Why Are Mega Deals Drying Up in MENA Fintech?

As the global fintech community gathers in Dubai for the highly anticipated DIFC Fintech Summit, MAGNiTT has just dropped a major report giving us a deep dive into the state of fintech venture capital across Emerging Venture Markets (EVMs). And there’s plenty to unpack.

Despite a general cooling in the global venture capital scene, fintech hasn’t lost its shine. According to MAGNiTT’s FY 2024 EVM Fintech Report, the sector continues to lead the charge across the Middle East, Africa, and Southeast Asia. In 2024, fintech startups raised a staggering US$3.9 billion across 335 deals, maintaining a clear lead over every other sector — even though total funding dipped 8 percent and deal count dropped 18 percent compared to the previous year.

But here’s what’s really exciting: Q1 2025 alone has already seen US$372 million raised from 42 fintech deals in MENA — more than half of the total capital raised in the region in all of 2024. MAGNiTT’s CEO, Philip Bahoshy, is optimistic: “Fintech remains the industry of choice for investors across all Emerging Venture Markets,” he says, highlighting the growing involvement of regulators, banks, corporates, and investors in transforming financial services.

Key regulatory bodies like SAMA and the CMA in Saudi Arabia, as well as ADGM and DFSA in the UAE, have played a central role in driving this growth. Events like the DIFC Fintech Summit and the upcoming Money 2020 are not just meet ups — they’re becoming crucial catalysts for innovation and investor attention in the region.

What’s Changing in MENA?

While overall funding in MENA fell by nearly 50 percent year-on-year in 2024, that’s mostly because mega deals (those blockbuster US$100M+ rounds) have become rare. In fact, MEGA deal volume plunged from US$850 million in 2023 to just US$158 million in 2024. The silver lining? We’re seeing a more diverse spread of investments in Series A and B rounds — a clear sign that investors are focusing on scaling promising startups rather than just big-ticket bets.

Some notable names that secured funding at this stage include Lean Technologies, Yuze Digital, Klickl, and Paymob — all of whom are pushing the envelope in digital finance and infrastructure.

Country Highlights: Egypt, Saudi Arabia, UAE

In terms of capital raised, Egypt took the lead, thanks largely to a single major deal — Halan’s US$158 million round — bringing the country’s total to US$241 million for 2024. Saudi Arabia and the UAE followed with US$191 million and US$186 million, respectively.

But when it comes to deal activity, the UAE stood out with 46 deals, compared to Saudi Arabia’s 35 and Egypt’s 19. Government-backed initiatives like LEAP, SVC’s Fund of Funds, and Vision 2030, as well as monetary policies like interest rate cuts, continue to make the region fertile ground for fintech innovation.

Where’s the Money Going?

Payment solutions are still a magnet for funding, attracting US$196 million, despite a significant 74 percent drop from last year. Clearly, investors still believe in the long game for payments. Neobanking came in next, even with a 35 percent dip in capital.

Interestingly, we’re starting to see some real momentum in other fintech sub-sectors. Banking infrastructure startups saw funding surge by 163 percent, pulling in US$99 million. Cryptocurrency ventures were up 80 percent, landing US$36 million, and lending platforms grew a whopping 201 percent, raising US$34 million. It’s a strong signal that investor interest is broadening beyond the usual suspects.

Who’s Investing?

Local investors are doing the heavy lifting when it comes to deal volume — 70 percent of MENA fintech deals in 2024 were backed by players like Dubai Future District Fund, Flat6Labs, and OQAL Angel Investors.

But when we follow the big money trail, it’s the international investors making the boldest moves. The International Finance Corporation (IFC) led the way with US$40 million deployed, while Kenya’s Osten Investments followed closely with US$30 million.

Despite a tough year for global VC, fintech in emerging markets—and especially in MENA — is proving its resilience. With strong regulatory support, a maturing startup ecosystem, and growing global attention, the sector is poised for a bigger and bolder 2025. As the DIFC Fintech Summit kicks off, all eyes will be on how this dynamic sector continues to evolve and attract capital across borders.