UAE Tops MENA Startup Funding at $104.4M, Despite March Slump
The United Arab Emirates (UAE) has emerged as the top-funded startup ecosystem in the Middle East and North Africa (MENA) region, raising a staggering $104.4 million. This impressive figure was driven by fintech and healthtech sectors, which raised $82.5 million and $16 million respectively.
However, March 2025 saw a significant drop in startup investments across the MENA region. Total funding plummeted by 76% to $127.5 million across 28 deals. The U.S trade war against global trade partners was cited as the primary reason for this decline, impacting key countries in the region.
Despite the downturn, the MENA region experienced a 244% surge in venture capital funding in the first quarter of 2025 compared to the same period in 2024. Saudi Arabia and the UAE led this growth, excluding investments in the USA and Web3 startups. Later-stage startups raised $46 million, accounting for 36% of total investment, while early-stage startups attracted 70% of the total funding.
Notably, business-to-business (B2B) models received strong preference, with 16 startups raising $97 million. Egypt came second in funding, with four startups raising a total of $11.6 million, while Saudi Arabia placed third with five startups raising $8 million.
While the MENA region's startup ecosystem has shown remarkable growth, the recent decline in funding serves as a reminder of the global economic uncertainties. Despite this setback, the region's potential remains evident, with fintech and healthtech leading the way. As the ecosystem continues to evolve, investors' preferences for later-stage and B2B startups suggest a maturing market.
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