Saudi venture market emerges smaller, more local in 1H 2026

Saudi’s venture market looked very different in the first half of the year, with fewer rounds, smaller checks, and an almost entirely Saudi investor base. The Kingdom’s startups raised USD 219 mn across 72 rounds in 1H, with funding down 74% y-o-y against a 41% drop in round count, according to a separate report from the platform.

The drop-off was top-heavy. No round above USD 100 mn closed in the Kingdom during the half, after transactions of that size contributed USD 414 mn a year earlier. Series A held up, with seven rounds worth roughly USD 105 mn, nearly matching the prior year on several mid-sized fintech transactions. Pre-seed and seed funding fell 48%. No Series B or Series C+ rounds were recorded at all.

The capital that did move went to a narrow set of companies. Fintech absorbed 67% of funding despite a 41% decline in the sector. The 10 largest rounds accounted for about 64% of 1H’s total, with seven of them raised by fintech startups. Gaming, meanwhile, led on round count rather than value.

Domestic capital filled more of the gap than it did a year ago. Saudi-based investors supplied 74% of funding, up from 54% in 1H 2025, while the international share fell to 13% from 36%.

That tracks with what we’ve been reporting: Saudi VCs have been continuing to raise and deploy even as regional and global investors remain cautious on geopolitical risk. Sharakah Capital partner Latifa Banasr previously told us the next three years are expected to bring more regional VC firms expanding their presence.

The shift showed up in investor activity too. Saudi Arabia was the largest source of venture investors across MENA in 1H 2026, accounting for 26% of all participating investors, according to a separate Magnitt report. Riyadh-based Merak Capital was the region’s most active investor, deploying USD 7.1 mn across 19 transactions, up from just one a year earlier, driven by its focus on gaming startups. It was trailed by the UAE’s Raseya Capital with USD 4.8 mn spread across 17 transactions, and Plus VC with USD 2.8 mn across 14 transactions.

The regional picture mirrors the Saudi one. Investor activity fell 26% y-o-y to 243 investors across MENA on a 48% drop in international participation, against just a 2% decline among regional investors. Regional participation was also concentrated, with the 10 most active investors accounting for 45% of all MENA transactions in 1H, up from 39% a year earlier, despite a decline in overall activity.

We broke down the startup side of the regional VC picture here.