Dossier

MENA: Tunisian startup ecosystem in the top 10 in terms of financing and innovation

The Tunisian startup ecosystem has achieved a significant milestone, securing a spot in the top 10 of the Middle East and North Africa (MENA) region in terms of startup funding and innovation through research and patent activities. This achievement is highlighted in the recently released “Global Startup Ecosystem Report 2023” (GSER 2023), a comprehensive analysis of worldwide startup ecosystems, trends, and challenges. The report, now in its 11th edition, draws on extensive research involving 3.5 million startups across 290 global ecosystems, spanning over a decade of independent research and providing valuable policy recommendations to more than 145 clients in over 50 countries.

In the context of Tunisia, the GSER 2023 reveals that the country made history in 2018 by becoming the first in Africa to enact a dedicated bill for startups. Since then, Tunisia has officially recognized over 650 startups and introduced initiatives such as a 100 million euros fund of funds and the Flywheel program, both aimed at supporting the flourishing ecosystem. Startup Tunisia, for instance, offers grants of up to 200,000 dinars ($63,000) to facilitate the launch of new startup support programs, while Air2 provides similar support to startups in the seed phase, assisting them in securing larger funding opportunities.

Furthermore, the report highlights significant financial investments in Tunisia’s startup scene. In 2022, the KfW Development Bank subscribed 20 million euros to the ANAVA fund, boosting its total to 60 million euros. ANAVA has subsequently invested in two prominent venture capital funds: 216 Capital Fund I, a seed fund supporting Tunisian technology startups managed by 216 Capital Venture, and Badia Impact Squared, a late-stage fund investing in startups from the MENA region and managed by Badia Silicon. Notably, Badia Impact Squared led a substantial $20 million fundraising round for Expensya, a Tunisian B2B expense management platform, in 2021.

The Tunisian government’s commitment to fostering innovation is further demonstrated by securing a $75 million loan from the ANAVA fund of funds, with $17 million allocated to the $43 million INNOVATECH fund launched in February 2022. Additionally, the government’s 2023-2025 development plan features green projects totaling €2.1 billion, including a groundbreaking green hydrogen initiative. In March 2023, a national green hydrogen roadmap was unveiled, marking a significant step toward sustainable energy solutions.

The ecosystem’s vibrancy is underscored by noteworthy deals, such as the acquisition of last-mile delivery startup Lamma by grocery delivery company Appetito for $12.5 million in June 2022, and Edtech GOMYCODE’s successful $8 million Series A funding round in the same month. These developments highlight Tunisia’s position as a rising star in the global startup landscape, driven by innovation, strategic investments, and a supportive policy framework.