MENA VC Funding Hits $1.5 Billion from 310 Deals in H1 2025

Providing a comprehensive analysis of VC activity across the Middle East, Africa, Southeast Asia, Pakistan & Turkey, MAGNiTT, the leading data and intelligence platform tracking venture capital (VC) and private equity across Emerging Venture Markets (EVMs), said that VC funding across all EVMs dropped to $4 billion in H1 2025, the lowest half-year total since 2017.

The decline was driven by a 32% decrease in MEGA rounds across the aggregated markets, while sub-$100 million deals rose by 6% to $2.94 billion, MAGNiTT said in its H1 2025 EVMs and MENA Venture Capital Reports on Tuesday.

In contrast, against the backdrop of volatile global macroeconomic and geopolitical uncertainty, MENA was the strongest performer among EVMs, now accounting for 39% of all EVM funding, up from 19% in H1 2024.

MENA funding rose 92% y-o-y to $1.5 billion across 310 deals, marking the region’s strongest H1 performance since 2022. Both Q1 and Q2 2025 saw MENA funding outperform their 2024 counterparts, an encouraging sign of resilience.

Through deals like Ninja’s $250 million investment round, late-stage also rebounded, which marked the fourth consecutive quarter with a MEGA deal for the region. MENA’s success is driven in large part by the Saudi Arabia and UAE growth, collectively accounting for 85% of funding and 74% of deal flow across MENA.

MAGNiTT CEO Philip Bahoshy said that in line with the global recovery in VC, H1 data showed strong y-o-y growth, especially in markets like Saudi Arabia and the UAE.

While Q2 has been quite a turbulent time in macroeconomics and geopolitics, it’s still early in my opinion to pinpoint the impact of the global uncertainty on regional venture, which is likely to reflect in Q3 & Q4 data, if at all,” he said.

MEGA Deals Rebound

Mega deal investments, those greater than $100 million+, are an indicator of appetite for later-stage investment. H1 2025 saw two MEGA deals in MENA, Ninja’s $250 million and Tabby’s $160 million round, which accounted for 27% of total capital deployed, up from 16% in H1 2024. This reflects a promising return of investor appetite for late-stage activity, especially in the GCC region.

Notably, the share of Series A and B rounds exceeding $20 million jumped to 42%, up from only 10% a year ago. The numbers suggest a growing preference for backing companies with proven traction and scalability, as investors double down on ventures that have moved beyond the idea stage and are ready to accelerate.

Saudi Arabia and UAE Lead

Despite the onset of Ramadan and Eid, Q2 had notable events and conferences like Dubai AI Week, and the Dubai FinTech Summit, along with the US and Saudi Forum in Riyadh, attended by the US President Donald Trump.

This activity was also reflected in deal flow announcements with Saudi Arabia seeing more investment capital than any country in the region for the third straight H1, raising $860 million (+116% y-o-y) from 114 transactions (+31% y-o-y), in part attributed to the return of MEGA rounds including by Ninja and Tabby.

FinTech’s Strong Performance

FinTech funding in MENA tripled y-o-y to $596 million, representing 39% of total capital in H1 2025. Even excluding MEGA rounds, the sector led both by funding and deal count.

With non-MEGA FinTech funding up 122% y-o-y, and 30% of all MENA deals falling within the sector, it remains the cornerstone of regional innovation and an investor favourite because of its scalability. Start-ups focused on payments and lending dominated the activity, and a record 34% of FinTech deals exceeded $5 million in size.

Record-Breaking M&A

H1 2025 saw 34 M&A transactions, already surpassing the total for the full year 2024. The increase was led by a historic Q1, which recorded 22 deals, driven by pre-tariff optimism, easing inflation, and robust liquidity.

Bahoshy said that M&A activity picked up in H1, especially in Q1, which marked a record high for the region.

That momentum, however, eased in Q2, potentially signaling early caution. As tariff impacts begin to unfold, H2 may bring more measured activity, particularly in cross-border deals. The next two quarters will be telling, he said.