The Middle East and North Africa (MENA) startup ecosystem raised $279 million across 42 deals in December 2024, according to a joint report by Wamda and Digital Digest. However, debt financing accounted for 44% of the total value, primarily due to ALLO’s $100 million debt round. When excluding debt financing, funding dropped to $156 million, reflecting an 8% month-on-month increase but a 76% year-on-year decline compared to December 2023.
UAE takes the lead
The UAE attracted $217 million across 18 transactions, accounting for 78% of the total funding. ALLO’s $100 million debt financing significantly boosted the figure, making it the largest single transaction of the month.
Saudi Arabia followed, raising $30 million across 11 deals. Bahrain emerged as the third-largest market, driven by Calo’s $25 million Series B funding round. Unipal, another Bahraini startup, completed a funding round but did not disclose the value.
Egyptian startups saw a sharp decline, securing only $2 million from five transactions. Startups in Morocco, Jordan, Tunisia, and Qatar collectively raised $4.4 million, further highlighting the regional funding gap.
Fintech and web 3.0
Web 3.0 startups secured the highest funding, though ALLO’s debt deal accounted for half of that amount. Fintech was the most active sector, raising $93.5 million across seven deals.
Foodtech made a strong return, raising $25.1 million across two deals, with Calo’s Series B round contributing most of this.
Edtech saw a modest recovery, raising $16 million across five funding rounds. Other notable sectors included construction tech and logistics, though they attracted smaller amounts.
Investor focus
Seed-stage startups raised $59 million in December, demonstrating continued investor interest in early-stage ventures. Pre-seed rounds secured $7.7 million across seven deals.
Six Series A startups raised $53 million in total. Calo’s Series B round was the only later-stage funding recorded during the month.
The business-to-consumer (B2C) model secured $128.4 million across 18 transactions, primarily driven by foodtech and fintech companies. Meanwhile, business-to-business (B2B) startups raised $124.6 million across 22 transactions, reflecting a near-equal distribution of funding between the two models.
Comparison to 2023
December 2024’s total funding represents a steep decline from the $1.16 billion raised in December 2023. The drop highlights the impact of global economic uncertainties on venture funding as investors increasingly turn to debt instruments and prioritise capital preservation.
