Impact Investing in MENA

Impact investing is growing in popularity as more people seek good returns while investing ethically.  Lucia Dore summarises the results of a survey conducted between 2016 and 2021.

According to Investopedia: "Impact investing is a general investment strategy that seeks to generate financial returns while also creating a positive social or environmental impact".

According to a report that has just come out by Magnitt Saudi Arabia and sponsored by Saudi Aramco Entrepreneurship Center, Wa'ad, entitled "2021 MENA VC Impact Investment Report", venture capital companies have deployed USD 444 million in Middle East and North Africa (MENA) from 2016 to Q3 2021. This was for 403 deals, accounting for 16 per cent of all MENA VC deals over the period.

KSA-based startups accounted for the most impact deals while UAE ventures raised the most impact funding. EdTech and healthcare sectors accounted for 40 per cent of the 403 impact transactions registered across MENA. And 64 per cent of all EdTech VC transactions and 56 per cent of all healthcare VC deals were closed by impact-driven startups.

Yellow Door Energy's USD 65 million round accounted for 15 per cent of all capital invested in Impact startups across MENA. Since 2016, 12 impact-driven start-ups announced exits across the MENA region, accounting for 10 per cent of all 124 start-up exits, according to the report. Notable exits by impact-driven start-ups included Ostaz by Synkers, Dawrat, Dabadoc and NOVIMED. In Q3 YTD 2021, four impact-
driven MENA-based start-ups announced exits, higher than any previous year.

Flat6Labs was the leading impact investor in start-ups based in the MENA region with 45 transactions between 2016 and Q3 YTD 2021. Saudi Aramco Entrepreneurship Center financed 500 startups while KAUST Innovation Fund, Oasis 500 and Falak Startups invested in 12 or more funding rounds raised by impact-driven start-ups in MENA.

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Thursday, 09 December 2021