Digest 12 | February 2024

What companies are telling us

• The UAE is piloting the mBridge system of international settlements in digital currencies. The UAE Central Bank made the first cross-border transfer of digital dirhams to China worth AED 50 million ($13.6 million).
• Qatar and Switzerland are discussing opportunities for cooperation in infrastructure development, digital, and sustainable finance.
• Mastercard and Emirates NBD will develop digital banking in Egypt.
• S&P Global believes GCC banks will remain profitable in 2024 despite geopolitical uncertainty and potential economic headwinds.
• Emirates NBD has announced a partnership with technology company Silent Eight, which offers an AI platform to detect and prevent financial crime.
• Commercial Bank of Kuwait (Al-Tijari) is partnering with Network International to empower the digital transformation of banking and payments.
• Technology company Astra Tech has partnered with Al Etihad Payments (AEP), a subsidiary of the Central Bank of the UAE (CBUAE). As part of the partnership, Botim (Astra Tech) will become the first fintech platform where Aani, an instant payments platform, will be available.?
• Egypt's Al Baraka Bank and Mastercard plan to develop premium consumer, commercial, and SME products.
• Commercial Bank International (CBI) and Fuze will explore and develop new digital asset solutions and services. The companies will consider new scenarios for the use of crypto-services that can unlock the potential of blockchain and other areas, including payments and investments.
• Abu Dhabi Global Market International Financial Centre (ADGM) has signed a memorandum of cooperation with the Solana Foundation, which is focused on the decentralization and implementation of the Solana blockchain.

Comment by red_mad_robot Market Research Center: several collaborations will enhance existing Web3 offerings and strengthen the UAE as one of the flagships for crypto market development, including the blockchain solutions ecosystem.?

New product launches and startups

Fintech Galaxy has launched FINX Comply in the UAE, a cloud-based SaaS solution for Open Banking services compliance for banks and financial institutions, enabling them to integrate with centralized APIs and comply with regional standards.

Kema is developing a SaaS fintech platform that aims to automate and streamline the cash flow process for SMEs in MENA, saving them time and money. The platform has no-code plugins that sync with leading accounting software such as Xero and Quickbooks. The company can generate and process invoices, accept payments through various digital channels, and get real-time cash flow analytics. The startup raised $2 million in a seed round.

Market Analytics

Outcomes of the investment and startup landscape of MENA countries in 2023

Investments in startups grew by only 1.7% in 2023. Compared to 2022, the figure is down 35%. Half of the $4 billion raised by startups in 2023 came from debt financing, which tripled to $1.77 billion.

Saudi Arabia became the center where investments in startups increased by 160%. At the same time, investments in the UAE decreased by 47%. Egypt also suffered: investments fell by 17% and the number of deals halved.

Fintech remained the leading sector, accounting for 58% of total investment, but this was largely driven by the mega-rounds of two BNPL services, Tamara ($340m) and Tabby ($200m). Without them, fintech investment would have fallen by 60%.

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