The total volume of MENA funding fell to US$941 million in the first quarter of 2026, dropping 37% year-on-year as escalating geopolitical tensions weighed on investor sentiment, according to a report by Wamda.
Despite the broader contraction, the financial technology sector demonstrated resilience. Fintech accounted for 46% of the total investment during the quarter, with 25 startups capturing the largest share of the capital deployed.
Property technology followed as the second most active sector, securing US$228.6 million across 12 deals.
The UAE led the region in deal value, securing US$625.8 million across 46 transactions. Saudi Arabia followed with US$156.7 million raised by 57 startups, while Egypt ranked third with US$86 million across 12 deals.
Early stage dominates MENA funding
Early-stage ventures captured the majority of deal volume, with 110 startups raising a combined US$233 million.
Late-stage rounds slowed considerably, with only seven transactions recorded for a total of US$113 million.
While business-to-business startups drove the highest number of transactions, consumer-facing platforms absorbed the majority of the capital, raising US$564.6 million.
Debt financing constituted 11% of total investments, despite industry discussions around alternative capital structures.
The report also highlighted a stark disparity in capital allocation between founders, noting that male-founded startups captured 98% of total capital, while only five women-led companies secured funding.
The quarter experienced a sharp decline in activity following a strong start. January saw nearly US$500 million deployed across 59 deals, but by March, deal volume slowed to a near standstill, with just 17 startups raising less than US$50 million combined.
The investment outlook for the second quarter remains cautious.
Prolonged regional instability is expected to dampen confidence, prompting investors to delay capital deployment until market conditions stabilise.
Featured image credit: Edited by Fintech News UAE, based on image by muhammad.abdullah and grebeshkovmaxim via Freepik
