According to research, Saudi Arabia received $68 million in venture capital funding for startups focused on climate technologies between 2018 and the first half of 2023.
The venture data firm MAGNiTT conducted the research and found that the funds were distributed across 21 deals.
Insights from ‘State of Climate Tech VC’: Venture Capital’s Role in Shaping Climate Tech in the Middle East and North Africa
The analysis, titled “State of Climate Tech VC,” revealed that the combined venture capital funding for the Middle East, North Africa, and Turkiye amounted to $651 million over five years, spread among 225 projects.
The study highlighted the region’s increasing dedication to climate action, demonstrated by its hosting of two United Nations Conference of the Parties events in a row.
The report also stated that Saudi Arabia leads other efforts through the Middle East Green Initiative in addition to COP.
In terms of funding value, the UAE led in the category with $401 million from 45 deals. No doubt, as the UAE prepares to host this year’s Cop28 climate change conference next month, it’s pushing sustainability programs that align with the country’s expanding climate tech startup ecosystem, according to Badr Jafar, chief executive of Crescent Enterprises, which partnered with Magnitt on the research.
Furthermore, Turkiye startups garnered $124 million in 80 deals during the same period.
On the other hand, Egyptian companies made $42 million from 35 deals, while six deals in Tunisia brought in $6 million.
The survey also noted that over the period, the UAE witnessed a CAGR of 120% in funding, with Turkiye coming in second at 60%, Egypt at 38%, and Saudi Arabia at 7%.
The report also showed that, after an eleven-fold increase over the previous five years, climate tech now accounts for 5% of all venture capital funding in the region.
The industry reached its peak last year when 50 deals totaling $270 million occurred. On the other hand, thirty projects received a $40 million investment during the first half of 2023.
The climate tech saw a $181 million mega-deal in 2022 through a convertible note from Pure Harvest Smart Farms, based in Abu Dhabi. The deal captured 67% of the year’s total funding.
According to MAGNITT, the industry with the most venture capital funding was horticulture, with $288 million, and renewable energy, with $118 million.
The research included a sector-by-sector analysis, revealing that climate startups in the agriculture sector received 52% of all funding, with 20% going to the energy sector and 12% to logistics and transport.
As Saudi climate tech startups continue to attract significant funding, the region’s commitment to climate change is clear. The increase in venture capital funding for horticulture and renewable energy ventures demonstrates a shift toward sustainable innovation. With the Middle East and North Africa region becoming more committed to solving climate concerns, these projects represent a positive step forward in the battle against climate change.