Startup investments in the MENA region dropped significantly in March 2025, with total funding plummeting by 76% to $127.5 million across 28 deals. This marks a steep decline from the $530 million recorded in February 2025, even when debt financing is excluded from both months.
FUNDING | MENA Startups Raised ~$500 Million in February 2025, Web3 Got Just $5 Million
When excluding debt financing from both months, February 2025’s investment activity saw an extraordinary 371% month-on-month (MoM) growth, underscoring the region’s accelerating momentum in… pic.twitter.com/FBV0vHOxZA
— BitKE (@BitcoinKE) March 4, 2025
According to local analysis, the decline is down to the U.S trade war against its global trade partners which has impacted the Middle East and North Africa (MENA) region, causing significant economic damage to key countries like Egypt, Jordan, Saudi Arabia, and the United Arab Emirates.
Startups in the United Arab Emirates (UAE) raised a total of $104.4 million through 14 deals, making it the top-funded ecosystem in the region.
Despite a quieter month, Egypt came second place in funding. Four Egyptian startups collectively attracted $11.6 million, edging out Saudi Arabia, where five startups raised a total of $8 million, placing it third in the regional ranking.
As in previous months,
- Fintech dominated the funding landscape, raising $82.5 million across 10 deals.
- Healthtech came in a distant second with $16 million invested across two deals, while
- The AI sector secured $14 million through four startups
Notably, software-as-a-service (SaaS) startups have remained out of favor with investors for the second consecutive month, reflecting a decline in interest compared to the momentum they experienced last year (2024).
Later-stage startups raised $46 million, making up 36% of total investment, with three companies securing Series B funding. Meanwhile, early-stage startups—from pre-seed to Series A—attracted the bulk of funding, receiving $58 million or 70% of the total.
Debt financing dropped significantly, contributing just 12.5% of the overall funds raised.
- The investment landscape also showed a strong preference for business-to-business (B2B) models, with 16 startups collectively raising $97 million.
- In contrast, business-to-consumer (B2C) ventures trailed with only $24 million spread across six deals.
- The remaining capital was directed toward startups operating under a hybrid B2B/B2C model.
For Web3, the situation was even more dire. In January 2025, Web3 got just $100K but the situation improved with February 2025 seeing $5 million invested in the sector. March 2025 however has reported no investment in the Web3 space in the region.
NORTH AFRICA | #MENA Startups Raise $863 Million in January 2025, Web3 Received Just $100K
Web3, which received the highest value of investments in December 2024 ($106 million) underperformed with just $100K raised from one startup.https://t.co/SVft9UcelX pic.twitter.com/YU9Lgz8nnv
— BitKE (@BitcoinKE) February 18, 2025
Despite a general slowdown in startup activity across the MENA region, the first quarter of 2025 recorded impressive quarter-on-quarter growth in venture capital funding. Startups in the region secured a notable $1.5 billion in Q1 2025, representing a 244% surge compared to the $442 million raised during the same period last year [Q1 2024].
Even after excluding debt financing, the region still saw a solid 44% increase – an encouraging indicator of the MENA startup ecosystem’s long-term resilience and sustainability.
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