Riyadh - Sharikat Mubasher: The gap in growth-stage funding in the Middle East and North Africa (MENA) region is expected to reach $20 billion within the upcoming years, a recent report showed.
The STV’s Insights report, titled “Mind the Gap: A $20bn Growth Funding Gap,” stated that MENA growth-stage companies need large capital of around $25 billion within the upcoming five years, meanwhile, the available funding worth $5 billion.
Around 220 companies have successfully secured Series A or later funding rounds, marking a significant milestone as the Saudi Arabian and overall MENA VC ecosystem enters its growth-stage phase for the first time.
The MENA growth-stage companies covered several sectors, with a main focus on e-commerce, fintech, and logistics.
The report noted that MENA venture-backed companies need to increase 10-20 times more capital during their growth-stage phase, compared to when they were early-stage. These additional and larger capital injections will enable companies to hire experienced executives, expand geographically, grow working capital, and achieve sustainability.
Moreover, the report elaborated that growth-stage fund managers need to raise from institutional investors such as sovereign wealth funds (SWFs), pension funds, and endowment funds, as opposed to early-stage funds that mainly target high-net-worth individuals (HNIs) or family offices.
