The last decade has seen a lot of exuberance in the Middle Eastern and North African (MENA) startup ecosystem. Venture capitalists splurged on every random idea there was. The order of the day was hypergrowth and user acquisition. And high-valued consumer-facing unicorns were offered near-limitless capital to draw from.
It was an era of disruptive ambition, but it was also plagued by a severe lack of liquidity. However, all that is about to come to an end with investors looking for pragmatic exits.
This radical shift cannot be understood without an overview of the global macroeconomic context. Global mergers and acquisitions technology has reached a decade-high volume of USD 587 billion across both public and private markets. But public markets remain unwelcoming of new tech entrants.
There were mainly six pure-play software IPOs globally between 2025 and 2026. Pure-play companies are those which focus only on one specific line of business or industry, such as software (as opposed to conglomerates that keep branching out and diversifying). It is important to note that there were 27 pure-play SaaS IPOs in 2021 alone.
The median of recent software IPOs traded roughly 10% below their private funding round valuations. Therefore, private companies are increasingly choosing to stay private. They call it the global IPO winter, and the MENA region is to face the consequences of it.
The MENA fintech market has exploded to a thousand active companies, and capital poured into the region has reached USD 237 billion in recent years, with a specific sum of USD 1.9 billion. The MENA region is projected to be the fastest-growing fintech market in the world with an annual growth rate of 35% through 2028, outpacing global averages of 15%. The region is slowly focusing on strategic M&A exits and steering away from raising primary capital.
Secondary Stealth Deals
Normally, big tech companies get rich by raising money (VC rounds) or by going public (IPO). In the current landscape, investors are selling their stakes privately rather than taking their companies public in 2026. This off-the-radar business transaction is what people call “secondary stealth.” These are big transactions that don’t make headlines.
The process is simple. Large players, like private equity firms and big corporations, buy early investor stakes in private tech funds or startups. They procure these investments at 25%-35% cheaper than their official net asset value. Because they pay less than the fund’s book value, they expect higher returns at around 17% unlevered yield.
They finance these deals by using asset-based lending (ABL). They don’t pay everything cash and instead put up collateral such as a startup’s intellectual property or recurring monthly revenue as security.
They can borrow up to 70% of the value of the collateral (70% loan-to-value). To top it all off, they use something called mezzanine debt at interest rates of 13%-15%. It’s riskier, but acceptable because the underlying assets are strong and predictable.
Raising money in VC rounds is very competitive and expensive, and it comes with many hype and even more uncertainty. Secondary stealth, on the other hand, is very rational and less crowded and is tethered to real cash flow rather than a hype-driven narrative that drives up valuations.
For a lot of investors, this feels like a smarter, calmer, and more grown-up way of making money from the tech market.
Industrialisation Of Startups
The industrialisation of the startup sector is quite simple to understand. Investors are slowly turning young tech companies (who are running wild, independent experiments) into proper factories.
For the longest time, governments and corporations believed that startups would be disruptors who would break the system and become huge unicorns.
Now, instead of waiting for a single company to become a colossal one, governments and other investors are slowly integrating these startups into the national economy like they are parts of a big machine.
Startups are slowly becoming a part of the national industrial strategy of the MENA region. Sectors with high market potential, such as AI, mobility, biotech, and deep tech, are receiving in-depth research support, sector-specific investments, and eventual global expansion assistance. This model ensures that whatever technological breakthrough happens in these startups can be utilised by domestic industries and not lost to foreign competitors or the volatility of the public market.
The B2B Super Infrastructure
Regional corporations are behind this industrialisation, private acquisitions, and secondary stealth. They are quietly swallowing smaller fiat companies and monopolising the market. It’s a fundamental reconstruction of the financial architecture of the Middle East. There’s a trend of momentum away from consumer apps towards B2B lending and a commerce backbone.
Big companies have realised that building in-house proprietary technology is difficult in an age of rapid AI and digital advancements. As a result, they are acquiring smaller companies with specialisations in open banking frameworks, embedded finance, payment orchestration, and automated receivable management.
There is a lot of focus on mergers and acquisitions of small and medium-sized enterprises with fintech solutions. For example, startups like Upfront have launched platforms that effortlessly integrate into existing corporate accounting systems to provide real-time financial analytics, working capital solutions, and payment orchestrations. Consequently, these companies have been considered prime acquisition targets.
These acquisitions can optimise cash flows for regional supply chains and make intra-African and Middle Eastern trade effortless.
Furthermore, these corporate giants who are acquiring this company see an indispensable utility. It might not be as glamorous as IPOs, but it is a strategically safe and profitable bet.