Happy Friday! Out of the six startups that announced funding this week, there’s only one that didn’t go to town on the AI angle.

A quick keyword density check confirmed my worst suspicions, with the word “AI” appearing a staggering 22 times throughout this week’s round-up.

Fair to say, there could - hear me out - maybe be an AI trend emerging?

Make that 23…

P.S. If you missed our weekly Wednesday deep-dive, we looked at how a wave of startups like Tuhoon and others are addressing mental health challenges in MENA, and the current state of digital mental healthcare in the region, you can check it out here.

This week’s round-up is a 5 min read:

• 🤖 Saudi-based Intelmatix raises $20M Series A to unlock AI-driven decision-making for MENA organisations

• 📉 Could 23% of Seed and 20% of Series A startups in MENA be written off by December?

• 💳 Egyptian unicorn MNT-Halan acquires Turkey’s largest nonbank micro-leasing firm

• 🔈 Catch-up on the latest episode of our VC React Podcast

🚀 Weekly funding round-up

Educatly (🇪🇬 Egypt), an edtech startup leveraging AI and LLMs to provide students with info on university programmes across the globe, has secured $2.5 million in funding led by TLcom Capital and Plus VC, with participation from Egypt Ventures and the HBAN syndicate (Ireland).

Cartona (🇪🇬 Egypt), an asset light, B2B e-commerce platform connecting FMCG suppliers and wholesalers with retailers, has raised $8.1 million (mix of debt + equity) in a Series A extension round, led by Algebra Ventures, with participation from existing investors Silicon Badia and the SANAD Fund for MSME, alongside debt capital from Camel Ventures and GlobalCorp.

Synapse Analytics (🇪🇬 Egypt), an AI startup empowering financial institutions to leverage AI for better decision-making, has raised $2 million in a round led by Silicon Badia and Hub 71, with plans for the funds to be used to expand its AI technologies across the GCC and Africa.

Velents AI (🇸🇦 KSA), an AI-powered SaaS platform that automates the hiring process to mitigate bias and cut hiring costs, has raised an undisclosed investment led by Women Collective, with over 80% of the funding coming from women, including six first-time angel investors.

Verbatica (🇦🇪 UAE), a startup developing an AI-enhanced language learning platform for English and Arabic, has secured $700,000 from angel investors, to help launch its platform across MENA by August 2024.

Logistics

🤖 Saudi-based Intelmatix raises $20M Series A to unlock AI-driven decision-making for MENA organisations

🤖 Saudi-based deep tech B2B AI startup Intelmatix, has closed a $20 million Series A funding round, to provide AI-powered decision-making tools tailored to the specific needs of organisations in the MENA region.

• Intelmatix has offices in Riyadh, London, and Boston, and was founded in 2021 by a group of MIT graduates led by Anas Alfaris, Almaha Almalki and Ahmad Alabdulkareem.

💰 Investor lowdown: The round was led by Shorooq Partners and included Saudi Venture Capital Company (SVC), Saudi Technology Ventures (STV), Olayan Financing Company, Sultan Holdings, Zain Ventures, and Rua Growth Fund.

❌ Barrier to adoption

Most enterprise AI platforms are designed for U.S. datasets and large enterprises with dedicated AI teams, creating several challenges for MENA businesses:

• A talent gap and impracticality for local use

• Slow adoption of automated decision-making solutions due to the lack of customised AI options

📈 Did someone say AI?

Intelmatix’s answer is an AI-powered platform called EDIX, designed for rapid deployment without requiring an in-house AI team.

It provides immediate recommendations for operational and strategic decisions using client and contextual data.

Targeting the retail, logistics, and workforce sectors, EDIX helps businesses with demand and supply forecasting, location optimisation, recruitment, staff planning, scheduling, fleet management, and marketing.

• It’s unclear if Intelmatix have built their own LLM, or are using an existing Arabic LLM like G42’s Jais or Huawei’s “Arabic LLM”.

🐂 Bull case

1. During a year-long pilot in the F&B sector, Intelmatix improved demand forecasting by 15%, reduced wastage costs by 75%, and cut overtime by 25%, with over 80% accuracy in predicting new branch revenue.

2. Despite competition from U.S. platforms like o9 and Palantir, Intelmatix’s local expertise gives it an edge in the MENA region.

3. The global enterprise AI market is projected to reach $68.9 billion by 2028, growing at a 43.9% CAGR.

🔮 Flashforward

The Saudi startup will use the fresh funding to target SMEs and public entities in MENA, while enhancing its platform and broadening its reach.

💰 VC round-up

🌎 New research from Clearworld indicates that by December, 23% of seed startups and 20% of Series A startups in MENA will be written off. An estimated 106 seed and Series A startups will exceed their holding period threshold, making further funding nearly impossible.

This will mark the highest number of failed startups in the region within a year. In MENA, the benchmark holding period for seed and Series A startups is 1-3 years. When this period extends beyond 6 years for seed to convert to Series A, and 5 years for Series A to convert to Series B or exit, the chances of success drop to almost zero.

 💸 Acquisitions

💰 Egyptian fintech MNT-Halan acquired Turkey-based Tam Finans, a commercial finance company, using most of the $157.5m in funding it secured last week to complete the purchase.

MNT-Halan, with a $600 million loan book, focuses on unbanked consumers, while Tam Finans, with a $300 million loan book, lends to small businesses.

• Tam Finans, Turkey’s largest nonbank micro-leasing firm, will help expand MNT-Halan's factoring business in Egypt and consumer credit in Turkey.

• MNT-Halan plans to introduce its popular electronic wallets in Turkey.

This the Egyptian company’s second acquisition of the year, after purchasing a bank in Pakistan earlier in the year. MNT-Halan is already issuing loans in the UAE, and has eyes on the Saudi Arabian and South African markets.

💰 VC React Podcast: Episode 5

In last week's episode of the VC React Podcast, Ahmad and I dug into Wa'ed Ventures' recent investments across the AI stack in aiXplain and Rebellions, Egyptian unicorn MNT-Halan's mega-round, OTO's $8m Series A to fuel UAE and Turkiye expansion, and Oasis500 and the state of the accelerator model in the MENA region in light of ISSF's increased commitment to their second fund.

‍And as usual, we were not alone - we had the tremendous pleasure to be joined by:

• Ali Zewail (Venture Partner at Endure Capital)

• Hasan Haider (Founder & Managing Partner at Plus VC (+VC))

• Khaled Talhouni (Managing Partner at Nuwa Capital)

📆 Events and opportunities

🤖 A 10-week equity-free accelerator program for Seed to Series A startups based in MENA and Turkey.

The accelerator aims to connect the best of Google's products and people to empower startups to scale their business, towards success in the rapidly evolving landscape of AI and technology.

📰 What we’re reading

• Sami Tatar. The future of language learning

• Valia Khodr. Fashiontech series: Part I

• Timothy Motte. Lendo: crowd-lending in Saudi Arabia