The startup ecosystem in the Middle East and North Africa (MENA) showed a significant deceleration in December 2024, raising $$279 million across 42 deals. However, when debt financing is removed, which accounts for 44% of the total value, the amount drops to $156 million.

This reflects an 8% increase compared to the previous month, yet marks a 76% decrease from the same period last year.

Where is capital concentrated?

Most of the investments raised last month were directed towards startups in the UAE, totalling $217 million across 18 transactions, with $100 million assigned to ALLO’s debt financing. Trailing significantly were Saudi startups, with 11 companies obtaining $30 million. Bahraini startups emerged in third place, thanks to Calo's $25 million Series B funding round, alongside Unipal, which has not revealed the value of its round.

In December, Egyptian startups experienced a notably poor performance, securing approximately $2 million across five transactions. Similarly, Morocco, Jordan, Tunisia, and Qatar combined raised a total of $4.4 million.

Fintech regains its prominence

Startups operating in the Web 3.0 sector topped all sectors last month, but technically, fintech was the most funded sector, as half of Web 3.0’s funding was sourced from ALLO’s debt. In the meantime, the fintech sector managed to secure $93.5 million through seven transactions.

Foodtech made a comeback to the top three in December, with $25.1 million secured by two startups. Also, edtech showed signs of recovery, raising $16 million through five funding rounds.

Investors continue to show strong interest in the early stages, contributing $59 million to startups at the seed level and $7.7 million to seven startups in the pre-seed phase. Six startups in the Series A stage secured $53 million in funding. Meanwhile, Calo stood out as the sole later-stage deal recorded in December.  

The business-to-consumer (B2C) model was the most funded in December, with 18 B2C startups attracting $128.4 million, while 22 startups operating in the business-to-business (B2B) model garnered $124.6 million. 

The startups founded by men, as is often the case, attracted the majority of investments, securing $263 million. In contrast, only four startups led by women received $12.6 million, while two startups co-founded by both genders acquired $1.5 million in funding.