RIYADH: Startup investment across the Middle East and North Africa declined in February, as companies raised a combined $326.6 million across 62 deals, reflecting a slowdown following a stronger start to the year.
The total represents a 42 percent month-on-month decline and a 38 percent drop compared with February 2025.
Despite the pullback in overall funding volumes, the structure of investment remained largely consistent, with debt financing accounting for 16 percent of capital deployed, indicating continued investor preference for equity-backed ventures.
The UAE remained the region’s most active funding hub during the month, with 23 startups in the country raising $162.8 million, accounting for nearly half of all capital deployed across MENA.
Saudi Arabia ranked second, with 25 startups securing $87.7 million, while Egypt placed third with $64 million across six deals, largely driven by a single later-stage transaction.
Fintech maintained its position as the region’s most funded sector, attracting $94.7 million across 14 deals. The sector continues to benefit from strong investor interest tied to the region’s ongoing digital transformation across payments, lending platforms and financial services.
E-commerce ranked second after several quieter months, raising $52 million across three deals, supported primarily by Breadfast’s $50 million pre-series C round. Deeptech followed in third place, drawing $51 million across two transactions.
February also saw a notable absence of mega deals. Only two later-stage transactions were recorded during the month — Breadfast’s, and Stake’s $31 million series B.
Early-stage startups accounted for the majority of deal activity, with 49 companies raising a combined $136.4 million. The distribution suggests investors remain active at the early stages of company development even as larger capital deployments remain more selective.
Business-focused startups attracted the largest share of capital. B2B companies secured $137 million across 38 deals, while 18 B2C startups raised $62 million. The remaining funding went to startups operating hybrid business models.
Gender disparities in funding were also evident during the month. Female-founded startups did not secure any funding in February, while three mixed-gender founding teams collectively raised $14 million.
The slowdown appears largely structural rather than cyclical, with the absence of large transactions contributing significantly to the monthly decline.
Geopolitical tensions also escalated on the final day of February following US-Israeli attacks on Iran. Because the developments occurred at the very end of the month, they are unlikely to have materially affected deals closed or announced during February.
However, the escalation may begin to influence activity in the coming weeks. A slowdown in March is possible as the conflict continues, with startups and investors potentially delaying the closing or public announcement of funding rounds while reassessing short-term regional risk.
TruDoc Healthcare secures $15m
TruDoc Healthcare has raised $15 million in a pre-series B funding round as the Gulf Cooperation Council-based virtual-first healthcare platform expands its at-home and remote care services.
The round saw participation from members of the Al-Nahyan family and the Al-Ketbi family, alongside continued backing from existing investor Pulsar Capital.
TruDoc combines virtual-first primary care, chronic disease management, pharmacy-at-home, diagnostics and in-home medical services, including hospital-at-home critical care.
Ahmed Mansour, CEO of the Private Department of Sheikh Mohamed Bin Khaled Al Nahyan, said: “Healthcare systems everywhere are being asked to do more — serve more people, manage more chronic disease, and deliver better outcomes — without endlessly expanding physical infrastructure.”
He added: “TruDoc represents a fundamentally different approach: one that scales access and efficiency while maintaining clinical integrity.”
Vish Narain, executive chairman at TruDoc, said: “For centuries, healthcare has been organized around buildings — patients moving toward facilities, systems optimized for episodic care.
“What TruDoc is building is healthcare as infrastructure: continuous, accountable, and designed to operate beyond four walls at population scale.”
Converted acquires Egyptian fashion e-commerce platform Mitcha
Mitcha founder Hilda Louca, left, will join Converted as a partner and executive director. Supplied
Converted, a US-based AI-powered advertising technology company, has acquired Egyptian fashion e-commerce platform Mitcha as it expands its data-driven digital commerce ecosystem.
Founded in 2024 by Mohamed Fergany, Converted provides a platform that manages marketing data, ad payments and campaign execution across platforms including Google, Meta and TikTok.
Mitcha, founded in 2018, operates an online fashion marketplace supporting regional designers.
Following the acquisition, Mitcha founder Hilda Louca will join Converted as a partner and executive director, where she will lead strategic partnerships and regional expansion.
The deal is expected to accelerate the rollout of Converted Orders, a platform designed to link digital advertising campaigns directly to verified sales data, allowing campaigns to optimize based on confirmed orders rather than clicks.
Muhlah closes $7.5m seed round
Muhlah Zamaniyah for Finance, operating under the brand Muhlah, has closed a $7.5 million seed funding round to expand its Shariah-compliant consumer microfinance services in Saudi Arabia.
The round was led by BIM Ventures and Japanese financial conglomerate SBI Group, with participation from AlSuhaimi Holding Group and Fakhr Investment Holding Co.
Muhlah, a venture-studio spinoff from BIM Ventures, operates under a license from the Saudi Central Bank.
The company plans to expand its financing capacity through Shariah-compliant structures, including off-balance-sheet and partner-backed arrangements, while exploring additional funding channels and international partnerships.
In a statement, SBI Group said: “The shareholders, BIM and SBI Group, entered into the memorandum of understanding in May 2024, under the support of the Ministry of Investment, regarding a strategic business alliance that includes the joint establishment and management of investment funds.”
Mohamed Merah, managing partner and CEO of BIM Ventures, said: “From inception, Muhlah was designed to bridge local market expertise with global financial depth.”
He added: “This round reflects what the BIM-SBI alliance was built to achieve: creating investable, regulation-ready platforms that attract world-class partners to the Kingdom.”
Abdulaziz Al-Rammah, CEO of Muhlah, will lead the company’s next phase of growth, focused on expanding access to responsible Shariah-compliant consumer finance products.
Shorooq joins $1.03bn funding round for AI startup AMI Labs
UAE’s Shorooq has joined a $1.03 billion funding round for Advanced Machine Intelligence Labs, an artificial intelligence startup founded by AI researcher Yann LeCun.
The round, one of the largest seed financings raised by an AI company, was co-led by Cathay Innovation, Greycroft, and Hiro Capital, as well as HV Capital and Bezos Expeditions, valuing AMI Labs at approximately $3.5 billion pre-money.
Investors in the round include Temasek, Nvidia, and SBVA, as well as Mark Cuban, Eric Schmidt and Xavier Niel.
Bilal Baloch, partner at Shorooq. Supplied
AMI Labs is developing AI systems based on “world models,” designed to learn from spatial and real-world data rather than primarily predicting text or images.
The company was founded by Turing Award winner and former Meta chief AI scientist Yann LeCun and is led by CEO Alexandre LeBrun, with headquarters in Paris and additional offices in New York, Montreal and Singapore.
Bilal Baloch, partner at Shorooq, said: “AMI Labs represents one of the most ambitious efforts to redefine the foundations of artificial intelligence. Yann LeCun’s vision for world-model architectures could fundamentally expand what machines are capable of understanding and executing in the physical world.”
