UAE, Saudi reinforce startup funding dominance as Mena surges past 2024 totals

29/08/2025 01:54 AST

The Middle East and North Africa's startup ecosystem is in the midst of a record-breaking year, with the UAE and Saudi Arabia firmly at the centre of the action.

In just seven months of 2025, total funding has already surpassed the entire haul of 2024, underlining how these two Gulf economies have become magnets for venture capital and entrepreneurial talent.

According to Wamda's latest monthly report, funding across Mena reached $783 million in July alone, spread across 57 deals - a 1,411 per cent increase from June and more than double the total of July 2024.

The first half of 2025 closed with $2.1 billion in funding, representing a 134 per cent rise year-on-year. The surge was propelled by blockbuster rounds in Saudi Arabia and the UAE that minted two new unicorns within a single month, underscoring sustained investor appetite for high-growth, later-stage opportunities.

Saudi Arabia led July's activity with $396.5 million secured across 16 deals, fuelled by three standout transactions. Quick-commerce giant Ninja attracted $250 million in a Series A led by Riyad Capital, immediately pushing it into unicorn territory.

Foodtech player Calo raised $39 million in a Series B extension, while SaaS provider Lucidya secured $30 million.

The UAE was close behind with $359 million raised across 22 startups, anchored by XPANCEO's $250 million round that also elevated the deeptech firm into unicorn ranks.

These two mega deals alone accounted for 56 per cent of total capital deployed in July, reflecting the concentration of investor focus but also the scale of opportunities that Saudi Arabia and the UAE can now generate.

As one venture capitalist observed, "The centre of gravity in Mena has decisively shifted to Riyadh and Dubai. These hubs not only attract the biggest rounds but also offer the regulatory, financial, and talent ecosystems needed to scale globally."

Emerging ecosystems also made their mark. Iraq captured third place with InstaBank's $15 million raise, while Morocco took fourth after Ora Technologies secured $7.5 million. Egypt, once a perennial top-three market, slipped to fifth with just $4 million spread across seven startups, reflecting the toll of macroeconomic pressures and currency instability.

Sectorally, the month marked a turning point. Deeptech overtook fintech for the first time in several months, raising $250.3 million across four deals.

E-commerce matched that figure, thanks largely to Ninja's raise, while SaaS startups attracted nearly $89 million. Fintech, long the darling of MENA investors, slipped to fourth with $61 million.

"The shift reflects a growing appetite for IP-heavy, innovation-led ventures and scalable consumer platforms," the Wamda report noted. Notably, consumer-focused startups outpaced enterprise ventures in July, reversing a trend from earlier this year. B2C firms captured $534 million, compared with $202 million for B2B startups.

This suggests investors are once again leaning toward brands with direct mass-market appeal, underlining the region's youthful demographics and expanding digital consumer base. The momentum is also underpinned by supportive government visions.

Saudi Arabia's Vision 2030 and the UAE's push to become a global tech hub are not just policy slogans but active enablers, offering regulatory reforms, capital pools, accelerators, and state-backed funds. Riyadh's Public Investment Fund (PIF) has emerged as one of the world's most powerful backers of innovation, while Abu Dhabi's ADQ and Mubadala continue to channel billions into tech and venture assets.

These sovereign anchors provide stability and confidence in an uncertain global investment climate. Analysts stress that the July surge is not a one-off but part of a broader trend. Global investors, wary of overexposure to North America, Europe, and China, are increasingly diversifying into Mena, where the growth story is robust and underpenetrated.

As PwC noted recently, the Middle East is "transitioning from being a frontier innovation economy to a core destination for venture capital flows."

The IMF has also highlighted that Saudi Arabia and the UAE are spearheading non-oil diversification, with the startup ecosystem playing a central role in future GDP growth.

Funding is heavily concentrated in a small number of mega-deals, leaving many early-stage startups struggling to secure backing.

Gender disparities are also glaring: male-led ventures raised nearly 99 per cent of July's total, while female-led startups attracted just $3 million across eight deals. Investors acknowledge this imbalance but argue that more targeted accelerators and women-focused funds are needed to close the gap.

Despite these gaps, the trajectory is unmistakable. With five months left in 2025, MENA's startup funding is already ahead of last year's tally. Saudi Arabia and the UAE are not only maintaining their primacy but also setting benchmarks for scale, ambition, and innovation.

The creation of two unicorns in one month reflects a maturity that was once thought years away. For entrepreneurs, the message is clear: if you want to build a billion-dollar company in the Middle East, Riyadh and Dubai are where the future is being written.

As Fouad Bekkar, founder of UAE-based Coraly.ai, which recently raised $2 million in pre-seed funding, put it: "This is just the beginning. The infrastructure, capital, and ambition now align in ways that will make the region one of the world's fastest-growing innovation centres."

The next challenge is to sustain momentum, spread capital more evenly across geographies and sectors, and ensure inclusion. But for now, the dominance of Saudi Arabia and the UAE in startup funding is unambiguous - and it is reshaping the innovation map of the wider region.

Khaleej Times