The startup ecosystem in MENA experienced renewed momentum in May 2025, securing a total of US$289 million across 44 deals.
This reflects a 25% increase compared to April and a modest 2% rise year-on-year. Debt financing accounted for only 9% of the total investment, with the bulk of capital directed towards equity deals.
Egypt regained its position as the region’s leading recipient of funding, largely thanks to Nawy’s notable US$75 million round.
According to Wamda, seven other Egyptian startups collectively raised US$50 million, marking activity levels not seen since July of the previous year.
The UAE followed with US$86.7 million raised across 14 deals, while Saudi Arabia trailed closely behind with US$69 million from 15 deals.
Meanwhile, Kuwait made a rare appearance on the investment radar, with two startups securing a combined US$6 million, positioning the often-overlooked GCC nation in fourth place.
AI remained a hot topic in the Gulf, especially following a high-profile visit by US President Trump and prominent Silicon Valley AI executives.
The diplomatic event prompted both Saudi Arabia and the UAE to announce major plans to enhance their local AI ecosystems.
However, despite the political attention and media excitement, investment in AI startups fell short of expectations.
The sector drew only US$25 million across two deals, underscoring the disconnect between the narrative and actual funding activity.
Fintech continued to lead in sectoral funding, attracting US$86.5 million through 14 rounds.
Proptech followed closely, buoyed by Nawy’s large raise, while mediatech companies brought in a total of US$32 million from two deals.
Construction technology also made a notable contribution, with WakeCap raising US$28 million.
There was a marked absence of late-stage funding activity in May.
Just one pre-Series C round was recorded, amounting to US$12 million.
Early-stage investments dominated, accounting for US$161 million of the total capital raised.
Investor preference continued to lean towards business-to-business (B2B) models.
B2B startups attracted US$157 million across 29 deals, while hybrid B2B/B2C companies brought in US$79 million.
In contrast, business-to-consumer (B2C) startups received significantly less attention, with nine companies raising a combined US$53 million.
The gender gap in startup funding remained pronounced. Startups founded exclusively by men secured 82% of the total capital.
Female-founded ventures garnered just 7%, while teams comprising both male and female founders attracted nearly 11%.
Featured image credit: Edited by Fintech News Middle East, based on image by Freepik
