MENA Startup Funding Trends in April and May 2025: What Drove $517M Spike

After a relatively slow first quarter, startup funding in the Middle East and North Africa (MENA) region gained meaningful traction across April and May 2025, signaling a cautiously optimistic outlook for the rest of the year. Combined, MENA startup funding trends in April and May 2025 saw over US$517 million invested across 70 deals, driven by a mix of pre-IPO rounds, sector diversification, and growing equity-based confidence.

MENA Startup Funding Trends in April and May 2025

In April, MENA startups secured US$228.4 million in funding across 26 deals, representing a 105% month-on-month increase and nearly 300% more than April 2024. The absence of debt financing marked a shift toward stronger investor confidence in equity-based deals. Saudi Arabia dominated the month with US$158.5 million raised, largely fueled by iMENA Group’s US$135 million pre-IPO round. The UAE followed with US$62 million across nine startups. While still smaller, Morocco notably climbed to third place with US$4 million, signaling a potential broadening of the investment map. In contrast, Egypt saw subdued activity, closing just US$1.5 million across four deals.

April's sector breakdown showed familiar dominance by fintech (US$44 million) but also saw emerging activity in traveltech, SaaS, and e-commerce. Yet gender disparity worsened: female-founded startups received less than US$500,000, just 3% of total capital, while male-founded teams secured 97%.

May, meanwhile, built on this momentum, with MENA startups pulling in US$289 million across 44 deals or a 25% increase from April. While equity remained dominant, debt financing reappeared, accounting for about 9% of the month’s total volume. Egypt reclaimed its position as the top destination for capital, with Nawy’s US$75 million round helping eight Egyptian startups raise a collective US$125 million. The UAE attracted US$86.7 million across 14 deals, while Saudi Arabia brought in US$69 million over 15 transactions. Kuwait made a rare fourth-place finish, raising US$6 million across two startups.

One standout development in May was the sharp contrast between AI hype and actual AI investment. Despite highly publicized initiatives in Saudi Arabia and the UAE, AI startups in the region drew just US$25 million across two deals. And it includes high-profile visits by U.S. officials and Silicon Valley executives. This gap between narrative and capital signals investor hesitation in backing AI companies without clear business models or revenue traction.

Gender disparity continued in May: male-founded startups captured 82% of total capital, while female-led ventures saw just 7%, and mixed-gender founding teams brought in around 11%.

Investor Confidence and Its Role in MENA Startup Funding Trends

Overall, the window of  MENA startup funding trends in April and May 2025 reflects cautious optimism for MENA startup funding trends 2025. While total investment levels are still well below the peaks seen in 2021 and 2022, the rebound in equity funding, renewed activity in overlooked markets like Morocco and Kuwait, and ongoing sector diversification offer early signs that the ecosystem is stabilizing.

What comes next will depend heavily on investor appetite for mid-stage bets, improved gender equity, and whether sectors like AI can deliver on their promise instead of just pitching.