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UAE tech funding surges to $1 billion in H1 2025, outpacing Japan and Sweden
The UAE tech ecosystem saw a 133% funding increase from H2 2024, reaffirming its status as a MENA powerhouse despite no new unicorns or IPO momentum
- PUBLISHED: Fri 8 Aug 2025, 6:00 PM
The UAE outpaced mature ecosystems like Japan and Sweden in total tech funding as it received $1 billion investment during the first half of 2025, boosted by $100 million plus deals and sectoral strength, latest data shows.
Tracxn Technologies, a data intelligence platform for private market research, said the funding landscape continues to be driven by late-stage investments and strong performances across sectors such as enterprise applications, fintech, and retail.
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"A total of $1 billion was raised during the January-June 2025, marking an increase of 133% compared to $438 million raised in second half of 2024. However, this also reflects a drop of 43% compared to $1.8 billion raised in first half of 2024," according to the report.
The significant half-yearly recovery places the UAE among the most active tech ecosystems in the Middle East and North Africa (Mena) region during the first half of 2025.
Late-stage funding
The report noted that seed stage saw a total funding of $32.7 million in January-June 2025, representing a drop of 74% compared to $125 million raised in July-December 2024, and a drop of 71% compared to $111 million raised in first half of 2024.
"Early-stage funding amounted to $167 million in first half of 2025, reflecting a drop of 13% compared to $193 million raised in second half of 2024, and an increase of 4% compared to $160 million raised in first half of 2024," according to the report.
Late stage witnessed a total funding of $817 million in first half of 2025, which is an increase of 583% compared to $120 million raised in second half of 2024, and a drop of 46% compared to $1.5 billion raised in first half of 2024.
The enterprise applications sector saw a total funding of $728 million in first half of 2025, which is an increase of 543% when compared to $113 million raised in second half of 2024 and a drop of 56% when compared to $1.7 billion raised in first half of 2024. The fintech sector recorded a total funding of $286 million in January-June 2025, reflecting an increase of 47% compared to $195 million raised in July-December 2024 and an increase of 276% compared to $76.2 million raised in first half of 2024.
The retail sector saw a total funding of $172 million in first half of 2025, representing an increase of 20% compared to $144 million raised in second half of 2024 and a rise of 275% compared to $46 million raised in first half of 2024.
Mega Deals, No Unicorn
Tracxn Technologies recorded that first half of 2025 witnessed two $100 million plus funding rounds, compared to one such round in second half of 2024 and first half of 2024. Companies like Vista Global and Tabby managed to raise funds above $100 million in this period. Vista Global raised a total of $600 million in a private equity round, while Tabby secured $160 million in a Series E round.
"A major part of these $100 million plus funding rounds came from enterprise applications, retail, and fintech. Micropolis was the only company that went public in first half of 2025," according to the report.
The report noticed that no unicorn was created in first half of 2025, second half of 2024, and first half of 2024. Tech companies in the UAE saw nine acquisitions in first half of 2025, which is a 10% decrease as compared to 10 acquisitions in both second half of 2024 and first half of 2024. Among the notable acquisitions in first half of 2025, Everdome was acquired by Hokoworld, Gulf Craft was acquired by Saronic, and Property Monitor was acquired by Dubizzle Group.
Dubai-based tech firms accounted for 93% of all funding seen by tech companies across the UAE. This was followed by Abu Dhabi at a distant second in terms of funding concentration. 500 Global, Wamda Capital, and Middle East Venture Partners were the overall top investors in the UAE tech ecosystem. Oraseya Capital, Plus VC, and Endeavor were the top seed stage investors in the UAE tech ecosystem for first half of 2025. e&, Flourish, and MoreThan Capital Advisors were the top early stage investors in the UAE tech ecosystem for first half of 2025 while STV emerged as the top late-stage investor.
The report said UAE tech ecosystem witnessed a significant recovery in first half of 2025, driven by a surge in late-stage funding and strong performances across enterprise applications, fintech, and retail sectors. While seed-stage investments contracted sharply, the presence of multiple $100 million plus deals helped maintain momentum. With Dubai continuing to dominate funding activity and a steady flow of acquisitions, the region remains a key player in the global tech investment landscape.
Appetite for Late-stage Investment
In another report, Magnitt — the leading data and intelligence platform tracking venture capital and private equity across Emerging Venture Markets (EVMs), said mega deal investments, those greater than $100 million plus, are an indicator of appetite for later-stage investment.
It noticed that first half of 2025 saw two mega deals in Mena, Ninja’s $250 million and Tabby’s $160 million round, which accounted for 27% of total capital deployed, up from 16% in first half of 2024. "This reflects a promising return of investor appetite for late-stage activity, especially in the GCC region. Notably, the share of Series A and B rounds exceeding $20 million jumped to 42%, up from only 10% a year ago. The numbers suggest a growing preference for backing companies with proven traction and scalability, as investors double down on ventures that have moved beyond the idea stage and are ready to accelerate."
Philip Bahoshy, CEO of Magnitt, noted that first-half data shows strong resilience in Mena’s venture ecosystem, particularly in Saudi Arabia and the UAE.
"While macro uncertainties persist, investor appetite remains robust, evidenced by back to back mega deals and unprecedented mergers and acquisitions activity,” he said.
Saudis, UAE Remain the Powerhouses
Despite the onset of Ramadan and Eid, second quartet had notable events and conferences like Dubai AI Week, and the Dubai FinTech Summit, along with the US and Saudi Forum in Riyadh, attended by President Donald Trump. These attracted international investors to the region along with regional dialogue to bolster venture, private equity, and capital investment across the GCC.
"This activity was also reflected in deal flow announcements with Saudi Arabia seeing more investment capital than any country in the region for the third straight H1, raising $860 million (+116% YoY) from 114 transactions (+31% YoY), in part attributed to the return of Mega rounds including by Ninja ($250 million) and Tabby ($160 million)," according to Magnitt report.
The report also pointed out that fintech funding in Mena tripled to $596 million, representing 39% of total capital in first half of 2025. Even excluding mega rounds, the sector led both by funding and deal count. With non-mega fintech funding up 122%, and 30% of all Mena deals falling within the sector, it remains the cornerstone of regional innovation and an investor favourite because of its scalability.
"Startups focused on payments and lending dominated the activity, and a record 34% of fintech deals exceeded $5 million in size. AI is also showing significant growth across industries in the Mena region. In May, we released our inaugural report to map how funding has evolved between 2022 and 2024. The report shows $660 million raised from 322 deals in Mena, with the UAE leading deal activity," according to the report.
