$67 million in tech startups
invested in last three years

Demand for funds could
reach $80 million annually

Funding institutions have invested $67.4 million in technology startups over the last three years. These investments included nearly $20 million invested by Berytech Fund II in 2015.

The remaining $47 million were invested from the beginning of 2013 to the end of September 2015 by other funding institutions that included Kafalat iSME Co-Fund, Berytech Fund I, Leap Ventures, Saned Partners, Speed@BDD, and other funds, according to the ‘State of Digital Investments in MENA’ report by ArabNet.

Paul Chucrallah, Managing Director of Berytech Fund II, said that he estimates that the innovation and tech startup market has an absorption capacity of $50 million to $80 million annually.

He said that the level of investments in recent years was not high because the implementation of the Central Bank’s circular 331 was slow. The circular, launched in the second half of 2014 did not gain momentum until the second quarter of 2015. The circular aimed to attract up to $400 million of investment to the innovative and tech sector.

The report estimated $718 million to have been invested in technology startups in the Middle East and North Africa region over that three year period. Lebanon was among the top five countries in the MENA region in terms of number of investment deals and the number of funding institutions. The other countries are the UAE, Egypt, Saudi Arabia, and Jordan. The UAE secured the lion’s share, both in terms of number of deals and number of investors.

Lebanon’s share in the overall number of MENA deals rose over the three-year period from ten percent in 2013, to 14 percent in 2014 and 17 percent in the first nine months of 2015.

There are two seed funds, one accelerator, three venture capital firms, and one growth capital fund operating in Lebanon.

The female share of founders and co-founders of investor-backed digital startups in the MENA region was 12 percent. About nine percent of them were located in Lebanon compared with 38 percent in the UAE and 17 percent in Jordan.

ArabNet said that the report covered more than 70 percent of the market activity and that it collected data about more than 50 funding institutions and 400 deals.