MENA startup investment had a harsh reality check in March 2025 as volumes fell by an astounding 76% month over month to USD 127.5 million across 28 agreements, down from USD 530 million in February 2025. The drop is still significant even after subtracting loan funding from both months.
Major players such as Egypt, Jordan, Saudi Arabia, and the United Arab Emirates (UAE) are grappling with the challenges posed by a fragile global economy, which has been further exacerbated by ongoing trade conflicts between the United States and the MENA region. As a result of this volatility, both trade volume and value have decreased by 50% year over year.
However, this MENA startup investment report does have a bright spot. The UAE regained its position as the leading investment destination in the region, drawing in USD 104.4 million from 14 agreements, which accounted for the majority of the capital this month. With four startups raising USD 11.6 million, Egypt overtook Saudi Arabia, which raised USD 8 million through five deals.
With ten agreements totalling USD 82.5 million, fintech continued to be the region’s golden child. AI made some progress with USD 14 million across four firms, but healthtech came in last with USD 16 million. However, for the second consecutive month, SaaS businesses received no investor attention, continuing their disappearance act.
Gender equity suffered greatly. Male founders received USD 113 million, mixed-gender teams received the remaining funds, while female-led firms received no funding at all.
Q1 Is More Positive Despite The March Slump
The first quarter of 2025 presents a much more encouraging picture. Startups in the MENA region raised a staggering USD 1.5 billion, a 244% increase over the first quarter of 2024. Despite March’s decline, the region’s underlying strength is demonstrated by the growth, which stands at a robust 44% even when debt financing is taken out of the equation.
With 36 startups generating over USD 1 billion in revenue during the quarter, FinTech once again took the lead. The growing interest in cryptocurrency, digital wallets, and virtual assets is what keeps it in the spotlight, and it doesn’t seem to be slowing down.
Looking ahead, the VC environment is probably going to be conservative in Q2. Investors may avoid early-stage, riskier ventures and instead gravitate toward later-stage firms with established track records.
However, there is still plenty of room for innovators who can quickly adapt and align with changing global dynamics, particularly in industries like e-commerce, logistics, and mobility, to lead in a redesigned market.
Wamda and Digital Digest, who continue their monthly in-depth analyses of the MENA startup financing landscape, are the source of these insights.
The steep decline in March 2025 of the MENA startup ecosystem reminds us that global headwinds do not exempt even high-growth areas. Data indicators point to a market in flux with a 76% drop in investment from February and a 50% year-on-year drop in deal value and volume.
With even regional powerhouses like Saudi Arabia and the UAE suffering notable declines, the US trade conflicts and general macroeconomic uncertainty have revealed the weakness of the region’s investment momentum.
Still, the disproportionate impact on female-led businesses—which got zero funding in March 2025—raises concerns about systematic gender prejudice in an already taxed investment environment.
The UAE’s predominance in the March figures gives some hope even with its volatility. Having secured more than 80% of the monthly budget, UAE’s performance highlights the ongoing attraction of its startup environment and investor trust.
Egypt and Saudi Arabia followed, albeit with significantly smaller hauls, implying that capital becomes even more concentrated. Even as SaaS firms find themselves in a confusing dry spell, Fintech’s excellent performance—accounting for two-thirds of March’s investment—reflects persistent investor interest in industries linked with digital transformation and alternative finance.
Seen holistically, Q1 2025 presents a significantly more hopeful picture. Funding increases of 244% year-on-year point to March as more of an aberration rather than a trend. Once more leading the pace is fintech, with over USD 1 billion entering the industry—a sign of investor taste for creative ideas that fit changing economic times. As Q2 plays out, cautious hope rules.
From early-stage moonshots to later-stage businesses with proof of traction, the new approach among VCs seems to support the latter. The lesson for founders is simple: change quickly to fit world events, and strengthen your company model. The road forward is smaller and requires more exacting execution and simpler value propositions; it is not closed.