Venture capital funding in the Middle East surged to a record $2.77 billion in the first nine months of 2025, defying a global downturn, according to MAGNiTT.
Funding jumped 152 per cent year on year, with the number of deals rising 10pc to 388, highlighting the region’s growing appeal to global investors even as capital flows into Southeast Asia, Africa, and Pakistan weakened.
The surge reflects broader trends in the Middle East venture capital ecosystem, where early-stage and non-mega funding showed robust growth despite global headwinds.
In the third quarter alone, capital surged to $1.2bn – its highest quarterly total on record – propelled by three mega rounds: XPANCEO’s $250 million series A and Airalo’s $220m series C in the UAE, and Hala’s $157m Series B in Saudi Arabia.
MAGNiTT chief executive officer Philip Bahoshy said: “The first nine months of 2025 marked the recovery of the Mena venture capital ecosystem. Not only did the region cross $3bn in funding by September, but it also outperformed Southeast Asia for the first time for the first nine months of the year.”
Within the Mena region, the Gulf states led the gains. The UAE attracted $1.43bn in the first nine months of 2025, up 188pc year on year, with strength across both mega rounds with $653m and non-mega with $775m.
Saudi Arabia followed at $1.29bn, up 158pc year on year, underpinned by $571m in mega deals and a near-doubling of non-mega funding to $719m.
Deal momentum also broadened: Saudi Arabia recorded 173 transactions, a 38pc yearly increase, while the UAE posted 164, a 5pc rise, with both ecosystems expanding at the early stage. Egypt, by contrast, saw funding contract 37pc year on year.
Sector trends across Mena were led by fintech and enterprise software. Fintech funding in the Middle East climbed to $880m, up 248pc year on year, supported by scale rounds such as Tabby’s Series E and Hala’s Series B.
Enterprise software accelerated to $320m across 52 deals, including a $183m mega round by Cadena, while non-mega activity doubled year on year.
Elsewhere in Mena and across Africa, signals were mixed. Africa’s nine-month funding rose 8pc to $839m even as deal count fell 14pc to 228, with pre-seed activity weakening and seed/series A value inching higher.
Mergers and acquisitions activity continued to consolidate across the region, with the Middle East leading nine months of dealmaking with 26 transactions and Egypt posting 13 acquisitions, up from three a year earlier.
Outside Mena, Southeast Asia endured the sharpest pullback. Funding dropped 48pc year on year to $2.5bn across 319 deals in the nine-month period of 2025.
The third quarter was the weakest quarter in more than seven years, with $541m across 80 deals and no mega rounds; the share of capital from international investors also fell markedly from the second quarter.
Pakistan and Türkiye proved comparatively resilient in value terms, amassing $450m in nine months, up 40pc yearly, despite a 32pc drop in deals to 121.
Across all EVMs, venture funding reached $6.56bn in nine months, down 6pc year on year, with total deals sliding 18pc to 1,056. The decline was concentrated in mega rounds with a 19pc yearly drop, while non-mega funding was broadly flat.
International investors drove a larger share of venture capital flows into the Middle East in the third quarter, supplying 59pc of total funding and 64pc of all $20m-plus rounds.
In Saudi Arabia, non-Saudi investors accounted for a record 55pc of active backers, with the number of unique investors up 44pc year on year.
Despite the dominance of large deals, non-mega funding in the region rose 14pc quarter on quarter and 71pc year on year, signalling broader momentum.
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