Navigating the Middle East and Africa Startup Ecosystem with Insights from COREangels MEA

‍

The Middle East and Africa (MEA) region is emerging as a vibrant hub for startups, presenting both challenges and opportunities. Maha Mandour, Co-Founder of COREangels MEA, recently shared critical insights at a Leaders Meeting about the evolving startup landscape in this region. As COREangels continues its strategic expansion into the African market, understanding these dynamics becomes essential for investors and entrepreneurs alike.

‍

Funding Landscape: A Comparative Look at 2023 and 2024

The global economic challenges that marked 2023 led to a decline in startup funding, a trend seen across many regions, including Africa. However, there is optimism on the horizon. Mandour anticipates a rebound in 2025, with the second half of the year expected to present significant opportunities for growth and investment.

In Africa, the venture capital (VC) ecosystem has experienced what many describe as a "VC bubble." Over the past five years, there has been an influx of fundraising activities, leading to an oversaturation of investments. This has prompted many VCs to focus on exits for their portfolio companies. Despite this, the long-term outlook remains positive, particularly as new funds and investment opportunities are expected to emerge in H2 2025.

‍

Regional Breakdown: Where the Opportunities Lie

Africa's startup ecosystem is diverse, with distinct characteristics across its regions:

  • North Africa: Egypt continues to dominate, with Algeria emerging as a strong contender due to government support for startups. These countries are expected to see increased fundraising activities in the coming year.
  • Central and Southern Africa: Often considered as a single region, South Africa remains the focal point for funding activities. Notably, the transportation and logistics sectors have been significant, with major exits such as Laka's acquisition for $85 million USD.
  • Eastern Africa: This region is witnessing a boom, particularly in fintech and climate tech. The involvement of Gulf Cooperation Council (GCC) angel investors is notable, with many funds being established to capitalize on the growth in this area.
  • Western Africa: Like Eastern Africa, this region is thriving, with fintech leading the charge. Climate tech, transportation, and logistics are also attracting considerable investments.

‍

Sector Trends: What’s Hot in the MEA Startup Scene?

Fintech remains the dominant sector in Africa, continuing its momentum from 2022. However, climate tech is rapidly gaining ground, now representing about 45% of total funding. This shift reflects a growing global emphasis on sustainability and renewable energy.

Transportation and logistics have also been significant, particularly in South Africa, where they received 28% of total investments in 2024. Additionally, agri-tech and food industry innovations are emerging as key areas of focus, driven by the need to address food security challenges in the region.

‍

The Role of Angel Investors: A Growing Influence

Angel investment in Africa has seen substantial growth since 2022, fueled by initiatives such as the African Angels Academy and other regional networks. Maha Mandour highlighted that many African-born angel investors, now living abroad, are seeking ways to invest in their home countries. This trend has led to an increase in angel investment activity, as these investors find opportunities to connect with local markets through established networks.

Interestingly, while the majority of angel investors in Africa are male, there is a growing recognition of the need to target female African business angels. This represents a significant opportunity for COREangels MEA to foster diversity and inclusion in the investment landscape.

‍

Investment Preferences: Cautious Yet Impactful

African angel investors tend to favor smaller investments, typically ranging from $1,000 to $10,000. This cautious approach is due to a lack of confidence in making larger investments, although there is potential for growth as investors become more familiar with the market. Notably, many investors are drawn to sectors that promise social impact, such as women’s empowerment and economic development.

‍

The COREangels MEA Approach: Hands-On Guidance with a Venture Studio Model

COREangels MEA has tailored its investment strategy to meet the unique needs of the African market. By adopting a Venture Studio model, the fund offers not just seed funding but also hands-on guidance to startups. This approach helps mitigate risks for angel investors while providing startups with the support they need to scale.

The Venture Studio model is divided into three tiers—Alpha, Sigma, and Builder—each designed to cater to startups at different stages of development. This structure allows COREangels MEA to provide targeted support, whether a startup is in the ideation phase or is ready for market expansion.

Moreover, the funds' focus on impact investment aligns with the motivations of many African angel investors, who are keen on making a difference in their home countries. By providing a platform that combines financial investment with mentorship, COREangels MEA is well-positioned to drive meaningful change in the region.

‍

‍

Looking Ahead: The Future of Startup Investment in Africa

As the fund continues to expand its portfolio and services, the focus remains on fostering startups that have the potential to make a significant impact in the MEA region. With the anticipated increase in funding and investment opportunities in 2025, COREangels MEA is poised to play a crucial role in shaping the future of the startup ecosystem in Africa.

By leveraging the Venture Studio model and emphasizing hands-on guidance, Maha Mandour's fund is not only investing in startups but also in the long-term success of the region’s entrepreneurial landscape. As more global investors recognize the potential of the Middle East region, COREangels MEA's approach offers a blueprint for sustainable and impactful investment in one of the world’s most promising markets.

‍

About COREangels MEA

COREangels MEA is an Angel Portfolio Fund jointly partnered with COREangels international and PTS investments holdings. This partnership seeks to connect and support a diverse range of stakeholders, including business angels, early-stage investors, entrepreneurs, venture studios, and corporates in the Middle East and Africa, all united by their passion for investing in tech-disruptive innovations.

‍

About Leaders Meetings

Leaders Meetings are bi-monthly online events exclusively for COREangels Fund Leaders.