Driven by sovereign wealth funds, the trend is likely to continue as European startups return the favour through non-financial development support.
According to Amsterdam-based tech ecosystem monitoring database, Dealroom, Middle East and North African (MENA) investments into European startups have reached record highs in 2021, with €5.3 billion flowing into European tech, a figure which is already more than triple the €1.6 billion invested in 2020.
The biggest recipient of MENA funds in Europe has been the UK, which already boasts the status of the continent’s most advanced and largest startup ecosystem.
Combined with Asian funding, MENA investments into UK tech companies amounted to €2 billion, which equates to approximately 13.2% of the country’s total investments.
Tariq Bin Hendi, the Director General of the Abu Dhabi Investment Office (ADIO), believes that the trend is accentuating as a result of the COVID-19 pandemic and the pressing realisations by companies of the need “to not only diversify their marketplaces, but [to] diversify the people that are helping them access those marketplaces.”
Driven by sovereign wealth fund-led megarounds of more than €250 million, MENA funding has accumulated alongside other regions’ inpouring of investments to make Europe the fastest-growing continent in terms of venture capital (VC) investment.
And with European-based startups returning favours to MENA investors through non-financial support including training, knowledge-sharing, and beginning local operations, the two-way trend is likely to continue.