Saudi Arabia has emerged as the leading destination for venture capital in emerging markets, surpassing Singapore after attracting $391 million in the first quarter of 2025. This marks a 53 percent increase from the previous year, positioning the Kingdom at the forefront of venture funding across the Middle East, Africa, Pakistan, Turkiye, and Southeast Asia.
The standout investment was a $160 million series E round by fintech firm Tabby, but broader market activity also showed resilience, with deals under $100 million rising 9 percent compared to the previous quarter. The report attributes this growth to strong backing from sovereign investors, active accelerators, and notable exits like Rasan’s IPO.
Saudi Arabia dominated the MENA region, accounting for 58 percent of all venture funding and 41 percent of transactions. Funding for deals below $100 million jumped 87 percent year-on-year, while series A and B rounds soared 437 percent, fueled by significant raises from companies like Ula.me and Merit Incentives.
Overall MENA funding reached $678 million in the first quarter, a 58 percent increase, despite a drop in deal volume. Improved investor sentiment, monetary policy shifts, and high-profile events contributed to this surge. Saudi Arabia’s share of regional funding has climbed steadily over the past three years, reflecting a shift in capital flows and investment priorities.
Early-stage investment in the Kingdom increased, with non-mega deals rising for the fourth straight quarter and series A and B rounds up 50 percent from the previous quarter. Meanwhile, Singapore’s venture funding dropped sharply, highlighting a shift in global investor focus toward Saudi Arabia’s stable and proactive business environment.
Fintech remained the most dynamic sector, responsible for 30 percent of Saudi deals and 57 percent of regional funding. The sector’s funding surged 362 percent to $384 million, largely due to Tabby’s large round and growing demand for digital finance. More fintech deals now fall in the $5 million to $20 million range, indicating sector maturity.
Enterprise software was the second most active area, with Saudi Arabia and the UAE accounting for most transactions. This category saw a major boost from productivity apps like Merit Incentives and Qeen.ai, driving enterprise funding up 112 percent to $61 million.
Despite a broader drop in MENA deal volume, Saudi Arabia maintained momentum with 54 completed deals and a strong pipeline of early-stage investments. There was a notable shift toward larger deals, as investors targeted more advanced startups. The share of deals worth $1 million to $5 million rose to a five-year high, while smaller deals declined.
Five of the region’s ten largest deals came from Saudi Arabia, including Tabby’s mega round and significant investments in Zension and Merit Incentives. Leading investors such as Blue Pool Capital and Hassana Investment Co. played a key role, especially in fintech.
The exit environment also strengthened, with MENA recording 21 exits—a record number for mergers and acquisitions. Saudi Arabia’s IPO pipeline expanded, enhancing the appeal of its startup ecosystem. However, the median time to exit via M&A lengthened, reflecting ongoing challenges for early-stage liquidity.
Despite this progress, new geopolitical risks and changing US trade policies have created uncertainty. Venture capital deployment, investor decision-making, and startup fundraising could be affected. Nonetheless, the fundamentals in emerging markets remain strong, with MENA well-positioned for continued growth thanks to abundant local capital, supportive policies, and active sovereign funds. As investors look beyond traditional markets, regions like MENA and Southeast Asia are expected to draw increased attention, especially in technology-driven sectors less vulnerable to global volatility.