MENA startup funding surges in 2025 with new hubs and shifting sectors

In 2025, the startup funding scene across the Middle East and North Africa (MENA) has really taken a remarkable turn. Early figures for the year already outpace the total investments made throughout all of 2024. It’s quite a significant shift—moving from cautious optimism to more ambitious, action-oriented investing. This trend seems to mirror broader changes in the regional economy and the evolving venture capital landscape across MENA.

July 2025, in particular, was a standout month, with funding reaching an impressive $783 million. That’s an astonishing leap of about 1,411% compared to June, and it’s more than double what was raised in July of the previous year. A large chunk of this money went into just a few major deals. This pattern underlines the ongoing dominance of Saudi Arabia and the UAE in this space, but it also hints at growing importance for emerging markets like Iraq and Morocco.

Saudi Arabia continued to reinforce its role as the heavyweight in the MENA startup ecosystem, pulling in about $396.5 million across 16 deals. The biggest among them was a $250 million round for the quick-commerce platform Ninja, which successfully reached unicorn status. That one deal alone made up a huge part of July’s total funding, showing how concentrated capital is within the kingdom’s startup scene. Earlier in the year, Saudi’s leadership was again evident; in April, it grabbed $158.5 million, which accounted for more than two-thirds of the entire regional funding that month. So, in the first half of 2025, Saudi startups have amassed over $1.35 billion—mainly driven by fintech companies. This clearly points to the deepening VC infrastructure there and growing investor confidence.

Meanwhile, the UAE also had a very strong showing, with $359 million invested during July, spread across 22 startups. The star deal was a $250 million Series A investment in deep-tech startup XPANCEO, which took it to unicorn status. This indicates a shift—investors are showing more appetite for companies heavy on intellectual property, rather than sticking solely to fintech. UAE startups have been consistently strong earlier this year, too, with sizeable funding rounds that underscore the country’s key role in regional VC flows.

Together, Saudi Arabia and the UAE made up over 90% of what was invested in July, their big deals driven by extensive investor networks, attractive policies, and the ability to draw both local and international capital. However, their dominance isn’t unquestioned—new hubs within MENA are rising. For example, Iraq’s InstaBank raised about $15 million, and Morocco’s Ora Technologies secured roughly $7.5 million. Morocco’s leap to fourth place in the funding rankings—overtaking Egypt—signals its growing appeal as a tech hub. It’s a marked change from the typical hierarchy, where Egypt used to be a top-three destination for investment. In July, Egypt only managed to bring in around $4 million across seven startups, placing it fifth.

The distribution of funding across sectors is also changing. For the first time in months, deep-tech startups actually outperformed fintech in funding volume—collecting $250.3 million across just four deals. E-commerce, buoyed by Ninja’s high-profile deal, matched this figure. Meanwhile, SaaS startups attracted around $88.9 million, and fintech—once the dominant sector—dropped to about $61 million. These shifts suggest that investors are increasingly interested in backing scalable, innovation-heavy tech and consumer platforms, rather than sticking to traditional financial services. It’s pretty interesting, right? This trend aligns with global patterns favoring innovative startups that can really scale.

When it comes to the types of companies attracting investment, consumer-focused companies led in July, bringing in around $534 million—more than double the $202.4 million invested in B2B ventures. This marks a reversal from earlier in the year, when enterprise solutions were more popular. The funding stages also varied, with three big Series A rounds totaling $267 million, and later-stage deals adding up to about $158 million. Early-stage startups, meanwhile, only raised about $36 million across 26 deals—showing a clear investor preference for more mature companies. Debt financing remained minimal, too, which is typical of the region’s current funding approach—more equity, less debt.

Despite all this positivity, the gender gap in investment remains stark. Male-led startups secured nearly $774.5 million across 43 deals—making up almost 99% of all funding. In contrast, ventures led by mixed-gender teams or female founders together raised less than $9 million. Honestly, that disparity underscores ongoing challenges around equitable access to capital in the region’s fast-growing startup ecosystem. It’s surprising, perhaps, but inclusive funding practices seem to be lagging behind the rapid financial growth.

Another interesting aspect is the regional scope—beyond MENA itself, investments from Saudi Arabia’s Public Investment Fund and Abu Dhabi’s MGX, along with Indian corporate players, are seen as potential backers in huge multi-billion-dollar funding rounds for global AI research organizations like OpenAI. These moves reveal the Gulf’s increasing ambition to lead in cutting-edge tech investments, positioning their capital markets closer to the global innovation stage.

Looking forward, the outlook for MENA’s startup funding in 2025 appears quite positive. The heavyweights—Saudi Arabia and the UAE—still lead the way, but the rising prominence of emerging markets such as Iraq and Morocco adds a fresh dynamic. Sectors like deep-tech and consumer platforms are gaining favor, reflecting evolving investor strategies aimed at broad-market impact.

That said, to truly build a vibrant, diverse startup ecosystem, it’ll be crucial to tackle the existing gaps—particularly deal concentration and gender representation. Whether regional investors can extend more support to a wider range of founders and startups remains to be seen. The upcoming months will be pivotal, as MENA tries not only to stay competitive but also to foster a more inclusive, innovative environment—one where growth isn’t limited to a few dominant hubs.

Source: Noah Wire Services