The UAE retained its position as the MENA region’s most active startup funding hub in February 2026, with 23 startups collectively raising $162.8 million, accounting for nearly half of the capital deployed across MENA during the month.
According to the latest report by Wamda, Saudi Arabia followed at a considerable distance, where 25 startups secured $87.7 million. Egypt ranked third, raising $64 million across six deals, driven largely by a single later-stage transaction.
MENA startups raise $326.6 million across 62 deals
Investment activity across the MENA startup ecosystem slowed notably in February 2026, as the region recorded a pullback following a more active start to the year. Startups raised a combined $326.6 million across 62 deals during the month, marking a 42 percent month-on-month decline and a 38 percent drop compared with February last year.
While funding volumes softened, the underlying investment structure remained largely unchanged. Debt financing represented just 16 percent of total capital deployed, indicating that investors continue to favour equity-backed ventures rather than alternative financing instruments.
Fintech continues to dominate investment landscape
From a sector perspective, fintech continued to dominate the investment landscape, attracting $94.7 million across 14 deals. The sector’s continued leadership reflects its structural role within the region’s digital transformation agenda, particularly across payments infrastructure, lending platforms and financial service digitization.
E-commerce returned to the top three sectors after several quieter months, supported primarily by Breadfast’s funding round, which pushed total sector funding to $52 million across three transactions.
Meanwhile, deeptech ranked third, drawing $51 million through just two deals, highlighting continued investor interest in capital-intensive, technology-driven ventures.
Early-stage startups drive deal activity
Unlike several months seen in 2025, February was characterised by the absence of mega deals. Only two later-stage transactions were recorded: Breadfast’s $50 million pre-Series C round and Stake’s $31 million Series B.
Meanwhile, early-stage MENA startups captured the bulk of deal activity, with 49 companies collectively raising $136.4 million. The distribution suggests that while capital deployment remains cautious at scale, investor conviction around early-stage innovation in the region remains intact.
Investor appetite also remained also strongly skewed toward startups serving businesses rather than consumers. B2B startups accounted for 38 deals and attracted $137 million in funding. In contrast, 18 B2C startups secured $62 million, while the remaining capital went to startups operating hybrid business models.
Read: FAB approves record $2.41 billion cash dividend for 2025 after posting $5.75 billion net profit
MENA startup funding outlook remains supported by strong fundamentals
The report also revealed that gender disparities in MENA startup funding were also evident during the month. Female-founded startups did not receive any funding in February, even through accelerator-backed deals.
All capital deployed during the month went to male-led startups, while only three mixed-gender founding teams secured funding, collectively raising $14 million.
February’s slowdown appears largely structural rather than cyclical. The absence of mega deals, combined with a heavier concentration of early-stage investments, suggests that capital deployment is becoming more selective rather than retreating from the market entirely.
Despite the recent slowdown, the broader outlook for MENA startup funding remains supported by strong fundamentals. Several regional venture funds closed new vehicles toward the end of 2025, leaving substantial dry powder available for deployment. Historically, the region’s startup ecosystem has demonstrated resilience during periods of geopolitical volatility, suggesting that while funding momentum may fluctuate month to month, the long-term trajectory of venture investment in MENA remains firmly intact.
