by 35%, said the report.

Wamda said in its report that overall start-ups within the MENA region raised $4 billion in 2023, which is a 1.7% annual increase; however, a substantial percent came from  debt financing which  tripled last year due to the buy now pay later startups, Tabby and Tamara- together raised $1.3 billion in debt.

The report explains that the debt and equity amount raised by these two startups alone accounted for almost 51% of the total amount raised last year. These two startups also contributed to Saudi Arabia’s growth in funding. Besides Morocco and Oman, which saw a 30%  and 39 %rise respectively.

The report explains that outside of the $1.77 billion funds that were raised through debt, the total amount raised was $2.25 billion, a decrease of 35% in comparison to 2022.