MENA Startup Market Sees Significant Slowdown in February 2026
The startup market in the Middle East and North Africa (MENA) region experienced a significant slowdown in February 2026. Following a strong start to the year, funding amounts dwindled to $326.6 million (spread across 62 transactions), representing a 42% decrease from the previous month and a 38% decrease from February 2025, according to Wamda. Despite this decline, the financing structure remains stable, with debt accounting for only 16% of the capital injected, confirming investors' preference for equity.
Most Attractive Hub
The United Arab Emirates continues to dominate the MENA ecosystem, with 23 startups raising $162.8 million, accounting for nearly half of the capital deployed during the month. Saudi Arabia follows at a distance, with 25 startups securing $87.7 million, while Egypt takes third place thanks to a late transaction that brings the country's total to $64 million.
Most Attractive Sector
The fintech sector remains the driving force behind investment, attracting $94.7 million across 14 transactions, driven by the digital transformation of financial services and the growth of payment and lending platforms. E-commerce has re-entered the top 3, supported by the financing of Breadfast, which contributes to a total sectoral amount of $52 million. Deeptech occupies the third place, with $51 million spread across only two deals, indicating sustained interest in high-capital-intensity tech startups.
Are Young Startups Still Attracting Investors?
February was marked by the absence of mega deals, except for Breadfast ($50 million, pre-Series C) and Stake ($31 million, Series B). Young startups continue to account for the majority of activity, with 49 companies collectively raising $136.4 million. This trend illustrates increased caution among investors regarding large amounts while maintaining solid confidence in emerging innovation.
Investment Orientation
Investment remains strongly oriented towards B2B, with 38 startups capturing $137 million, compared to 18 B2C startups that raised $62 million.
Female Founders' Access to Funding
The gender gap persists, with no startup founded exclusively by women securing funding in February. Only three mixed teams managed to raise $14 million.
Outlook for the Rest of the Year
The observed slowdown appears more structural than conjunctural. The focus on early-stage investments and the absence of mega deals translate to a more rigorous selection of investments rather than a disengagement from the market. Geopolitical tensions, particularly the US and Israeli attacks on Iran in late February, have also heightened uncertainty.
However, the MENA ecosystem remains solid, with several regional funds closing new vehicles in late 2025, leaving significant capital reserves ready to be deployed. Historically, startups in the region have demonstrated strong resilience in the face of crises, suggesting a positive long-term trajectory for entrepreneurial financing.
