Structured credit accounted for more than half of the GCC startup ecosystem’s $7.4B in tracked funding in 2025, reaching $4.1B compared with $3.3B in venture capital, according to Fast Company Middle East.
Private debt, including venture debt and growth credit, also rose more than eightfold from roughly $500M in 2024. Saudi Arabia accounted for most of the region’s structured credit deployment, but the market remains highly concentrated: fintech represented about 95.5% of the total, or nearly $3.9B, largely through a small number of large transactions involving companies such as Tamara and Lendo.
Investors and advisers say the trend reflects more than a shift away from equity. Lending businesses use debt to finance their loan books, while more mature startups can borrow against recurring revenue, receivables, inventory or signed contracts. Founders are also seeking to limit dilution after a difficult fundraising cycle.
Private debt is not suitable for companies still validating their product or business model. It requires predictable cash flow, disciplined forecasting and a clear repayment plan. Advisers warn that restrictive terms, including minimum cash requirements and revenue targets, can create serious pressure if growth slows or a follow-on round fails to materialize.
The region still needs clearer regulations, stronger data and more predictable restructuring processes for private credit to scale. The emerging view is that debt will complement, rather than replace, venture capital, funding specific growth needs where repayment can be tied to an asset or cash flow.
Source: Fast Company Middle East
