MENA Startup Funding Plunges 82% in June to $52 Million

June 2025 witnessed a dramatic 82 percent drop in startup funding across the MENA region, falling to just $52 million, after two consecutive months of strong growth—$228 million in April and $289 million in May.

The sudden dip underscores the volatile nature of the MENA venture ecosystem, which continues to search for equilibrium amid shifting global economic conditions. A deeper look reveals that fintech dominated June's funding landscape, capturing 74 percent of all capital, continuing a trend of sectoral dominance dating back to 2017. However, this heavy reliance on one sector also exposes the region to higher systemic risk when capital inflows tighten.

Key Highlights

• MENA startup funding dropped 82 percent in June to $52M.
• Fintech and B2B dominated, drawing most investor interest.
• Debt made up 40 percent of funding, showing rising caution

Key historical deals such as PayTabs ($20M) and Souqalmal ($10M) exemplify the long-standing investor confidence in MENA fintech.

Another emerging theme is the rise in debt financing, which accounted for 40 percent of June’s total capital, reflecting growing investor caution. This aligns with broader 2025 venture capital trends, where investors are increasingly prioritizing enterprise-focused, revenue-driven models over high-growth but risky consumer plays.

Notably, B2B startups captured 78 percent of total capital in June, indicating a strong preference for models with clear monetization paths. Startups now need significantly more traction and recurring revenue to justify valuations previously based more on potential than performance.

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While MENA’s startup ecosystem has matured significantly since 500 Global’s first regional fund in 2017, the current environment demands adaptability, financial discipline, and sector diversification to weather ongoing macroeconomic uncertainties.