BNPL Sector Leads MENA's VC Investment in Q1 2025 (So Far)

In the first quarter of 2025, MENA’s Q1 2025 VC investment landscape is showing clear signs of where investor appetite lies. So far, Buy Now Pay Later (BNPL) platforms have raised an impressive US $166.4 million, more than double the funding of the next closest segments like credit cards (US $74.1M) and consumer lending (US $74M).

Dominance of BNPL Platforms in MENA’s Q1 2025 VC Investment

This sharp concentration of capital is a reflection of how rapidly the region’s financial behavior is evolving. The sector’s appeal in MENA, particularly evident in MENA’s Q1 2025 VC Investment, is deeply tied to regional realities: a largely young, digitally savvy population with limited access to traditional credit.

Credit card penetration remains relatively low across many MENA markets, especially in North Africa and lower-income Gulf economies. BNPL solves a very real pain point by offering flexible, short-term financing without the friction of bank approvals.

And let’s not overlook where the money isn’t going. GenAI applications only brought in US $15 million, while key banking infrastructure like core banking and B2B SaaS for banks landed near the bottom of the chart with just US $12 million each. Even heavyweights like payment processors and digital wallets are lagging in comparison.

Investors’ Preferences and Emerging VC Investment Trends

From an investor’s lens, BNPL checks key boxes: it scales quickly, monetizes recurring transactions, and integrates directly into consumer flows. Startups in this space often run lean on infrastructure, making capital more efficient. The potential for cross-border expansion is also strong. BNPL platforms that prove successful in the GCC can easily expand into neighboring markets like Jordan, Lebanon, or even parts of Sub-Saharan Africa.

Take Tabby for example, which secured US $160M in Series E funding in February, making it the most valuable fintech company in the region. Their acquisition of digital wallet Tweeq and the introduction of products like Tabby Card and Tabby Plus demonstrate its commitment to broadening financial services in alignment with Saudi Arabia’s Vision 2030 goals.

Yet the picture isn’t without its risks. Critics point to rising consumer debt, regulatory uncertainty, and questions around sustainable margins. However, for now, those concerns are taking a back seat to growth metrics, and investor optimism along with it.

Interestingly, while frontier tech like GenAI and DeFi struggled to gain serious VC traction this quarter, fintech segments tied directly to spending and credit access dominated. That tells us investors in MENA’s Q1 2025 VC investment cycle are leaning toward practical, market-ready solutions over experimental tech plays.