Startups in the UAE continued to attract significant investor interest in the first half of 2025, securing a total of $541 million in capital, marking an 18 percent increase compared to the previous year. According to a recent report by Wamda, debt accounted for just 19 percent of the total deal volume in the UAE, indicating a healthier equity pipeline. Fintech led the sectoral breakdown, with $265.8 million raised across 35 deals. Insurtech followed closely with $55 million across five deals. Both Web3 and AI startups raised $44.7 million each, with Web3 funding distributed among 11 companies and AI funding among 13. The report also highlighted that eight female-led startups in the UAE secured $17.6 million in funding, while mixed-gender teams raised $91.7 million. Despite these figures, male-founded startups continued to dominate the capital landscape.
In the broader MENA region, startup funding reached $2.1 billion in the first half of 2025, with 334 deals recorded, reflecting a 134 percent increase compared to the same period in 2024. While this growth was partly driven by an uptick in debt-based financing, the numbers still indicate strong investor activity despite regional uncertainty. Saudi Arabia represented about 64 percent of the total capital deployed in MENA during the first half of the year, with investment volumes in the Kingdom increasing by 342 percent compared to H1 2024. This surge was driven by a policy-supported ecosystem and ongoing government intervention. The second quarter of 2025 saw $583.4 million deployed across 149 deals, surpassing both the value and deal count of Q2 2024. This performance marked a rebound, despite a weaker June, signaling investors’ continued interest in the region’s startup ecosystem.
Despite this growth, market conditions in the first half of 2025 remained challenging. Currency volatility, ongoing regional tensions, and fluctuations in global commodities—such as gold, oil, and the U.S. dollar—contributed to an uncertain environment. However, select venture capital firms remained active, deploying capital with cautious optimism.
Fintech emerged as the highest-funded sector in Saudi Arabia, attracting $170 million across 38 startups in Q2. Proptech followed with $77 million raised across eight transactions, while traveltech garnered $40 million from two deals. Saudi Arabia emerged as the top-funded market in the quarter, surpassing the UAE. The Kingdom saw $231.5 million invested in 38 startups, compared to $197.7 million across 52 deals in the UAE. Egypt ranked third, attracting $133 million across 30 deals.
The majority of funding in Saudi Arabia was concentrated in fintech, which raised $969 million across 20 transactions. Contech and proptech followed, securing $48 million and $39 million, respectively. The Saudi market benefitted from sovereign wealth funds backing local VC firms, as well as government incentives designed to attract international founders and technologies.
In the broader MENA region, total investment in H1 2025 reached $2.1 billion, a significant increase from $898 million in the same period in 2024. However, excluding debt-based transactions—which accounted for $930 million—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 seen as a signal of strategic interest in the region’s tech infrastructure and market potential.
Egypt saw a remarkable 106 percent year-on-year increase in funding volume, with $179 million raised across 52 deals. This growth comes amid continued macroeconomic challenges, with Egypt’s external debt reaching 38.8 percent of GDP by the end of 2024. Debt financing represented 13 percent of the total funding activity. Unlike Saudi Arabia and the UAE, Egypt’s most funded sector was proptech, which raised $75 million across three deals. Fintech followed closely with $85.3 million raised by 10 companies, while e-commerce startups secured $24.8 million across seven transactions.
In Egypt, female-founded ventures received $425,000 in total, while mixed-gender teams raised $23 million. The remainder of the funding went to 37 male-led companies.
