MENA startups raised a record-breaking USD 7.5 billion in 2025, but the impressive headline figure masks a dramatic redrawing of the region’s investment map. According to an annual report from Wamda, a 225% jump in funding value is being driven by a heavy concentration of capital in the Gulf, while Egypt, a former leader, stumbles and new hubs like Morocco begin to claim the spotlight.
Quick Facts
- MENA startups raised a record USD 7.5 billion in 2025.
- Saudi Arabia and the UAE accounted for 86% of funding.
- Morocco is emerging as a top challenger to Egypt.
The Great Concentration: Gulf Capital Takes Over
While the region celebrated its strongest funding year on record, the money flowed into fewer places. The UAE and Saudi Arabia together accounted for 86% of all startup investment in 2025. “A couple of years earlier, that 86% was coming from three countries combined,” Magnitt Research Director Farah El Nahlawi tells EnterpriseAM, highlighting the rapid consolidation.
This dominance is largely underwritten by sovereign wealth, with state-backed funds in both Gulf nations pouring capital into the venture space and attracting international investors. The momentum continued into 2026, though at a slower pace, with the region drawing USD 492.6 million in the first quarter, according to GPCA data.
“Since 2023, the UAE and Saudi [have been] the leaders,” explains Jeff Schlapinski, managing director of research at GPCA. “Then you have Egypt, followed by Jordan, Morocco, and Tunisia.”
Egypt’s “Double Whammy” and a Funding Freefall
No country’s story illustrates the regional re-sorting better than Egypt. After leading MENA in deal count in 2022, its ecosystem was hit hard by a currency devaluation and global fiscal tightening.
“In 2020 and 2021, some strong Egyptian startups were getting term sheets for anywhere between USD 10-50 mn,” Algebra Ventures Managing Partner Tarek Assaad tells EnterpriseAM. “From 2022 to 2024, these same companies were starting to raise USD 1-2 mn.”
The liquidity crisis drained the market, particularly at the earliest stages. “By 2025, seed funding had dropped so low it was practically non-existent,” says Seif Bahgat, director of strategic partnerships at Sanad. “Now, it is starting to return through individuals and angel investors, but there is no dedicated entity focusing on seed investment.”
Morocco’s Moment: A New Challenger Rises
As Egypt’s fortunes turned, Morocco’s startup scene began to climb, drawing significant investor interest and, at times during 2025, even surpassing Egypt in monthly funding.
“Morocco is probably the farthest ahead with some of their initiatives and the support of local investors,” says Schlapinski.
This environment is attracting institutional capital. “We love to enter ecosystems early, right when we think they are about to grow. Morocco is now ready for scale-up,” Walid Mansour, co-founder and co-CEO of Middle East Venture Partners (MEVP), tells EnterpriseAM. One standout example is DeepEcho, an AI-first healthtech startup backed by Algebra Ventures that recently received FDA approval for its AI-powered fetal ultrasound.
New Corridors: The Egypt-Morocco Connection
The fragmenting market is also reconnecting along new lines, with a promising corridor emerging between Egypt and Morocco. The hubs offer complementary strengths: Egypt provides scale and deep technical talent, while Morocco offers currency stability and strong links to European and Francophone African markets.
“We see a big opportunity for a corridor between Egypt and Morocco,” says Assaad. “We see Egyptian startups going to Morocco…and we also expect Moroccan companies to come to Egypt as well.”
The movement is already happening, with firms like Algebra Ventures and Flat6Labs investing in Morocco, while Moroccan investors like Al Mada Ventures and Akwa Group have deployed capital in Egypt.
Pressure Points Beyond Geopolitics
Despite the growth, the region faces several challenges. El Nahlawi flags a global VC slowdown, a sluggish graduation rate from early-stage to Series A, and a potential recalibration of sovereign support as key pressure points.
However, some experts believe the core investment thesis in the Gulf remains strong. “For many of the global investors who have set up shop in the region, the playbook is probably largely the same because the policy of local policymakers and their agenda is clear,” notes Schlapinski. “They want to support economic diversification, innovation, and bringing in technologies from outside into the region.”
Ultimately, the MENA startup map is now defined by two dominant poles in Riyadh and the UAE, surrounded by a growing field of smaller hubs, from Casablanca to Amman, all competing to become the region’s next center of gravity.
About Wamda
Wamda is the leading entrepreneurship ecosystem enabler in the Middle East and North Africa. It accelerates entrepreneurship ecosystems throughout the MENA region by offering a multi-stage, sector-agnostic investment vehicle, a media platform, and community and corporate-enablement programs.
Source: EnterpriseAM
