MENA VC funding Surges to $1.2B in Q3 2025, beats Southeast Asia : MAGNiTT Reports

For years, the Middle East and North Africa’s (MENA) startup scene looked up to Southeast Asia — a region often held as the benchmark for emerging market innovation. But not anymore.

According to new data from MAGNiTT, venture capital investment in MENA hit US$3 billion in the first nine months of 2025, officially overtaking Southeast Asia for the first time. That total came from 469 deals, more than double last year’s pace — and it’s already higher than the region’s full-year 2024 total.

It’s a milestone that cements MENA’s transformation from a promising frontier to a full-fledged global player.

Q3 2025 was the region’s strongest quarter ever, pulling in US$1.2 billion. The spike was fueled by some blockbuster rounds — XPANCEO’s US$250 million raise and Airalo’s US$220 million Series C — both UAE-based startups that are putting the Gulf at the center of global tech conversations.

While Saudi Arabia led by number of deals, closing 173 investments, the UAE pulled in the most capital — a massive US$1.4 billion. Together, they accounted for nearly 80% of all funding in the region. Egypt, Bahrain, and Morocco also saw healthy activity, especially in fintech, AI, and logistics — sectors that are now the heartbeat of MENA’s innovation story.

“MENA is no longer a side story. It’s the story,” said a regional investor quoted in MAGNiTT’s Q3 2025 report. “We’re seeing real conviction from founders, local capital, and international investors who now view the region as a serious long-term bet.”

That confidence is visible everywhere — from Saudi’s Vision 2030 to Dubai’s push to become the world’s AI capital. In fact, much of the new funding is coming from the Gulf’s deep-pocketed sovereign and institutional investors — PIF, Sanabil, ADQ, and Mubadala — as well as regional venture firms like Shorooq Partners, VentureSouq, and Global Ventures that have been quietly building the region’s dealmaking backbone.

The rise of mega-rounds is another defining shift. Just a few years ago, $50 million was a rare sight in MENA. Now, $200 million-plus deals are becoming part of the narrative — a clear signal that scale-ups are emerging, not just startups.

Behind the numbers lies something deeper — a change in mindset. Founders are thinking globally from day one, governments are competing to attract innovation, and international investors are finally taking the region seriously.

Meanwhile, Southeast Asia — long the darling of emerging market VCs — is facing a slowdown amid tighter liquidity and fewer late-stage opportunities. That contrast has amplified MENA’s moment.