MENA’s Startup Scene Soars: Saudi Arabia Leads $690M VC Surge

There's a serious buzz around the Middle East and North Africa right now, with venture capital investments absolutely flying in the start of 2025. We're talking over $690 million pouring into local startups across 137 different equity deals, a healthy jump of 60% compared to the same period last year. These numbers released recently by Digital Digest paint a clear picture: the region's startup scene has truly come into its own.

It's interesting to see who's setting the pace here. Saudi Arabia, not long ago known mainly for oil production, has taken the lead, becoming the region's biggest magnet for venture capital money. In fact, the kingdom alone accounted for half of all funding this past quarter, that's a tidy sum of $348 million, with the UAE close behind at around $285 million (roughly 41%), while Egypt's share amounted to about $44 million.

What's fuelling this Saudi surge? A combination of factors really. Its Vision 2030 strategy has definitely paved the way, alongside more favourable regulations. Plus, there's a growing cluster of homegrown fintech startups and clever B2B SaaS platforms now making waves right across the region.

For years, the UAE has comfortably held the title as the go-to startup hub across the region, championing innovation in areas such as financial technologies and artificial intelligence. It's clear the UAE isn't losing its appetite for backing bold and innovative startups anytime soon.

Speaking of fintech, the biggest deal so far this year was claimed by the Saudi buy-now-pay-later (BNPL) platform, Tabby, which bagged an impressive $160 million. Clearly, investors still fancy alternative lending schemes as big business. Hot on its heels is the UAE's FLOW48—a savvy startup offering embedded finance solutions to SMEs, raising $69 million to scale things up.

And just behind them we have AppliedAI—another Emirati starlet—which pulled in a cool $55 million to further its AI-driven automation systems geared specifically for the banking sector. It's these mega-deals demonstrating the real clout and growing maturity of the regional tech ecosystem.

Indeed, as Arageek readers might agree, these numbers are an unambiguous sign that we're well beyond that early experimental stage now and fully into a phase of investors picking winners and backing serious scale-ups. The shift towards larger deals, predominantly within fintech and AI, underlines a growing confidence among investors—this isn't a tentative dip into the water; it's diving straight in at the deep end.

What's particularly striking is seeing Saudi Arabia as a genuine trailblazer in this funding boom. No longer content coming second to regional neighbours in tech innovation, the Kingdom is now firmly in the driving seat, leading both in terms of investment sums and sheer number of deals. Elsewhere, investors still see Egypt as fertile ground, despite its lower figures this quarter, with plenty of room for improvement during the rest of the year.

As we move into the second quarter, we'll definitely be keeping an eye on where this momentum takes us. Will it continue, or will it plateau? Much also depends on how governments and investment bodies react to the growing skills and sophistication of local entrepreneurs. One thing is clear though: with backing like this, MENA is cementing itself not just as a promising new frontier, but as a vital cog driving the global venture system forward.

Personally, it's exciting to witness the region’s startup scene flourishing like this. And if this pace continues, who knows—perhaps next April we’ll be discussing billion-dollar quarters rather than millions. For now though, let's sit back with a good cuppa and watch this thriving tech scene unfold.

It's a No-nonsense weekly roundup of MENA funding deals, startup wins, and VC moves. Quick summaries, key numbers, zero fluff.