The Middle East and North Africa (MENA) startup ecosystem demonstrated significant renewed momentum in May 2025, with total funding reaching $289 million across 44 investment deals. This figure represents a robust 25% increase compared to April 2025 and a modest 2% rise year-on-year. The vast majority of this capital was channeled into equity deals, as debt financing constituted only 9% of the total investment volume for the month.

Egypt emerged as the leading ecosystem in the region for funding, largely propelled by Nawy's substantial $75 million round. Beyond this headline deal, seven other Egyptian startups collectively secured an additional $50 million, marking a level of investment activity not witnessed in the country since July of the previous year. Following Egypt, the United Arab Emirates (UAE) secured the second position, attracting $86.7 million through 14 deals. Saudi Arabia was a close third, with its startups raising $69 million across 15 deals. Notably, Kuwait made a significant re-entry onto the investment landscape, with two of its startups securing a combined $6 million, placing the GCC member in the fourth spot for funding in May.

Despite considerable buzz and high-profile political attention surrounding artificial intelligence (AI) in the Gulf Cooperation Council (GCC) countries, particularly following a visit by U.S. President Trump alongside leading AI executives from Silicon Valley, actual investment in AI startups did not align with the heightened narrative. Both Saudi Arabia and the UAE announced major initiatives to bolster their local AI ecosystems. However, the AI sector managed to secure only $25 million across two deals, indicating a disconnect between the prevailing discourse and tangible market funding.

In terms of sectoral performance, Fintech continued its reign as the dominant sector, attracting $86.5 million through 14 funding rounds. Proptech climbed to the second position, primarily due to Nawy’s significant contribution. Mediatech startups also saw notable investment, raising a total of $32 million from two deals, while contech startup WakeCap successfully brought in $28 million. The month was characterized by a scarcity of late-stage deals, with only one pre-Series C round recorded at $12 million. Early-stage investments, conversely, dominated the landscape, accounting for a substantial $161 million of the total funding disbursed.

Investor preference leaned heavily towards business-to-business (B2B) startups. In May 2025, B2B enterprises raised $157 million across 29 deals, capturing the largest share of investment. Companies operating with hybrid B2B/B2C models also attracted considerable funding, securing $79 million. In contrast, business-to-consumer (B2C) startups received significantly less attention, with nine companies raising a total of $53 million.

A persistent gender disparity in funding was also evident in the May 2025 figures. Startups founded exclusively by men captured the overwhelming majority of capital, securing 82% of the total funds raised. Female-founded startups received a mere 7% of the total investment, while teams comprising both male and female co-founders attracted nearly 11% of the capital.