Startup Wrap: Saudi Arabia leads MENA startup funding in H1 with $1.34 billion raised

Arab News

6 days ago

RIYADH: Saudi Arabia emerged as the Middle East and North Africa's top-funded startup market in the first half of 2025, securing approximately 64 percent of the region's total capital.
Investments in the Kingdom surged to $1.34 billion, representing a 342 percent increase compared to the same period in 2024, according to a report by Wamda and Digital Digest.
This performance, supported by sovereign wealth backing, targeted government incentives, and strong domestic venture activity, solidified Saudi Arabia's dominance amid a broader regional funding rebound.
The Kingdom's fintech sector accounted for the bulk of capital, raising $969 million across 20 transactions.
Construction tech and property tech followed with $48 million and $39 million, respectively.
Activity was led by local firms such as STV, Wa'ed Ventures, and Raed Ventures, with international participation also emerging — most notably JPMorgan's involvement in a debt round raised by Saudi fintech Lendo.
Across the broader region, MENA startups raised $2.1 billion through 334 deals in the first half of 2025, up 134 percent from the same period in 2024.
Debt financing played a critical role in this growth, contributing $930 million — about 44 percent of the total.
Excluding debt, the year-on-year growth stood at 53 percent, indicating improved but more tempered equity market conditions.
The second quarter closed with $583.4 million invested across 149 deals, outperforming the same period of 2024 despite a slower June.
Fintech remained the region's top-funded sector, securing $170 million in the second quarter, followed by property tech with $77 million and travel tech with $40 million.
The UAE recorded $541 million in investments across 114 deals in the first half, reflecting an 18 percent increase over the previous year.
Fintech led with $265.8 million, followed by insurance tech with $55 million, and Web3 and AI with $44.7 million each.
Debt made up 19 percent of total UAE deal volume, suggesting a comparatively robust equity environment.
Eight female-led startups in the UAE raised $17.6 million, while mixed-gender teams attracted $91.7 million.
In Egypt, startup funding climbed 106 percent to reach $179 million across 52 deals, despite sustained macroeconomic pressure and rising external debt.
Property tech led with $75 million, followed by fintech with $85.3 million and e-commerce with $24.8 million.
Female-founded startups raised $425,000, while mixed-gender teams secured $23 million.
Mid-stage investments dominated by capital volume, with $161 million allocated across 10 Series A rounds in the second quarter.
However, early-stage startups — defined as pre-seed to Series A — continued to account for the majority of transactions, capturing $568 million in the first half. Later-stage companies secured $431.7 million.
Fintech sustained its leadership across MENA in the first half, attracting 62 percent of total capital through 77 deals.
Venture studios ranked second, driven by a major investment in iMena Group, while property tech came third with $119 million raised across 16 startups.
Business-to-business models accounted for 70 percent of total first half funding, securing $1.5 billion across 197 transactions. Business-to-consumer and hybrid models attracted the remainder.
Despite record-breaking funding levels, gender disparities persisted. Startups led solely by men received nearly 89 percent of first half capital.
Female-founded ventures raised $84.5 million across 27 deals, while mixed-gender teams garnered $150 million through 48 deals.
ZabonEx raises $100k to optimize food supply chains in Oman
Oman-based predictive analytics startup ZabonEx has raised $100,000 in pre-seed funding, led by Future Fund Oman and ITHCA Group.
Founded in 2023 by Hatim Moosa and Almuhannad Al-Balushi, ZabonEx offers a B2B Software-as-a-Service platform that delivers real-time, customer-level demand forecasting for the food and beverage sector.
The funding will support enhancements to ZabonEx's predictive engine, the expansion of its tech team, and the development of strategic partnerships within Oman's food supply chain.
The startup is also building onboarding tools tailored to the local market as it prepares for regional expansion.
Qlub raises $30m to drive international growth
UAE-based fintech Qlub has raised $30 million in a new funding round to support its global expansion efforts.
The round was co-led by Shorooq Partners and Cherry Ventures, with participation from e&, Mubadala Investments, and Legend Capital.
Qlub, founded in 2021 by Eyad Al-Kassar and Mahmoud Fouz, offers a contactless dining payment platform allowing diners to view menus, order, and pay via smartphone.
The new funds will be used to expand into additional markets, enhance analytics capabilities, and improve integration with hospitality systems.
According to the company, clients have reported 300 percent more tips, 80 percent faster checkouts, and substantial labor cost savings.
Lime launches in Egypt to address education finance needs
Lime Consumer Finance, a subsidiary of First Abu Dhabi Bank Group, has launched operations in Egypt with a focus on education financing.
Licensed by the Financial Regulatory Authority, Lime aims to provide accessible and transparent financial solutions for Egyptian families.
The platform supports payments across a network of nurseries, schools, and universities and offers installment plans of up to 12 months for amounts up to 1 million Egyptian pounds.
With over 30 percent of Egypt's population under 15, the company positions education as a strategic entry point for broader financial services.
Flend secures $3m to bridge SME funding gap in Egypt
Egyptian fintech Flend has raised $3 million in seed funding through a mix of equity and debt.
The equity round was led by Egypt Ventures, with participation from Camel Ventures, Sukna Ventures, Plus VC, Banque Misr, and prominent family offices. Debt financing was provided by MSMEDA and local banks.
Founded by Ahmed Zaki, Nehal Helmy, and Saif Edeen El-Bendari, Flend provides fully digital short-term working capital loans to SMEs, with direct integration into over 20 supply chain platforms.
The company plans to deploy 1 billion Egyptian pounds in loans over the next year while expanding its team, partnerships, and technical infrastructure.
Journify doubles valuation following strategic investment
UAE-based Journify has secured new strategic investment from Shorooq Partners, Bunat Ventures, and Plug and Play, doubling its valuation and achieving fivefold revenue growth within six months.
The startup was founded in 2023 by Taoufik El-Jamali, Amine Chouki, and Omar Al-Shoubaki.
Journify provides an AI-powered data activation platform that helps Gulf Cooperation Council brands leverage first-party data across major ad platforms.
The company plans to use the funding to advance its AI roadmap, scale hiring across key departments, and expand further into the GCC market.
SafaQat secures investment to advance AI-driven procurement in Oman
Oman-based digital procurement platform SafaQat has received funding from the Oman Future Fund and Idrak Group.
Founded in 2020 by four brothers, the startup digitises the tendering process and is supported by the SME Development Authority.
SafaQat intends to enhance its AI infrastructure, improve the user experience, and expand into government procurement and new markets with the latest investment.