MAGNiTT in collaboration with Abu Dhabi Global Market (ADGM) have launched the “2019 MENA FinTech Venture Report” today.
The in-depth report includes a deep-dive into the financial technology (FinTech) industry across the Middle East and North Africa, with a key focus on startups and venture capital funding. Through data-driven insights, the report delves into key trends in the regional FinTech industry, including venture investments, successful exits, FinTech growth drivers, sub-industries, country comparisons, international benchmarks and success stories.
The report highlights 6 key drivers of the FinTech across MENA, including the quick internet and online payments penetration, government support through regulatory sandboxes and government funds & accelerators, consumer demographics and attitudes towards FinTech solutions, and the increase in private capital availability. Through the combination of these factors, the FinTech industry and startups receive a boost, which accelerates and smoothens adoption.
Within the quickly growing FinTech industry, Payments & Remittances startups have historically received a large proportion of the total FinTech deals.However, Wealth Management, Capital Markets and Personal Finance also account for several deals, whereas InsurTech has received significant amounts of funding as well, mainly for insurance comparison. Other FinTech sub-industries, including blockchain, are high on government agendas, but have yet to see significant traction in investments.
The number of FinTech startups across MENA has grown rapidly over the past years, accelerating quicker in numbers than many other industries. The number of FinTech startups has seen a compound annual growth rate, with a total of 310 FinTech startups active presently across MENA. The United Arab Emirates (UAE) is the largest MENA FinTech hub, accounting for 46% of all FinTech startups, as well as 47% of all deals and 69% of total funding. Other ecosystems, such as Bahrain, Egypt and Saudi Arabia, are emerging, with multiple private and government initiatives to boost the industry.
Regional investors accounted for 86% of them. However, 41% of these investors had not previously invested in FinTech startups, showing increasing appetite. Moreover, local governments have launched $1.4B of funds that are open to FinTech investments, increasing the potential pool of capital available for startups.