Saudi Arabia’s VC funding jumped 116% y-o-y in 1H 2025 to USD 860 mn, according to venture data platform Magnitt’s Saudi Arabia Venture Capital report (pdf). The funding was spread across 114 agreements, up 31% y-o-y and beating the 1H 2022 peak of 97 transactions. The rebound reversed slowdowns seen in the first halves of 2023 and 2024, driven by a record 70 agreements in 1Q 2025 and a 3.2x rise in 2Q funding y-o-y.

The drivers: Growth was driven by a 215% y-o-y increase in mega-transactions, which totaled USD 410 mn, alongside a 67% rise in non-mega funding. The volume of pre-seed and seed rounds also jumped 50% y-o-y.

The most-funded sectors: E-commerce/retail was Saudi Arabia’s most-funded industry, growing 78% y-o-y to USD 306 mn, driven by Ninja’s USD 250 mn round. Fintech was the runner-up, raking in USD 273 mn after a 275% y-o-y rise on the back of Tabby’s USD 160 mn Series E round. Excluding Tabby’s mega-transaction, the sector would record a 55% y-o-y growth. Funding also went to sustainability (USD 52 mn), EdTech (USD 40 mn, up 510%), and enterprise software (USD 38 mn, up 51%).

The most active sectors: FinTech led in transaction volume, increasing 150% y-o-y to close 30 agreements, thanks to early-stage series in the sector tripling to 24 agreements. E-commerces/retail came in second with 17 agreements (up 89%), followed by enterprise software with 14 (up 40%), transport and logistics with nine (down 25%), and Edtech with eight (up 60%).

Capital distribution has improved in 1H 2025, with the top five agreements accounting for 60% of total funding, down from 66% in 1H 2024. The ecosystem’s diversification was reflected in major tickets for PetroApp in sustainability (USD 50 mn), Ula.me in EdTech (USD 28 mn), and Merit Incentives in the enterprise software field (USD 28 mn), according to Magnitt.

Early-stage is still king: Early-stage investments dominated Saudi Arabia’s VC landscape, comprising 89% of all transactions — the highest proportion among top MENA markets. Later-stage activity remained nascent, with Series A transactions accounting for 6% and Series B for just 4% of the total.

Investor participation in Saudi startups hit a record 117 in 1H 2025, up 54% y-o-y, driven by growing international interest. Non-Middle East investors rose to 36%, with US investors’ share increasing to 18% from 11%. Despite their lead, local investors’ share dropped to 41%, while Emirati investors’ share fell to 12%. However, Egyptian investors made it to the top five with a 7% share.

M&A activity in the Kingdom surged in 1H 2025, with disclosed transactions rising to seven from two a year earlier. Local acquirers led five transactions across diverse sectors, with half the acquired startups under four years old — signaling a rising interest in early-stage M&As.

Topping the region: The Kingdom took up 56% of MENA’s total VC funding and captured 37% of its agreement flow, up from 30% in 1H 2024. We covered the regional 1H VC funding scene earlier this month.

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