MENA Startups Break Records in 2025 with $7.5 Billion in Funding

At the heart of the surge was a remarkably active second half of the year. Wamda’s report shows that while startups raised $2 billion in the first six months, more than $5.7 billion flowed into ventures between July and December, underlining how investor confidence picked up pace as the year progressed. The disparity in capital deployment underscores how mega‑deals have reshaped the funding landscape. A handful of high‑value financings, including rounds involving companies such as XPANCEO, Ninja, Tabby, Lendo, and Property Finder, collectively accounted for a significant share of total investment.

Industry veterans say this mirrors global patterns: when investor risk appetites rise modestly in one part of the market, capital tends to cluster into larger, later‑stage deals first. But unlike other regions, MENA saw robust activity even at the early stages, underlining the depth of founder talent across verticals.

For the first time in recent memory, Saudi Arabia clearly dominated the funding leaderboard. Startups in the Kingdom raised approximately $5 billion across 211 deals, far exceeding investment levels in peers like the United Arab Emirates and Egypt. The UAE nonetheless remains a powerhouse, with around $2 billion raised across 218 deals, while Egypt, often hamstrung by broader macroeconomic challenges such as inflation and debt pressures, still attracted capital to the tune of roughly $263 million across 89 transactions.

Emerging ecosystems such as Morocco also showed resilience, with 23 startups raising nearly $38 million, while smaller markets like Iraq, Kuwait, and Tunisia recorded modest but noteworthy investment activity. What stands out in the regional breakdown is not only the scale of capital assigned but also its strategic distribution across markets of differing maturity levels, a dynamic indicating both spill‑over growth from the Gulf and increasing confidence in nascent tech hubs.

Across the region, fintech continued its dominance, capturing a disproportionate share of investor attention and capital. Wamda’s data show that fintech accounted for 58% of total funding in 2025, with its share rising sharply compared to previous years. This isn’t surprising: digital payments, embedded finance, lending platforms, and insurance tech are not only revenue generators but are also central to broader digital transformation strategies in finance sectors across the Middle East.

The same catalysts that fuel fintech growth, regulatory modernization, increase in digital banking penetration, and a growing preference for digital financial services, have sustained investor interest despite broader economic headwinds. Beyond fintech, investment flows spread into proptech, e‑commerce, SaaS (software as a service), and enterprise tech, signaling a maturing ecosystem that’s beginning to look beyond a single vertical for future growth.

While fintech dominated, the nature of funding and business models revealed deeper patterns. Wamda’s analysis shows business‑to‑business startups collectively raised $2.8 billion across 383 deals, outpacing business‑to‑consumer ventures both in deal count and total capital. This suggests that investors are increasingly betting on scalable enterprise solutions that promise repeatable revenue and stickier customer engagements.

Another notable shift in the funding mix was the continued use of debt financing, which, while not solely responsible for the growth, played a meaningful role in enabling companies to access capital without diluting founder equity. Equity‑only investments saw dramatic growth as well, with overall equity funding rising 77% year‑over‑year even when debt is excluded.

Despite the overall growth narrative, the data reflect an ongoing imbalance in funding allocation. Male‑led startups continued to secure the lion’s share of capital, while female‑founded and mixed‑gender teams accounted for a disproportionately smaller fraction of investment activity. This pattern mirrors a global issue, but in MENA, where startup ecosystems are still crystallizing, the implications could be even more profound if structural barriers to diverse founder participation are not addressed.

The backdrop for this dramatic surge is an economy facing a range of headwinds. Despite these challenges, venture capital flows tell a different story about the agility and attractiveness of digital and tech‑enabled businesses. Startups, particularly those rooted in financial innovation, digital services, and scalable enterprise solutions, have become a bright spot in a complex economic landscape.

With capital continuing to flow and startups scaling, 2025 may prove to be more than a singular outlier, it could mark the inflection point for the MENA startup ecosystem’s evolution into a globally recognized innovation hub. Sustaining this momentum will require more than capital alone. Policy support, ecosystem infrastructure, and inclusive access to funding, particularly for underrepresented founders, are essential to ensure the region’s entrepreneurial renaissance is not just momentary but foundational.