Startup funding in Egypt fell 37% y-o-y in 9M 2025, coming in at just USD 202 mn, according to Magnitt’s 3Q 2025 Emerging Venture Markets report seen by EnterpriseAM. The fall in value was also reflected in a fall in transaction count, down 24% over the same period to 53.

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But it was a different story for our Gulf neighbors, with the UAE seeing the total value of funding increasing 188% to USD 1.4 bn and Saudi Arabia seeing a 158% y-o-y jump in funding to USD 1.3 bn.

Driving the fall in Egypt was a fall in big ticket funding rounds, with the USD 157.5 mnHalanround during 9M 2024 having an important impact on the numbers, Magnitt CEO Philip Bahoshy told EnterpriseAM. If you exclude big-ticket rounds, funding is actually up 25% y-o-y, he explained. Egyptian series A rounds had a good start to the year, rising 76% to 67.7 mn in 9M 2025. Driving this was USD 52 mn raised by Nawy and another USD 15.7 mn raised by Sylndr. Excluding big rounds, funding has risen consistently over the last three 9M periods, Bahoshy added.

Weighing on VC activity is “persistently high inflation and continued currency depreciation,” which is limiting USD returns for those abroad and reducing liquidity in early-stage rounds — the primary market for the local VC scene — Bahoshy told us. This resulted in 11 less early stage transactions from the year before, with once active local investors now reducing their activity significantly, which illustrates the “sector-wide caution.”

Across the region as a whole, MENA startups raised over USD 3 bn across 469 transactions by the end of September — that’s more than double last year’s total and, for the first time, surpassing the longtime emerging market leader Southeast Asia, which trailed with USD 2.5 bn, according to a statement (pdf) from Magnitt. The third quarter was MENA’s strongest on record, with USD 1.2 bn raised, up 259% y-o-y. This suggests a “potential shift in global capital allocation,” though a longer period is needed to confirm a permanent trend, Bahoshy told us.

The UAE commanded the top spot for total funding, soaring 188% y-o-y to USD 1.43 bn across 164 transactions. KSA and the UAE together accounted for more than 90% of total regional funding. Meanwhile, Turkey’s funding grew 50% to USD 428 mn.

Mega rounds — over USD 100 mn — drove more than half the total value in the third quarter, led by the UAE’s XPANCEO (USD 250 mn), Airalo (USD 220 mn), and Saudi Arabia’s Hala (USD 157 mn). Still, non-mega activity has been showing sustained quarterly growth since 3Q 2024, signaling “a deepening pipeline rather than short-term concentration,” Bahoshy told us. This was underscored by a maturing mid-stage, with series A and B funding surging 205% y-o-y to USD 1.4 bn in the first nine months. The early-stage pipeline also remains robust, with pre-seed deals rising 30% y-o-y, signaling a healthy influx of new founders.

The fintech sector remains in the lead, attracting USD 965 mn (up 97% y-o-y) and representing over a quarter of all transactions. Growth was supported by open banking frameworks, major regional events, and large Saudi tickets. Enterprise software also gained momentum, rising to USD 320 mn across 52 transactions, up from USD 70 mn across 44 in the same period last year.

Merger and acquisition activity doubled to 40 transactions in the first nine months of 2025 — a three-year high and a sign of a “healthier, more liquid ecosystem,” Bahoshy said. Exits were concentrated in the UAE (15) and Egypt (13), due to their mature buyer bases and ecosystems. However, “the exit challenge is more acute in the UAE and Egypt than it is in Saudi Arabia,” as the more mature startups in both countries are on the search for liquidity to survive the global extension of the average 7-year path to an exit, according to Bahoshy.

Magnitt expects the remaining months of 2025 to see “sustained momentum and measured optimism,” bolstered by continued public-private collaboration and institutional capital flowing into emerging markets.

The region as a whole bucked global trends, as emerging venture markets saw a 6% y-o-y decline in funding to USD 6.56 bn. Southeast Asia was hit hard with a 48% decline to USD 2.5 bn, logging its weakest quarter in seven years.

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