At first glance, the startup ecosystem in the Middle East and North Africa (MENA) appears to have experienced a staggering growth in January 2025, raising a total investment of $863 million distributed over 63 rounds. But when discounting the debt financing ($768 million), the amount will be almost similar to January 2024.

Last month showed a 210% month-on-month (MoM) increase; however, when excluding debt from both months, there will be a 64% month-on-month drop.

At the start of the year, it is common for the investment landscape to encounter a sluggish movement, as investors assess market dynamics while entrepreneurs refine their pitch decks and evaluate their business value before embarking on a fundraising journey. Given the dynamic developments taking place in nascent ecosystems, such as Qatar and Oman, along with the ongoing LEAP 2025 event in Saudi Arabia, we can anticipate a positive first quarter.

Lendo and Forus debt deals have propelled the Saudi ecosystem to the forefront of the region, with Saudi startups securing a total of $839.5 million across 21 funding rounds, of which $750 million was attributed to the aforementioned transactions.

Notably, the startups based in the UAE exhibited disappointing performance last month, as 15 of them secured merely $14.6 million in funding.

The Egyptian ecosystem followed with a total of $6 million through seven transactions. The rest of the MENA countries collectively raised less than $2.5 million.

The fintech sector outperformed all others in January, amassing $776.6 million through 11 transactions, bolstered by Lendo and Forus deals. In second place was the proptech sector, attracting an investment of $38.7 million by four startups, while e-commerce trailed shortly after with five deals totalling $30 million.

January lacked later-stage investment announcements, except for Lendo, which is at its post-Series B stage. Most of the investment was directed towards Series A through two transactions. However, when looking at volume, the pre-seed stage led with 15 startups obtaining $4.6 million.

Investors continued to favour the business-to-business (B2B) model, contributing $692 million to 41 B2B startups, while the business-to-consumer (B2C) model trailed behind, with 20 startups securing $70.5 million. The remaining funds went to two startups operating in both models.

In terms of gender, startups founded by male entrepreneurs obtained the largest share of funding, totalling $795 through 47 transactions. Nonetheless, the startups founded by women attracted $61.6 million in funding, showcasing impressive growth. Approximately $5.6 million was designated for startups that are co-founded by both men and women.

These monthly reports are a collaboration between Wamda and Digital Digest.