Wamda Report: MENA Startup Financing Slows Down in Q1 2026
The Wamda report on startup financing in the MENA region for the first quarter of 2026 highlights a significant slowdown in the ecosystem, with a total of $941 million raised, representing a 21.5% decrease from the previous quarter and a 37% year-over-year decline. This contraction occurs in a context marked by geopolitical tensions that have affected investor confidence and disrupted regional economic dynamics, including trade and logistics flows.
Q1 2026 Financing Trends
The quarter started on a relatively strong note, with nearly $500 million raised in January through 59 deals. However, the momentum quickly deteriorated in February, with a decline to $326.6 million, before collapsing in March, where only 17 startups raised less than $50 million in total, illustrating a near-standstill in the market by the end of the period.
Geographic Distribution
Financing remains highly concentrated, with the United Arab Emirates dominating the landscape with $625.8 million raised across 46 transactions, confirming their central role in the regional ecosystem. Saudi Arabia ranks second, with $156.7 million raised by 57 startups, followed by Egypt with $86 million across 12 deals. Other markets remain more modest, with Morocco attracting $22.6 million across six operations, largely thanks to a notable raise in the technology sector, and Bahrain with $22 million across two transactions.
Sectoral Breakdown
Fintech maintains its dominant position, accounting for 46% of total investments, confirming investors' continued interest in digital financial solutions. It is followed by proptech, which attracted $228.6 million via 12 deals, and foodtech with $60 million across three transactions.
Business Models and Funding Stages
The report highlights a strong polarization between types of business models: B2B startups dominate in volume, with 74 transactions for $199 million, while B2C startups capture the majority of capital, with $564.6 million across 43 deals, illustrating investors' preference for models with high growth and rapid monetization potential. The market remains heavily oriented towards early-stage financing, with 110 early-stage startups raising a total of $233 million, compared to only seven late-stage deals representing $113 million, confirming investors' persistent caution towards mature phases.
Gender Disparity
The report also highlights a significant structural imbalance in terms of gender, with only five startups founded by women raising funds, for a total of just $500,000, while startups founded by men concentrate around 98% of financing, or $924 million.
Outlook for Q2 2026
The prospects for the second quarter of 2026 remain fragile. Persistent geopolitical tensions continue to fuel uncertainty, which should maintain a cautious approach from investors, particularly in sectors exposed to international trade, such as logistics, e-commerce, and tourism. In this context, the market is expected to enter a waiting phase, with a likely slowdown in investments until a clearer stabilization of the regional economic and political environment.
