The total funding secured by start-ups in the Mena region rose by 64 per cent in the first half of the year as economies in the region continue to recover from coronavirus pandemic and investors allocate more cash to promising start-ups. Funding for Mena start-ups during the period stood at $1.2 billion, more than the $1.09bn raised in the whole of last year, according to the latest report from data platform Magnitt. However, the number of deals dropped by 20 per cent to 254 as angel investors diverted funds towards more traditional asset classes such as stock markets and property. “With $1.2bn in investment, VC [venture capital] funding reached record quarterly, half-yearly and yearly levels in Mena in the first six months of 2021, showing signs of a strong recovery from 2020,” the report said. Major funding rounds in the first six months of the year included $415m for Dubai's cloud kitchen company <a href="https://www.thenationalnews.com/business/2021/07/01/dubai-cloud-kitchen-company-kitopi-raises-415m-in-funding-round-led-by-softbank/">Kitopi</a>, $30.5m for Saudi Arabia’s e-commerce platform <a href="https://www.thenationalnews.com/business/technology/saudi-arabia-s-sary-secures-30-5m-in-venture-funding-1.1218145" target="_blank">Sary </a>and $30m for Egypt-based freight start-up Trella. Digital payments start-up <a href="https://www.thenationalnews.com/business/technology/egypt-s-paymob-secures-15m-to-grow-digital-payments-offer-1.1199599" target="_blank">Paymob also secured</a> $15m in new funding to expand its operations across the region as the coronavirus pandemic prompts a surge in cashless transactions. “In terms of capital, food and beverage, FinTech and e-commerce are the industries that saw the most capital invested,” Philip Bahoshy, chief executive and founder of Magnitt, told <i>The National.</i> SoftBank Group’s Vision Fund 2 led the funding round for Kitopi, which also attracted Chimera, Abu Dhabi’s DisruptAD, US-based B Riley, Turkey’s Dogus Group, Next Play Capital and Nordstar, the cloud kitchen company said earlier this month. The deal is the first investment by Vision Fund 2 in a UAE-registered company. VentureSouq, which is backed by Saudi Arabia's Public Investment Fund through its Jada Fund of Funds, led the latest funding round for Sary along with Riyadh's STV and a Silicon Valley fund known as Rocketship.vc. The funding round for Trella was led by Maersk Growth and Raed Ventures. “This year has seen more later-stage investments in the first half than in any previous year,” said Mr Bahoshy. “In fact, 23 per cent of all of the deals that took place were greater than $10m, which is higher than any previous year on record. Investors coming back from the pandemic increased their risk appetite and their investments have been towards the later stage, more mature investments rather than earlier-stage start-ups.” The UAE, the Arab world’s second-biggest economy, led the way in terms of deal numbers, with its start-ups securing 61 per cent of all Mena investments, according to the report. The top three Mena centres – the UAE, Egypt and Saudi Arabia – accumulated 71 per cent of total capital invested during the period, the data showed. The UAE closed 65 deals in the first half of the year, accounting for 26 per cent of all transactions in the Mena region. Egypt and Saudi Arabia were ranked second and third with 24 per cent and 21 per cent of transactions, respectively. Although the food & beverage sector took the biggest share of funds invested, FinTech companies were involved in the most deals, according to the report. Mr Bahoshy expects total funding for start-ups to exceed $2bn by the end of 2021 as the economies continue to recover from the coronavirus pandemic. “If accelerator programmes and early stage investment returns in the second half of the year, we will also see more investment deals in the region than any previous year,” he said. “I also anticipate that we will see more acquisitions and consolidation through mergers and acquisitions as the market looks to strengthen coming out of the pandemic.” <br/>