The year 2022 witnessed a record number of exits due to a funding crunch in Emerging Venture Markets, with exits reported in Pakistan tripling last year, according to the 2023 Emerging Venture Markets Report published by MAGNiTT.
MAGNiTT, the largest verified data platform tracking venture capital investments across emerging markets, released the 2023 edition of its annual Emerging Venture Markets Report on Wednesday. The report analyses and compares VC investments in technology startups headquartered in the Middle East, Africa, Pakistan, and Turkey (MEAPT) region.
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According to the report, exits reported in Pakistan tripled in 2022, thereby exceeding the exits of the last five years combined. Pakistan-headquartered startups raised $315 million in funding across 72 deals, with six exits in 2022.
More than half the funding that Pakistan saw was covered by its top five deals in 2022 and although the number of deals in Pakistan fell by 20 percent in 2022, funding declined by only 5.4 percent.
Topline data from MAGNiTT’s latest report reveals sustained levels of funding – exceeding $7 billion for the second year in a row – and a steady number of transactions in MEAPT, driven by a record first quarter in 2022.
However, further analysis shows a decline in funding and deals in subsequent quarters – in line with a worldwide pullback in venture investing – reflecting caution by VCs as a result of several macroeconomic developments and a climate of general uncertainty.
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Within Emerging Venture Markets (EVMs), the MENA region continues to attract significant interest, surpassing its 2021 funding levels and crossing the $3 billion mark in 2022. This increase was largely driven by a 72 percent jump in funding for Saudi Arabian startups, while Egypt led the number of deals in MENA at 160 transactions. Africa saw close to $3 billion of investment as well, driven by Nigerian startups raising 29 percent of the funding and closing 198 deals. Meanwhile, Turkey led EVMs overall in the number of deals, with 295 transactions in 2022.
Exits across EVMs continued their upward trajectory to 144 in 2022, with an increase of 36 percent over 2021, reflecting continued maturity in the region’s VC industry. Middle East exits were the highest among these at 49, an increase of 69 percent over 2021.
Fintech investments continued to lead EVM deals in 2022, followed by E-commerce, Transport & Logistics, Enterprise Software, and Healthcare in a repeat of 2021 rankings.
