RIYADH: Startup investment in the Middle East and North Africa surged to $4.5 billion in the third quarter of 2025, marking a 523 percent quarter-on-quarter increase, according to data from Wamda and Digital Digest. 

The quarter’s strong finish was powered by a record-breaking September, which alone accounted for $3.5 billion across 74 deals— up 914 percent month on month and 1,105 percent year on year. 

Even excluding the $2.6 billion allocated for debt financing, September remained one of the most active months in the region’s history, with equity funding up 147 percent compared to August, representing an annual rise of 194 percent.

The figures suggest a return of investor confidence following a muted August, when total funding stood at $337.5 million. 

Saudi Arabia was the driving force behind the September surge, with 25 startups raising a combined $2.7 billion. 

Key contributors included Tamara’s $2.4 billion debt facility, Hala’s $157 million series B round, Lendo’s $50 million debt raise, and Erad’s $33 million in debt financing. 

Much of this momentum was attributed to deal-making around Money20/20, the region’s flagship fintech event, where 15 transactions were announced.  The UAE followed with 26 startups securing $704.3 million, underscoring sustained interest in the region’s more mature startup hubs in Dubai and Abu Dhabi. 

Oman came in third with $7.7 million across three startups, while Morocco and Egypt trailed with $6.8 million and $3.2 million, respectively. 

Egypt’s continued funding slump reflects ongoing macroeconomic challenges and currency instability, which have weighed heavily on investor sentiment. 

Fintech dominated sectoral activity in September, attracting $2.8 billion across 25 deals — almost entirely from Saudi Arabia’s megadeals. 

Property tech followed, bolstered by Property Finder’s $525 million round, accounting for nearly all of the $528.6 million raised in the sector. Artificial intelligence startups brought in $34.3 million across seven transactions, while human resources tech raised $24.2 million.  

Early-stage startups accounted for the majority of deal activity, with 55 companies raising $129.4 million. 

However, later-stage firms, though fewer in number with just four rounds, captured $699 million, indicating investor preference for scaling ventures with proven models. 

Business model trends also shifted, with B2B2C startups leading fundraising for the first time. 

These hybrid ventures raised $2.4 billion across 15 deals, outpacing pure B2C companies, which raised $557.3 million, and B2B startups, which secured $456.3 million across 36 transactions. 

The data suggests a growing preference for flexible business models that can monetise both consumer and enterprise demand. 

Despite these gains, gender disparity in startup funding remained stark. Male-founded startups attracted $3.3 billion, while female-founded ventures secured only $1.1 million across four deals. 

Mixed-gender founding teams raised the remainder, continuing a trend where women-led startups have yet to surpass 5 percent of total capital raised in 2025. 

On a year-to-date basis, MENA startups have raised $6.6 billion through 514 rounds, already surpassing the annual totals of most years since 2021. 

Saudi Arabia led the third quarter’s funding with $3.2 billion raised across 62 deals, followed by the UAE with $1.2 billion from 59 deals. Egypt, Iraq, and Morocco rounded out the top five, albeit with significantly lower totals. 

Sectorally, fintech remained dominant in the third quarter with $3 billion in funding, followed by proptech with $684 million and e-commerce with $265 million. 

Of the 180 deals closed, 134 were early-stage, raising $538.3 million. Later-stage startups secured $981.3 million across 17 rounds, while 12 startups opted for debt instruments, reflecting increased use of alternative financing strategies. 

Despite ongoing geopolitical challenges, including political tensions and the Israel-Hamas war, 2025 has emerged as a transformational year for the region’s venture ecosystem. 

Engagesoft raises $3.5m

Saudi Arabia-based Engagesoft has raised $3.5 million in a pre-series A round led by Silicon Badia to accelerate its AI-driven product roadmap and expand across the Middle East. 

The company, founded in 2021 by brothers Omar and Tareq Tahboub, provides an employee engagement and organizational effectiveness platform that enables enterprises to track engagement, culture, leadership, and performance using data-driven insights. 

The capital injection will be used to further develop the platform and support its regional expansion amid growing demand for workplace intelligence solutions across the Gulf region. 

Nuxera AI secures $2.5 million pre-seed investment

Saudi health tech startup Nuxera AI has raised $2.5 million in a pre-seed round led by Sanabil Venture Studio by Redesign Health. 

Founded in 2024 by Amin El-Hemaily, Asad Khan, and Nada Hassan, Nuxera is positioning itself as an AI hub for healthcare by offering integrated, scalable technologies for hospitals and health clusters. 

The company plans to use the funding to expand its engineering and commercial teams in Saudi Arabia, enable hospital-wide deployments, and enhance its AI models through clinical partnerships. 

Touche Prive raises $5m to enter GCC fashion retail with Saudi expansion

Turkish fashion platform Touche Prive has secured $5 million in Shariah-compliant growth funding from Amplify Growth Partnership, a joint venture between Ajeej Capital and Nuwa Capital. 

Founded in 2014 by Enes Can Buyukkose and Mirac Bal, Touche Prive serves customers in over 100 countries through its omnichannel fashion platform, targeting women aged 20 to 45. 

The funding will support the company’s strategic expansion into the Gulf Cooperation Council region, beginning with Saudi Arabia, where it plans to open flagship retail stores through a partnership with a leading local retail group. 

Tagaddod raises $26.3m series A

Egypt-based clean tech firm Tagaddod has raised $26.3 million in a series A round led by the Arab Energy Fund, with participation from FMO, VKAV, A15 Ventures, and other existing investors. 

Founded in 2013 by Nour El-Assal and Ahmed El-Farnawany, Tagaddod operates a platform that collects, traces, and certifies renewable waste-based feedstocks such as used cooking oil, acid oils, and animal fats from thousands of suppliers. 

With a presence in Africa, Asia, Europe, Jordan, and the Netherlands, the company plans to use the new funding to expand into new markets, develop AI-driven technologies, and build infrastructure to handle increased feedstock volumes. 

EMMA Systems raises seed funding

Qatar-based EMMA Systems has raised an undisclosed amount in seed funding from Plus VC, with additional participation from angel investors. 

Founded in 2020 by Wisam Costandi and Mohammad Hourani, EMMA Systems offers an AI-driven Software-as-a-Service platform that integrates operational data across airports to improve efficiency, safety, and sustainability. 

The company will use the capital to accelerate product development, support global expansion, and strengthen its position as a regional deeptech player in aviation systems. 

MGX joins $6.6bn OpenAI secondary share sale

Abu Dhabi-based AI investment platform MGX has participated in a $6.6 billion secondary share sale in OpenAI, according to Reuters. 

The deal, one of the largest private AI transactions this year, values OpenAI at approximately $500 billion. 

The transaction enables employees and early investors to liquidate part of their holdings without bringing new capital into the company. 

Other participants included institutional investors such as Thrive Capital, SoftBank, Dragoneer, and T. Rowe Price. MGX, backed by Abu Dhabi’s sovereign wealth, focuses on large-scale investments in AI globally. 

YAL.ai raises $12m series A to expand AI-powered telecom fraud prevention 

UAE-based YAL.ai has raised $12 million in a series A round to scale its AI-driven telecom fraud protection platform globally. 

The startup, founded in 2024, uses on-device, self-learning AI to detect and block scams across calls, messages, and emails while ensuring user data privacy and compliance. 

The funds will support research and development efforts, broader validation testing, and partnerships with telecom operators, banks, and fintech firms. 

YAL.ai also plans to expand its platform’s capabilities with AI-guided safe replies and advanced discovery tools to enhance secure digital communications.