Startup funding in the Middle East and North Africa (MENA) region has demonstrated remarkable resilience in 2025, bucking global venture capital slowdowns and surpassing 2024 totals by mid-year.
Total funding in the first half (H1) of 2025 alone reached $2.1 billion across 334 deals, which has seen a 134% year-on-year increase driven by a mix of equity and debt instruments, with debt accounting for 44% ($930 million) of the capital. This momentum carried into Q3, with July alone seeing $783 million across 57 deals, more than double the previous year’s figure.
In the broader MENA region, Fintech and Artificial Intelligence (AI) have emerged as the undisputed leaders, attracting a significant amount of funds from investors. This is due to their alignment with digital transformation, regulatory support, and scalability in underserved markets.
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Fintech’s Unrivaled Position
Fintech has been the top-funded sector consistently, underscoring its role as MENA’s innovation powerhouse. In H1 2025, the sector secured 93 deals in MENA alone, increasing its share of total deals to 30%, the highest of any industry in the past five years. Funding also nearly matched FY 2024 levels, with $598M raised.
This sector dominance reflects broader trends as over 1,000 fintech firms now operate in MENA, with four unicorns and projections for 35% annual revenue growth through 2028 outpacing the global average of 15%.
Key drivers include payment solutions, buy-now-pay-later (BNPL), and embedded finance, bolstered by regulatory tailwinds like Saudi Arabia’s licensing of 68 finance companies by September 2025.
Notable 2025 deals include:
– Tabby (Saudi Arabia): $160 million Series E in February, valuing the BNPL platform at $3.3 billion and crowning it MENA’s most valuable fintech.
– NymCard (UAE): $33 million Series B in March for API-first payment infrastructure expansion across 10+ markets.
– Tamara (Saudi Arabia): $2.4 billion in September, dominating regional BNPL and pushing weekly funding totals over $4.2 billion.
In April-May, fintech secured $86.5 million across 14 deals, edging out proptech. Overall, 119 fintech startups raised $700 million in 2024 (30% of total MENA funding), a trend accelerating into 2025 with 28% of fintechs now embedding AI as a core component.
AI’s Rising Momentum
While fintech holds the crown, AI funding is on a significant growth trajectory, with funding surging amid global AI fervor but tempered by regional investor familiarity gaps many prefer “safer” fintech over pure-play AI.
H1 saw $44.7 million in the UAE alone for AI/Web3 ventures. Globally, AI-fintech investments hit $10 billion in 2023, with MENA following suit through targeted expansions. As of September 2025, AI investments are accelerating economic diversification, particularly in Saudi Arabia and the UAE, with projections estimating a $320 billion economic boost by 2030 through automation, improved services, and innovation across sectors like finance, healthcare, and energy.
While global AI funding exceeded $100 billion in 2024 (up 80% from 2023), MENA’s share has grown resiliently, capturing 12% of regional venture funding in 2024 despite broader VC slowdowns.
Key trends include:
– Government-Led Initiatives: National strategies like Saudi Arabia’s Vision 2030 and the UAE’s AIATC are channeling billions into infrastructure, talent development, and sovereign AI models.
– Sector Focus: Fintech AI (e.g., fraud detection) and healthcare applications lead, with AI projected to add $30 billion to MENA’s economy by 2030.
Despite a Q2 2025 global VC drop to $91B, MENA’s AI funding is poised for recovery, fueled by events like Expand North Star and FII Forum.
PayPal Announces Plan To Invest $100M Across Startups In Middle East And Africa
US-based digital payments giant PayPal, has unveiled plans to invest $100 million across the Middle East and Africa to fuel innovation, support emerging startups, and drive inclusive economic growth.
The investment will be channeled through minority stakes, acquisitions, PayPal Ventures funding, technology deployment, and talent development, with a focus on helping local businesses scale, unlocking new opportunities for innovators, and bringing millions of consumers and communities into the digital economy.
Below are the key impacts, grounded in the context of the investment and regional dynamics:
Access to Capital: The $100 million will provide critical funding for early-stage startups, particularly in fintech, payments infrastructure, and digital commerce. This addresses a major challenge in MEA, where access to venture capital is often limited compared to other regions.
Scaling Opportunities: Through PayPal Ventures’ minority equity stakes and potential acquisitions, startups like Tabby, Paymob, and Stitch (already in PayPal’s portfolio) can scale faster, accessing global markets via PayPal’s infrastructure.
Innovation Catalyst: Investment in tech and talent will spur innovation in areas like AI-driven payments, buy-now-pay-later services, and mobile money solutions, which are critical in MEA’s mobile-first markets.
Overall
The dominance of funding in the MENA region signals the maturation of the region as a global innovation hub. Notably, with the fintech and AI region attracting a significant portion of funding, both sectors are poised to birth 4-6 new unicorns by the year 2026.