- Middle East VC funding rebounded in 2025 to about US$3.8B across 688 deals (+74% YoY), led by Saudi Arabia and the UAE.
- Cross-border participation hit a record, with roughly half of capital coming from international investors.
- Fintech drew the most funding (~US$1.15B across ~178 deals), while H1 2025 MENA totals reached ~US$2.1B and included significant debt financing.
- Early-stage rounds still dominate volume, but more Series A/B and mega-rounds signal a maturing ecosystem anchored by government and sovereign capital.
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The Middle East’s venture capital ecosystem made a strong rebound in 2025 after a down year in 2024. Total funding has surged, driven by large round-sizes, foreign investor inflows, and dominance by Gulf markets—especially Saudi Arabia and the UAE. Across the region, large, high-conviction bets (mega-rounds over US$100 million) like those in Ninja, Tabby, and Xpanceo are pulling up averages, while early-stage deal flow remains healthy.
Saudi Arabia in particular has emerged as a powerhouse. In H1 2025 it raised about US$860 million across 114 deals—a 116% year-on-year jump—led by mega-rounds and supported by government-led programs and sovereign capital. The UAE improved similarly, both in value (~US$447 million in H1) and deal count.
Notably, international investor participation hit record levels in 9 months, with over 50% of investment in Saudi VC coming from non-Saudi firms. M&A activity and exit rails are maturing, although IPO activity has cooled.
Some open questions and risks remain: how sustainable the mega-deal dependence is; whether other markets (outside Gulf) can revive under macroeconomic stress; how regulatory and valuation pressures will affect future rounds; and when IPOs will re-emerge as meaningful exit paths.
Strategically, venture capitalists and LPs should pay close attention to: structuring cross-border deals, participating alongside sovereign wealth funds, supporting mid-stage deal pipelines in Saudi/UAE, and watching for policy/regulation shifts that may enable or restrain exits via IPO or M&A.
Supporting Notes
- According to Magnitt via Bloomberg, Middle East VC funding reached ~US$3.8 billion across 688 deals in 2025, up 74% YoY.
- International investors supplied nearly half of that capital, representing a record in cross-border participation.
- Fintech was the most active sector: ~US$1.15 billion across ~178 deals.
- Saudi Arabia accounted for US$860 million from 114 deals in H1 2025, up 116% YoY; UAE raised US$447 million across 114 deals.
- MENA VC funding in H1 2025 reached US$2.1 billion across 334 deals, a 134% increase YoY. Debt rounds comprised about US$930 million of that amount.
- Early-stage rounds (pre-seed to seed) continued to dominate deal count; but Series A and B rounds with higher values grew significantly—42% of A/B rounds exceeded US$20 million, up from 10% last year.
- Non-mega deal funding also rose strongly in Saudi Arabia (67% YoY excluding rounds >US$100 million), showing broadening of the base.
- Noteworthy exits and M&A activity in 2025 increased ~41% YoY in the Middle East, suggesting exit momentum is building.