Saudi Arabia returned to the top of MENA’s startup funding rankings in July, while e-commerce emerged as the region’s leading funded sector. However, the overall funding environment remained cautious, with debt accounting for more than half of total capital raised.
Startups across the Middle East and North Africa (MENA) raised $172.6 million across 45 funding deals in July 2026, according to the latest funding report from Wamda. The figure represents a 16% increase from June, but remains 78% below July 2025, highlighting the continued caution among investors.
The increase was also driven largely by debt financing. Debt accounted for 56% of total startup funding in July, compared with 11.5% in June and only 2% in July 2025. This suggests that while capital availability improved from the previous month, equity investment has yet to see a significant recovery.
Saudi Arabia Reclaims the Funding Lead
Saudi Arabia returned to the top of the regional startup funding rankings after not leading during the first half of 2026.
Startups in the Kingdom raised $106.6 million across 16 transactions, representing nearly 62% of all MENA startup funding in July. The UAE recorded the same number of deals but attracted $46.6 million, placing it second by total funding.
Syria ranked third with $10.16 million, while Egypt recorded $7.25 million across eight deals. Morocco and Qatar followed with smaller funding volumes.
Saudi Arabia and the UAE together accounted for almost 89% of all capital raised across MENA during the month, underlining the continued concentration of startup investment within the region’s leading ecosystems.
E-Commerce Takes the Largest Share
E-commerce was the leading sector by funding in July, attracting 55% of total investment. However, Wamda noted that the result was driven by a limited number of sizeable transactions rather than broad-based funding activity across the sector.
Govtech ranked second, supported by a $15 million funding round for Whiteshield, while super apps ranked third after two startups in Syria and Morocco collectively raised $12 million.
Fintech remained the most active sector by deal count, recording nine transactions worth a combined $10.9 million. Proptech followed with eight deals totaling $11.9 million.
The figures highlight an interesting contrast: fintech continues to generate significant investor activity, while e-commerce is currently attracting the largest amounts of capital through fewer, larger transactions.
Early-Stage Startups Continue to Attract Capital
July also showed continued investor interest in early-stage companies.
A total of 33 early-stage startups raised $49 million, while no mega deals or late-stage funding rounds were announced during the month.
The absence of large late-stage transactions contributed to the relatively modest overall funding total. At the same time, continued activity at the early stage indicates that investors remain willing to back new companies, although with smaller capital commitments.
B2B Models Dominate Funding
Business-focused startups captured the majority of investment in July.
B2B startups raised $136 million across 33 transactions, representing nearly 79% of all capital deployed during the month. Consumer-focused startups raised $13.3 million across five deals, while startups serving both businesses and consumers attracted $23.3 million through seven transactions.
The strong performance of B2B companies reflects investors’ continued preference for business models with clearer revenue visibility and more predictable customer economics amid an uncertain funding environment.
Funding Gap for Female Founders Persists
The funding data also highlighted the persistent gender gap within the MENA startup ecosystem.
Startups founded solely by women raised only $1.7 million across four transactions, representing less than 1% of total funding in July. Male-founded startups received 97% of all capital, while mixed-gender founding teams raised approximately $3 million.
The figures indicate that greater participation by female founders has yet to translate into a proportional share of venture capital across the region.
A Cautious Start to the Second Half of 2026
July’s funding figures point to a modest improvement in MENA’s startup investment environment, but they do not yet signal a broad recovery.
Funding increased from June, Saudi Arabia reclaimed its regional leadership, and e-commerce emerged as the largest funded sector. Yet the heavy reliance on debt, the absence of mega and late-stage rounds, and the concentration of capital in Saudi Arabia and the UAE show that investors remain selective.
As the second half of 2026 progresses, the return of larger equity rounds and a wider distribution of funding across countries, sectors and founder profiles will be key indicators of whether MENA’s startup ecosystem is moving toward a stronger recovery.
