AI start-up Mal carries Middle East FinTech in H1 with mega-funding round

Abu Dhabi-based AI start-up Mal accounted for 37 per cent of Middle East and North Africa fintech funding in the first half of 2026 after securing a $230 million mega-round to launch what it calls the world’s first AI-native Islamic digital bank. Regional fintech funding for H1 2026 stood at $617 million, with the concentration of capital behind a handful of large rounds helping keep the headline figure relatively robust despite a marked drop in deal activity.

“FinTech funding looks considerably stronger through the headline number than through the breadth of activity underneath it,” said Philip Bahoshy, founder and chief executive of Dubai-based data firm MAGNiTT.

The Mal round alone represented roughly 37 per cent of the region’s fintech tally and was a major factor in a separate figure reported for the period: fintech companies in the region raised $387 million in the first half of the year, a total that underscores how a single large transaction can materially distort aggregate totals. Deal volumes halved year-on-year to 57 transactions, illustrating a sharp decline in the number of financings even as capital deployed per deal increased.

Geographically, the UAE and Saudi Arabia dominated the funding landscape, capturing 85 per cent of fintech investment in H1. Egypt was the region’s third-largest market by funding. Outside of Mal, notable rounds included UAE-based Fasset, which raised $51 million, and Saudi rounds led by Madfu and Stitch, which secured $26 million and $25 million respectively. Together, those three transactions amounted to $102 million—less than half of Mal’s funding haul.

Concentration and subsectors

Payments solutions remained the most active fintech sub-industry by deal share, accounting for 28 per cent of transactions in the period. Yet the sharp fall in the overall number of transactions suggests investors are being more selective, concentrating larger pools of capital into fewer companies and markets.

• Regional fintech funding, H1 2026: $617 million
• Mal funding: $230 million (37% of regional fintech funding)
• Total fintech raised by companies in region, H1 2026: $387 million
• Number of fintech transactions: 57 (half the prior-year total)
• Deals under $100m: 62.7% of total funding (down from nearly 80% a year earlier)
• UAE and Saudi Arabia share of funding: 85%

MAGNiTT’s Bahoshy warned that the headline funding figure masks a sharper slowdown in the broader ecosystem. “A smaller number of large rounds, concentrated with one investor and one market, are carrying the [first] half’s resilience. That distinction matters more than the top-line figure,” he said.

Looking ahead, analysts and market participants will be watching whether the second half of 2026 brings a wider distribution of capital across more companies and markets, or whether funding remains clustered in a few mega-deals. A recovery in deal numbers would be a stronger signal of the underlying health of the fintech sector than headline funding alone, Bahoshy added: “The second half will show whether other investors and other markets step in behind this activity, or whether FinTech’s real health continues to be closer to what the deal count already shows.”