The Middle East and North Africa (MENA) startup ecosystem recorded $2.3 billion in investment in 2024, a 42% decline year-on-year, according to the latest data from Wamda. However, when excluding debt financing, the drop narrows to 11%. Despite the downturn in total funding, investment activity remained resilient, with 610 deals closed, marking a 3.5% year-on-year increase.
The UAE reclaimed its position as the region’s top startup investment destination, securing $1.1 billion across 207 deals. Saudi Arabia followed with $700 million across 186 transactions, while Egypt ranked third with $334 million from 84 deals.
The second half of the year saw a rebound, with $1.5 billion invested, up 37% from the first half. However, deal flow slowed in the final quarter, with $698 million across 156 deals, down from $729 million in Q3. The ecosystem was largely devoid of mega-deals, apart from the $257.5 million raised collectively by eyewa and MNT-Halan.
Fintech retains dominance
Fintech continued to dominate the region’s startup landscape, accounting for 30% of total funding, with $700 million spread across 119 deals. Software-as-a-service (SaaS) ranked second in deal volume, attracting $228.6 million across 65 transactions. Web3 startups secured $256.8 million across 23 deals, making it the second-largest sector in terms of funding, followed by e-commerce with $253 million.
Egypt and the UAE led fintech funding, while Saudi Arabia saw the majority of its investment directed towards SaaS, reflecting the kingdom’s increasing focus on tech-driven economic diversification. Other notable sectors included proptech ($239 million), mobility ($94 million), and AI ($42 million), highlighting a shift towards digital transformation.
Oman and Bahrain gain momentum
The Gulf Cooperation Council (GCC) maintained its status as the most well-funded region, with Oman making a significant leap from 10th place in 2023 to 4th in 2024, securing $41.5 million across 12 deals. Bahrain attracted $29 million in investment through 12 transactions, while Kuwait received $22 million from eight deals.
North Africa, excluding Egypt, saw Morocco and Tunisia lead the way with $20.8 million and $13.1 million, respectively. Jordanian startups also demonstrated resilience, raising $15 million across 26 deals, up from $9 million in 2023.
Smaller ecosystems in Qatar, Palestine, Iraq, and Lebanon remained underfunded, with investment levels below $15 million each. However, governments across the GCC continue to introduce initiatives to strengthen the startup landscape, setting the stage for further growth.
Early-stage startups
Funding remained concentrated in early-stage startups, raising over $1.2 billion across 300 deals from pre-seed to Series A rounds. Late-stage funding was more constrained, with Series B and C startups securing $332 million across 10 deals, while only two startups managed to raise pre-IPO rounds totalling $143.3 million.
Venture debt remained a crucial component of startup financing, with total disclosed debt rounds reaching $331 million, down from $496 million in 2023.
Investor preference shifted towards business-to-business (B2B) startups, which attracted $1.2 billion across 325 deals, while business-to-consumer (B2C) startups raised $717 million across 209 deals. The remaining investments went to startups operating in hybrid B2B/B2C and direct-to-consumer (D2C) models.
UAE regains top spot
The UAE reasserted its dominance in startup funding, drawing $1.1 billion in investments, up from $977 million in 2023. The country’s ecosystem benefited from foreign and regional investors, solidifying its reputation as MENA’s most mature startup market.
Investors directed capital towards fintech ($265 million across 47 deals), Web3 ($255 million across 19 deals), and proptech ($197 million across 13 deals). The UAE’s fintech sector, in particular, gained traction with the growing adoption of digital payments and financial services.
Saudi Arabia, which led the region in 2023, saw investment levels drop 70% year-on-year to $700 million in 2024. However, excluding the $1 billion in debt from the previous year, the decline is 44%. SaaS emerged as the most funded sector in the kingdom, attracting $177 million across 27 deals, followed by fintech ($171 million) and mobility ($86 million).
Egypt’s startup ecosystem remained stable despite a halving of total funding. The total investment level was nearly unchanged when excluding the $274 million debt from 2023, while the deal count saw a modest 6% year-on-year decline. Fintech dominated, raising $237 million across 17 deals, supported by the late 2024 activation of Apple Pay and Google Pay in the country.
Investor landscape
Flat6Labs was the most active investor in the region, closing 55 deals, followed by Sanabil 500 with 14 transactions. Other prominent investors included Hope Ventures (9 deals), Oraseya Capital (13 deals), and RZM Investment (8 deals).
Foreign investors played a significant role, with US-based firms leading at 100 deals, followed by the UK (44 deals) and Singapore (23 deals). Saudi Arabian investors were the most active in the region, participating in 175 deals, while UAE-based investors took part in 98 transactions.
The region recorded 43 startup acquisitions in 2024, with the UAE leading at 18 exits, followed by Saudi Arabia (12) and Egypt (3). Notable acquirers included companies from the US, UK, India, Japan, and Germany, highlighting growing international interest in MENA-based startups.
Outlook for 2025
Despite the slowdown in investment, MENA’s startup ecosystem remains resilient, with the UAE maintaining its leadership and Saudi Arabia continuing to expand its tech-driven economic diversification. With growing fintech adoption, regulatory support, and a maturing venture capital landscape, the region is positioned for a potential rebound in 2025.
Investors are expected to focus on sectors aligned with long-term economic transformations, including fintech, AI, and sustainability-focused startups, while governments continue to implement policies to support entrepreneurship and digital innovation.
