UAE Dominates the Ecosystem

Once again, the UAE emerged as the top-performing ecosystem in MENA. Leading the charge were UAE-based startups eyewa and Lean Technologies, which secured $100 million and $67.5 million, respectively. This propelled the UAE to the top spot for the second consecutive month, with $146 million raised across 11 deals.

Strong Performances from Saudi Arabia and Egypt

Saudi Arabian startups claimed the second-highest funding total, with 23 startups raising $94 million in November. Meanwhile, Egypt ranked third, as eight startups raised nearly $16 million—a significant jump from October’s $1.6 million. This growth is particularly impressive given Egypt’s ongoing geopolitical challenges and the depreciation of its currency.

E-Commerce Takes the Lead

In sectoral performance, e-commerce led the way, primarily driven by eyewa’s impressive funding round. Seven startups in this space collectively secured $104 million. This marked a shift in investor focus, pushing fintech to second place with $80 million raised across four startups. Software as a Service (SaaS) providers also emerged as strong contenders, attracting $21 million across seven rounds.

Later-Stage Funding Gains Traction

November’s investment landscape in MENA saw a significant focus on later-stage funding rounds. Eyewa’s Series C, Lean Technologies’ Series B, and Cipher’s $13.3 million pre-IPO funding highlighted this trend. Series A startups attracted $23 million through two deals, while pre-seed startups led in deal volume, securing approximately $5 million across 16 transactions.

B2B Models Continue to Lead

The business-to-business (B2B) model maintained its dominance, receiving 48% of total funding in November. In contrast, business-to-consumer (B2C) startups raised $11.5 million across 12 deals, with the remainder distributed among eight startups operating in both domains.

Gender Disparity Persists

Male-led startups continued to capture the lion’s share of investment, securing 90% of the total funding. Female-led startups received just $583,000, while startups co-founded by male and female entrepreneurs raised $22.5 million.

November’s Reflection of 2024 Trends

The trends observed in November 2024 align with the broader patterns seen throughout the year. The MENA region’s tech ecosystem is evolving, with stronger performances from later-stage startups and diversified sectoral investments, setting the stage for a promising 2025.

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Strong Gains in the Official and Parallel Markets

The naira exhibited remarkable gains over the past week. Starting at N1,663/$ on Monday, the currency strengthened to N1,537/$ by Friday in the official market, achieving a price gain of N126/$.

In the parallel market, the naira peaked at N1,530/$ on Saturday morning before stabilizing at N1,580/$ on Sunday in Nigeria’s commercial hub, Lagos. However, technical analysis indicates that for sustained bullish momentum, the naira must breach the N1,500/$ threshold; failure to do so may see the currency revert to the N1,600 resistance line.

EFEMS: Revolutionizing FX Trading

The Electronic Foreign Exchange Matching System (EFEMS), launched on December 2, 2024, addresses persistent challenges in Nigeria’s FX market, such as opacity and inefficiency. By enabling real-time trading and ensuring transparency, EFEMS facilitates smoother operations and boosts confidence among market participants.

According to Omolara Duke, Director of the CBN’s Financial Markets Department, EFEMS represents a “game-changing tool” for the FX market. In a circular to banks, she stated, “This initiative represents a significant advancement in ensuring uniformity and seamless operations among market participants.”

How EFEMS Works

EFEMS allows authorized dealers, including commercial banks, to place real-time buy and sell orders. The platform automatically matches transactions, ensuring quick execution and offering real-time visibility to both regulators and market players. Key features include:

• Consolidation of trade statistics accessible to market participants.
• Integration with banks’ middle and back-office systems.
• Finality of trades executed on the platform. Naira Surges
• Enforcement of credit and settlement limits to mitigate counterparty risks.

Boost from International Bond Market

Adding to the naira’s momentum, Nigeria re-entered the international bond market on Monday, raising $2.02 billion through oversubscribed Eurobonds. The bonds, sold in two tranches, attracted subscriptions totaling $9.01 billion, significantly boosting liquidity.

The Federal Government issued:

• $1.05 billion in 10-year bonds at a 10.375% coupon rate.
• $700 million in 6-year Eurobonds maturing in 2031 at a 9.625% coupon rate.

A Vision for Transparency and Trust

CBN Governor Mr. Olayemi Cardoso described EFEMS as a revolutionary step toward achieving price discovery and enhancing market transparency. He emphasized, “The exchange rate unification is a crucial reform, but it’s only the first step.”

With the launch of EFEMS, the CBN aims to foster transparency, rebuild trust, and attract fresh investments. As part of this reform, Nigeria’s FX market officially transitioned to the electronic matching system on December 2, 2024.

Conclusion

The introduction of EFEMS and the naira’s strong performance highlight the CBN’s commitment to enhancing Nigeria’s foreign exchange market. These reforms, coupled with the successful Eurobond issuance, mark a pivotal moment in driving stability and confidence in the Nigerian economy.

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