Qatari startups amassed 41 percent more capital in H1 2021
Qatar Development Bank and MAGNiTT has launched, exclusively, the first 2020 Qatar Venture Investment Report on the country’s startup ecosystem. The free report that can be downloaded here shows that the success of Qatar’s venture capital ecosystem in 2020 lay in its ability to withstand the impact of COVID-19, growing 9 percent between 2019 and 2020. In fact, continuing this upward trajectory, Qatari startups already amassed 41 percent more capital in H1 2021 than they did in full-year 2020.
In Qatar’s venture investment ecosystem, accelerated programs were responsible for 33 percent of all transactions. This defied the trend noted in MENA where COVID-19 forced a slowdown of accelerator programs, with accelerated deals dropping by 9 percentage points YoY in 2020. All transactions in 2020 were in favour of early stage startups. Share of the largest five deals in total venture investment dropped from 78 percent in 2019 to 63 percent in 2020, leaving other deals with access to more funding.
A major proponent of this growth was the support from accelerator programs, which accounted for a third of total deals in Qatar in 2020. Abdulaziz Bin Nasser Al-Khalifa, CEO at Qatar Development Bank, commented, “The importance of venture capital to the success of SMEs stems from its capability to quickly transfuse this burgeoning sector with the funds it requires to accelerate growth and achieve a sustainable level of development. This fact puts VCs at the forefront of those willing to believe in the unbound potential of startups & SMEs and the innovative offerings they bring to market.”
To put this into perspective, accelerated deals dropped YoY in most geographies in MENA, constituting only 23 percent of all transactions across the region.
With digitalization gaining traction in 2020, the E-commerce and F&B sectors together closed three key deals that raised 43 percent of the year's capital. E-commerce startups saw 40x more funding YoY, contributing 20 percent of the total capital deployed in Qatar in 2020. Meanwhile, the number of startups to raise funding from the Home Services sector went from one in 2019 to three in 2020.
Alongside insights on venture capital investment, the report also features a detailed map on all startups and investors that participated in fundraising in 2020.