Follow The Money: What MENA Investors Are Betting On In 2025

The entrepreneurial landscape in the MENA is undergoing a transformative shift, and 2025 looks set to be a pivotal year for investors focused on the region.

As entrepreneurs step up to tackle complex challenges in the region, there’s immense potential in this landscape to support ventures that are bringing forward-thinking solutions to some of the MENA’s most pressing issues.

To understand the trends shaping MENA’s investment landscape, Inc. Arabia spoke with leading investors who are at the forefront of these changes in the region.

These include Bilal Baloch, partner at the UAE-based investment firm Shorooq, Dhekra Khelifi, partner at Tunisia’s 216 Capital Ventures, Aly El Shalakany, managing director for Egypt and North Africa at the Africa-focused venture capital (VC) firm, 54 Collective, Medea Nocentini, senior partner at the UAE-headquartered Global Ventures, and Christos Mastoras, managing partner of the GCC-focused Iliad Partners.

One of the key shifts in the MENA investment landscape has been a growing focus on smaller funding rounds, despite an overall decline in venture capital activity. Global Ventures’ Nocentini notes that the region is seeing a decrease in mega-deals exceeding US$100 million– a sentiment reflected in venture data platform MAGNiTT’s FY2024 Emerging Venture Markets Venture Investment Summary. “In 2024, $1–5 million funding rounds saw its fourth consecutive growth across the region, signaling a shift in ticket sizes,” Nocentini points out. “We expect this trend to continue in Q1 this year.”

At the same time, investor interest in the MENA region is growing, she adds. “In 2024, the number of active investors in MENA increased by 20 percent, with the region being the only emerging market to experience an increase in deals,” Nocentini says. “This emphasizes the growing interest in and maturation of the market, which we expect to continue.”At the same time, investor interest in the MENA region is growing, she adds. “In 2024, the number of active investors in MENA increased by 20 percent, with the region being the only emerging market to experience an increase in deals,” Nocentini says. “This emphasizes the growing interest in and maturation of the market, which we expect to continue.”

All of the investors we spoke to highlighted fintech as a sector that continued to dominate investment trends in 2024, and they expect it will continue to attract investment dollars in 2025, owing to its ability to bridge the region’s banked and unbanked populations. They also noted artificial intelligence (AI) as the breakout star of 2024, with the expectation that its various applications to continue to perform well into 2025.

216 Capital Ventures’ Khelifi notes that, funding declines notwithstanding, sectors like fintech and AI have continued to garner significant attention from investors. “Despite a decline in VC funding, we’ve observed increased focus on fintech sectors to meet growing market demands for digital payments and banking services. AI stands out as the year’s highlight, particularly in Saudi Arabia and the UAE,” she says. “These countries are increasingly committed to becoming global AI innovation hubs, creating infrastructure and incentives for both local and international startups.”

54 Collective’s El Shalakany agrees, noting that he expects generative AI to continue to dominate investment and business into 2025. “When ChatGPT was launched for public use in November 2022, this was really the big bang moment for generative AI as a foundational technology, and this trend has continued to dominate ever since,” he says. “I expect this trend to continue, but to move into a new phase, where there is greater importance of proprietary data, there will be increased establishment of monetization norms and practices and there will be a proliferation of specialized apps.” He also expects that, with the new US President Donald Trump starting his term, more deregulation and proliferation of crypto can be expected, which he believes “should be a rising tide that lifts all boats for blockchain and Web3.”

The coupling of fintech with technologies like AI with blockchain and Web3 will also likely unlock new frontiers for both investors and entrepreneurs, Shorooq’s Baloch says. According to him, as these technologies are integrated and mainstreamed, they will foster greater decentralization, transparency,and new digital assets. “For regions like the GCC, where financial inclusivity and cross-border trade are central to economic growth, these technologies can break down traditional barriers and unlock unprecedented opportunities,” he adds.

As far as regional focus goes, the investors we spoke to point to the rise of the UAE and Saudi Arabia as hubs for both entrepreneurship and innovation, with the expectation that they will continue to act as focal points for both investors and startups in the region. Reflecting on the past year, Iliad Partners’ Mastoras highlights that Saudi Arabia and the UAE are driving the growth of the regional startup ecosystem and the venture capital landscape – a trend that he expects to continue moving forward.

“In recent years, and in 2024 in particular, we have witnessed the dynamic emergence of Saudi Arabia as a leading market with remarkable growth,” Mastoras says. “We expect this to continue in 2025 and beyond, driven by strong macroeconomic fundamentals, the growth of the digital economy, favorable demographics, a maturing regulatory environment, supportive government initiatives, and national-level strategies, and fundamentally, a vibrant talent pool from which strong startup founders are emerging.”

This article first appeared in the January/February issue of Inc. Arabia magazine. To read the full issue online, click here.