Last year saw a more than 40% decline in VC investments in Emerging Venture Markets (EVMs) such as the Middle East, Africa, and Southeast Asia, according to new research from MAGNiTT.

The findings, outlined in MAGNiTT’s 2024 Venture Investment Report, show that in 2024 just $9.1 billion (£7.3 billion) was raised across these markets, as EVMs struggled with the global funding downturn.

Additionally, startups in the Middle East and North Africa (MENA) region raised just $1.9 billion (£1.5 billion) over 2024, declining by almost a third (29%).

However, despite the worldwide dip in funding, the number of active investors in the MENA region actually rose by 20%, with the Middle East in particular seeing significant interest as total investors increased by 14%.

Conversely, Southeast Asia was hit the hardest by the drop in investments, with total funding for the region falling by 45%, followed closely by Africa, which saw a 44% decline in funding.

Across EVMs, the total number of deals fell by 20%, to 1,527, with just ninety-four exits, a decline of 32% from 2023.

The fintech industry continued to dominate the funding landscape for emerging markets in 2024, accounting for 322 deals, ahead of the enterprise software sector, with just 170 deals secured. However, those numbers represent a significant fall, with the number of fintech deals down by 20% on 2023.

The total amount of fintech investment across EVMs also fell, coming down 7% to $3.9 billion (£3.2 billion), although that trend was bucked by Southeast Asia, which saw a 39% increase in fintech investment, reaching $2.8 billion (£2.2 billion) alone. 

Fintech accounted for six out of the ten biggest deals coming from EVMs last year, with Mynt, a startup from the Philippines, ranking first after raising $786 million (£636.8 million).   

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The report also found that Antler, 500 Global, and Flat6Labs remained the most active investors across EVMs, with 42% of their deals focused on Middle East startups. General Atlantic, meanwhile, became the most active investor by capital deployed across EVMs in 2024, with $533 million (£432 million) in invested capital.

“The MENA region is emerging as a pivotal hub for venture capital, attracting global players with its unique blend of opportunities and rapid ecosystem growth,” said Yana El Dirani, head of MENA at Endevor Catalyst.

“As we look to the year ahead, this momentum is set to intensify. Sovereign wealth funds and regional champions are not only driving capital inflows but are also partnering with international VCs to localise expertise and unlock value.”