In a striking downturn for the Middle East and North Africa (MENA) startup ecosystem, funding dropped by a staggering 82% in June 2025, amounting to just $52 million across 37 deals. This marks the steepest monthly decline in the region over the past year, raising concerns among investors and entrepreneurs alike.
The significant reduction in funding reflects broader economic challenges and a cautious approach from investors amid global uncertainties. Compared to previous months, where MENA startups saw more robust investments, June's figures indicate a potential shift in investor confidence.
Despite the downturn, certain sectors such as fintech and healthtech continued to attract some attention, though at much lower levels. Analysts suggest that the drop may be attributed to a combination of geopolitical tensions and a tightening of venture capital globally.
Industry experts are now questioning whether this sharp decline is a temporary setback or a sign of deeper issues within the MENA startup landscape. Many are calling for increased government support and incentives to bolster innovation and attract foreign investment.
Startups in the region are feeling the pinch, with several early-stage companies struggling to secure the necessary capital to scale. This funding crunch could lead to a slowdown in innovation and job creation, key drivers of economic growth in MENA countries.
As the region looks ahead, stakeholders remain hopeful that strategic partnerships and a focus on sustainable business models will help reverse the trend. The coming months will be critical in determining whether MENA can regain its momentum in the global startup arena, with all eyes on investor sentiment.
Alfred Lee
