At first glance, investment activity across the Middle East and North Africa (MENA) appears to have rebounded strongly in May 2026. Startups in the region raised a combined $454.7 million across 33 deals, marking a 202% month-on-month increase and a 76% rise compared to May 2025.

However, a closer look shows that most of this growth was driven by debt financing, which made up 66% of the total funding raised during the month. Even without counting debt deals, startups still raised more capital and completed more transactions than in April, indicating a slight increase in investor activity.

Yet the year-on-year picture tells a different story. While capital deployment increased, the deal count declined by 57% compared to May 2025, suggesting that investors remain selective, favouring larger transactions over broader market participation amid continued regional uncertainty.

The usual ranking remains unchanged

The UAE maintained its position as the region's most-funded ecosystem in May, attracting $379 million across 15 deals. The figure was largely driven by Trukker's $300 million debt financing, which accounted for nearly 80% of all capital raised in the country during the month.

Saudi Arabia ranked second, with startups securing $70 million across 11 deals. The Kingdom recorded a 167% increase in funding value compared to April, reinforcing its position as one of the region's most active startup ecosystems.

Egypt followed in third place, with three startups raising a combined $5 million. While the country's funding levels remain subdued compared to its regional peers, Egypt continues to feature among the region's leading startup ecosystems by activity and entrepreneurial depth.

 

Logistics leads by value, SaaS by volume

Trukker's financing pushed logistics to the top of the sector rankings, attracting $300 million and accounting for nearly two-thirds of all capital deployed in May.

Fintech ranked second with $105.7 million raised across five deals, followed by HRtech, which secured $17.5 million through two transactions.

In terms of activity, SaaS emerged as the most active sector, recording seven deals worth a combined $1.8 million.

 

Debt dominates as investors favour mature companies

Debt financing remained the dominant funding instrument in May, accounting for $300.5 million across two transactions, or 66% of total capital raised.

Later-stage startups also attracted significant investor interest, with two Series B rounds raising a combined $68.4 million. Meanwhile, 21 startups at pre-seed, seed and Series A stages secured a total of $52.2 million.

B2B startups continue to attract the majority of capital

Business-focused startups remained investors' preferred destination, attracting $371.5 million across 24 deals.

Consumer-focused startups raised $85.7 million through six transactions, while the remaining capital went to startups operating across both B2B and B2C models.

Gender gap widens further

Funding remained heavily concentrated among male-founded startups. Companies founded solely by men secured $442 million across 28 deals.

Meanwhile, only two women-founded startups raised a combined $200,000 during the month. Startups founded by mixed-gender teams attracted approximately $12 million across three deals.

Year-to-date: $1.5 billion raised despite a challenging environment

Five months into 2026, MENA startups have raised approximately $1.5 billion, demonstrating the resilience of the region's entrepreneurial ecosystem despite ongoing geopolitical and macroeconomic challenges.

While funding remains below the exceptional levels seen during previous market peaks, activity has proven relatively resilient, supported by continued investor appetite for high-quality companies, particularly in the Gulf's more mature startup ecosystems.