Venture funding gains momentum
Sizes of private equity deals suffered a dramatic fall last year to $1.06b in Mena
Dubai: Venture capital activity in the region is picking up pace in the Middle East and North Africa (Mena) as private equity deal sizes are coming down, said industry experts in Dubai Tuesdayon the sidelines of a event organised to release the fourth annual Private Equity & Venture Capital in the Middle East report.
Private equity in the Middle East suffered a decline in 2009, with fund managers raising only $1.06 billion compared to a near-record $5.4 billion in 2008 according to the report by the Gulf Venture Capital Association (GVCA) in collaboration with KPMG and Zawya.
Private equity investments have also declined from $2.72 billion in 2008 to $561 million in 2009. Private equity investments globally as well as regionally were affected by the continued recession in 2009.
Private equity firms in the Mena region raised $1.25 billion in the first quarter of 2010, an 18 per cent per cent increase overall of 2009, as regional economies recovered and investor appetite returned.
"Overall there is a revival in the fund raising activity in the region, the size of regional private deals has clearly come down," said Vikas Papriwal, KPMG's UAE Country Head of Private Equity and Sovereign Wealth Funds.
Industry players also observed that there is an increasing appetite for venture capital (VCs) investing in the region.
"There is a growing interest from regional investors in funding startups through VCs and angel funding," said Frederic Sicre, Executive Director of Abraaj Capital. Venture capital received significant attention in 2009 with seven transactions estimated at $25 million was closed, a substantial increase over previous years.
