- MENA led emerging-market venture growth in 2025, raising $3.80B across 688 deals (+74% funding, +6% deals).
- Africa’s VC rose to $3.24B (+44.6%) but deal volume fell and exits remain thin.
- Fintech stayed dominant in both regions, while MENA’s AI funding surged to $302M in H1 2025, already above prior-year totals.
- MENA’s rebound was reinforced by regulatory reforms, sovereign-backed programs, and mega-rounds, while Africa’s key constraint is translating funding into broader early-stage flow and liquidity.
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The MAGNiTT report shows that MENA emerged as the fastest-growing emerging venture capital market in 2025, with funding reaching $3.80 billion across 688 deals – a 74% increase in funding vs. 2024, and a modest 6% rise in deal count. By contrast, Africa saw a 44.6% increase in funding ($3.24 billion) but a drop in deal volume.
The divergence highlights a key pattern: in MENA, growth is more evenly distributed across stages, including early- and late-stage deals, driven by mega-rounds and robust policy, while in Africa the growth appears more concentrated at larger exits or more mature companies, with early-stage deal flow weakening.
Fintech remains the backbone of both ecosystems. In MENA, it captured over $1.15 billion across 178 deals in 2025, and emerged as the leading sector driving magnitude as well as deal count. AI startups in MENA raised $302 million in H1 2025, already exceeding full-year totals for some previous years. Africa is building foundational layers: more data protection regimes, investments in infrastructure, and adoption rather than product innovation.
Key enablers in MENA include regulatory reform (e.g. foreign currency and legal frameworks), sovereign capital and government programmes (e.g. Saudi’s Vision 2030), and large-scale mega-rounds (e.g. Ninja, XPANCEO at $250 million each) that enhance visibility and investor confidence. Africa faces policy and market gaps: difficulties around startup classification, regulatory uncertainty in foreign currency management, and less exit activity, constraining recycling of capital.
Strategic implications: Investors seeking emerging markets should increasingly focus on MENA for both magnitude and deal flow; execution risk lies in sustaining early-stage ecosystems, managing macroeconomic and policy risk in both regions. For African startups, scaling legal and financial infrastructure and enabling exits are critical. For governments, balancing sovereign capital deployment with private-sector development remains essential.
Open questions include: Will Africa reverse its deal-volume decline and improve exit liquidity? How sustainable are the mega-rounds as driver of perceived ecosystem health in MENA? What impact will global macro headwinds (e.g. interest rates, foreign exchange volatility) have on these trends?
Supporting Notes
- MENA raised $3.80 billion across 688 deals in 2025, up 74% year-over-year; deal volume rose 6% in the same period.
- Africa’s startup funding rose to $3.24 billion by end-2025, a 44.6% year-over-year increase, but saw a decrease in deal count.
- Fintech in MENA drew over $1.15 billion across 178 deals in 2025; AI startups raised $302 million in H1 2025, already exceeding the previous full year’s AI funding.
- Saudi Arabia alone raised $860 million in H1 2025 via 114 deals, making up 56% of all VC funding in MENA for that period.
- M&A activity in MENA rose by 41% year-on-year in 2025, with exits growing especially in the UAE; while EVMs overall saw exits decline except in MENA and Africa.
- Policy reforms in Egypt, Tunisia, Morocco – including currency float in Egypt, legal startup definitions, foreign exchange reforms in Tunisia, and tax incentives in Morocco – have played a role in attracting capital.
- In Africa, debt financing rose significantly, fintech and cleantech led sectoral gains; early-stage deals dominate but growth-stage deal volume declined.