Startups in the UAE continued to attract substantial investor interest in the first half of 2025, securing $541 million in capital, an 18 percent increase from the previous year. A recent report by Wamda revealed that debt represented just 19 percent of total UAE deal volume, reflecting a relatively healthier equity pipeline.
Fintech led the sectoral breakdown with $265.8 million raised across 35 deals. Insurtech followed with $55 million across five deals. Web3 and AI startups each secured $44.7 million in funding — the former through 11 companies and the latter through 13.
The report also revealed that eight female-led startups in the UAE raised $17.6 million, while mixed-gender teams secured $91.7 million. Despite those figures, male-founded startups continued to dominate the capital landscape.
MENA startup funding hits $2.1 billion
Startup funding in the Middle East and North Africa reached $2.1 billion during the first half of 2025, with 334 deals recorded across the region, a 134 percent increase compared to the same period in 2024. While this growth was partially fuelled by an uptick in debt-based financing, the figures nonetheless reflect a notable level of investor activity amid continued regional uncertainty.
Saudi Arabia accounted for approximately 64 percent of total capital deployed in MENA during the first half of the year. Investment volumes in the Kingdom surged 342 percent compared to H1 2024, underpinned by a policy-driven ecosystem and consistent government intervention.
The second quarter concluded with $583.4 million deployed across 149 deals, exceeding Q2 2024 in both value and deal count. The performance marks a rebound despite a weaker June, underlining investors’ continued appetite for exposure to the region’s startup ecosystem.
Despite growth, market conditions remained challenging throughout the first half of the year. Currency volatility, ongoing regional tensions and fluctuations in global commodities — including gold, oil and the U.S. dollar — all contributed to a climate of uncertainty. However, select venture capital firms remained active, deploying capital with measured optimism.
Saudi Arabia regains top funding position
Fintech attracted the highest volume of capital in Q2, with 38 startups securing a combined $170 million. Proptech followed, raising $77 million across eight transactions, while traveltech recorded $40 million through two deals.
Saudi Arabia emerged as the most funded market in the quarter, displacing the UAE startup landscape. A total of $231.5 million was invested in 38 Saudi startups, compared to $197.7 million across 52 transactions in the UAE. Egypt ranked third, attracting $133 million via 30 deals.
The majority of funding activity in Saudi Arabia was concentrated in fintech, which raised $969 million across 20 transactions. Contech and proptech followed, attracting $48 million and $39 million, respectively. The Saudi market benefited from sovereign wealth funds backing local VC firms, alongside government incentives designed to attract international founders and technologies.
In the MENA region, total investment in H1 2025 reached $2.1 billion, a significant increase from $898 million in H1 2024. However, when excluding debt-based transactions, which accounted for $930 million, the year-on-year growth narrows to 53 percent.
“This expansion coincided with renewed global attention on the region following the visit of U.S. President Donald Trump, accompanied by a delegation of major Silicon Valley investors. The visit was widely interpreted as a signal of strategic interest in the region’s tech infrastructure and market potential,” said the report.
Read: Fitch affirms Saudi Arabia’s rating at A+ with stable outlook
Egypt’s funding volume surges 106 percent
Egypt registered a 106 percent year-on-year increase in funding volume, with $179 million raised across 52 deals. The uptick comes amid ongoing macroeconomic stress, with Egypt’s external debt reaching 38.8 percent of GDP by the end of 2024. Debt financing accounted for 13 percent of the funding activity.
Unlike Saudi Arabia and the UAE, Egypt’s most funded sector was proptech, which received $75 million through three transactions. Fintech followed with $85.3 million raised by 10 companies, while e-commerce startups secured $24.8 million across seven deals.
Female-founded ventures in Egypt received $425,000 in total, while mixed-gender teams secured $23 million. The remainder of the funding went to 37 male-led companies.
