Middle East climate tech startups to be hot investment in 2023, but market still lags

Al-Monitor Pro Members

Samuel Wendel

Senior Market Research Analyst, Al-Monitor

Dec. 5, 2022

Despite rising venture funding for MENA’s startups in recent years, an area yet to generate broad interest from regional investors is climate tech — a label similar to cleantech that encompasses everything from carbon capture to electric airplanes. A handful of local startups — mostly focused on agricultural innovations — have received significant investments recently, but MENA’s climate tech space is nascent when compared to fintech or e-commerce. However, climate tech has been a bright spot in the United States, Europe and beyond in 2022. Amid a broader venture funding slowdown, climate tech startups raised a record $26.8 billion globally in the first half of 2022. The time looks ripe for MENA’s climate tech startups to boom too. Following Egypt’s COP27, climate issues are getting more exposure and the UAE’s upcoming COP28 should fuel momentum. There are positive signs too, like UAE solar power firm Yellow Door Energy announcing a $400 million equity raise in October 2022. That said, obstacles still complicate industry growth and MENA’s climate tech startups lag well behind markets like the United States when it comes to introducing new innovations such as carbon capture or electric vehicle charging infrastructure.