Why MENA Female-Founded Startups Still Struggle to Access Capital

The MENA region’s startup scene recorded $1.7 billion in venture capital across 242 rounds in the first half of 2026, yet female-founded startups captured just $2.5 million — 0.14% of that total — while male-founded companies raised roughly $1.6 billion across 213 deals. The imbalance persists despite growing female entrepreneurship: Dealroom counts 33 regional unicorns, Wamda’s data shows mixed-gender and female-founded teams accounted for less than 4% of equity transactions in the GCC from 2019–2025, and Abu Dhabi issued 3,058 new business licenses to Emirati women in the first half of 2026.

“Gulf investor networks are still very male-dominated, especially at decision-making levels,” said Lucy Chow, a limited partner at U.K.-based Pact VC and secretary general in the UAE office of the World Business Angels Investment Forum. “That matters because deal flow follows networks. I’ve been saying for years that we need more female check writers, but men have to help solve this too, by actively backing deserving female founders.”

Structural barriers and funding patterns

Investors and founders point to structural issues in how capital is sourced and allocated. Basil Moftah, managing partner at Key Capital, said the VC industry “undoubtedly…is dominated by male general partners or has a majority of male GPs,” adding that while many deny bias, “surely there is a bias in there.” Research from Founders Forum Group supports that composition matters: VC firms with at least one female partner are 2.3 times more likely to invest in female founders, and firms where women make up at least 30% of partners invest 4.7 times more in female-founded companies than all-male firms. Female angels allocate roughly 35% of their investments to female founders, compared with 13% for male angels.

With limited VC interest, many women founders turn to bootstrapping, public grants and alternative capital to bridge funding gaps. Chow noted heavy reliance on public innovation grants from bodies such as Dubai SME and Abu Dhabi’s Khalifa Fund for Enterprise Development. A Mastercard study cited by industry experts found 56% of women entrepreneurs in the UAE run a side hustle to bankroll early concepts.

• Initiatives to build female investor pipelines are emerging: Sophie Smith, founder and CEO of Nabta Health, set up 2022 Female Angels and compiled a public list of 2,022 female angel investors, now managing a list of around 350 active angels with 44 of 79 being female.
• Nabta Health itself closed a $2 million pre-Series A in November, bringing total funding to $4.5 million.
• Programs such as Women Spark in Saudi Arabia focus on training, mentoring and facilitating angel investments into female tech innovators.

Outlook

Experts argue the solution must be framed as capital allocation, not solely a founder issue. “We absolutely have to treat this as a capital allocation problem, not just a founder problem,” Chow said, calling for more women angels, limited partners and investment committee seats, along with government measures that encourage capital flow. Industry figures also call on wealth funds and family offices to earmark allocations to female-led startups. Without meaningful change in who controls capital and how investment decisions are made, the gulf between rising female entrepreneurship and the funding required to scale is likely to persist.