Saudi, UAE Fuel MENA’s 74 percent VC Growth

Last year turned out to be a defining one for startups in Saudi Arabia and the UAE. Together, the two countries led venture capital activity across the Middle East and North Africa, pulling in US$3.13 billion in investments, according to data platform MAGNiTT.

To put that into perspective, Saudi Arabia and the UAE accounted for 91 percent of all the capital deployed in the MENA region. Overall, startups across MENA raised US$3.8 billion, marking a 74 percent increase compared to 2024. The region also saw more activity, with 688 deals closed during the year, up 6 percent from the previous period.

Saudi Arabia topped the funding table, attracting US$1.72 billion. That figure represents a sharp 145 percent rise year-on-year, showing how quickly the Kingdom’s startup ecosystem is maturing. The UAE followed closely with US$1.41 billion in funding, an 84 percent increase from the year before.

One of the main reasons behind the surge was the return of large funding rounds. Mega-deals, defined as investments above US$100 million, made a strong comeback. Startups such as Tamara, Tabby and Ninja raised sizeable rounds that helped push overall numbers higher. These large transactions also signaled renewed confidence from investors after a period of caution in global markets.

Another notable shift was the growing presence of international investors in the region. Firms such as Blackstone and General Atlantic were among those backing MENA startups, and foreign investors contributed nearly half, or 48 percent, of the total capital deployed. For local founders and SMEs, this reflects increasing global interest in businesses built out of the Gulf.

Sector-wise, fintech continued to dominate funding activity. Startups in the space raised US$1.15 billion, up 32 percent from the previous year, as digital payments, lending platforms and financial infrastructure solutions remain in demand. Artificial intelligence followed closely, attracting US$0.82 billion and tripling its funding compared to a year earlier.

For SMEs and founders in the region, the numbers point to a market that is gradually regaining momentum. While funding remains selective, Saudi Arabia and the UAE are clearly positioning themselves as the core hubs for startup growth and investment across MENA.