MENA startup funding dropped 38% to $326.6mln in February 2026

Funding for startups across the Middle East and North Africa (MENA) fell sharply in February 2026, dropping 38% year-on-year to $326.6 million across 62 deals, according to a report from Wamda and Digital Digest cited by Zawya. The total was also down 42% from January 2026, as the region recorded fewer large-scale rounds and a tilt toward smaller, early-stage investments.

Wamda and Digital Digest noted, "The capital deployed during the month was down by 42% compared to January 2026 and 38% less than the year prior, as the region saw a shift toward smaller, early-stage deals and a lack of mega deals."

Geography and sector breakdown

The UAE led the region’s fundraising in February with $162.8 million invested across 23 startups, followed by Saudi Arabia with $87.7 million across 25 startups and Egypt with $64 million across six deals. Sector activity was concentrated in fintech, e-commerce and deeptech.

• Fintech: $94.7 million across 14 deals
• E‑commerce: $52 million across three deals
• Deeptech: $51 million across two deals

The report also highlighted capital structure and business-model preferences. "Debt financing accounted for 16% of the total capital, indicating that the majority of the startup funding was equity-based," the findings said, while investors continued to favour business-to-business (B2B) models, which recorded $137 million compared with $62 million for business-to-consumer (B2C) startups.

Gender and deal-size dynamics

The Wamda and Digital Digest data drew attention to a stark gender gap in fundraising for the month. "All the funds raised went to male-led or mixed-gender teams, while no female-founded startups received any capital during the month," the report said, underscoring persistent challenges for women founders in the region’s venture ecosystem.

Analysts and market watchers will note the absence of mega-rounds—often the largest contributor to monthly totals—helped drive the decline in headline funding. With a heavier share of activity concentrated in smaller, early-stage transactions, overall dollars deployed fell even as deal counts remained meaningful at 62.

Outlook

The February figures, compiled for Zawya by Wamda and Digital Digest and reported by Cleofe Maceda with editing by Seban Scaria, suggest a cautious investor stance as appetite for blockbuster rounds wanes. If the trend toward smaller, equity-led, B2B-focused rounds continues, month-to-month volatility in capital totals is likely to persist. Observers will be watching whether larger follow-on and growth rounds reappear in coming months to restore the scale of capital flows seen in prior periods.