Startups in the Middle East raised a record $1.2 billion last quarter, defying a collapse in broader emerging market funding, as international investors wrote bigger checks for growth-stage companies, according to data platform Magnitt.
Funding rose by about 60% in the third quarter from the second and almost quadrupled from a year ago, fueled by so-called mega deals worth more than $100 million, the firm said.
Foreign investors deployed more capital than local backers for the first time in recent years as funds from abroad increasingly look to help firms scale, Magnitt added.
That performance bucks a dramatic downturn in other emerging markets. Southeast Asia posted its weakest quarter in more than seven years, while Africa drew the least funding since 2020 amid tariff shocks and policy uncertainty.
“The Middle East is defying gravity thanks to sovereign initiatives, record-breaking mega deals and rising participation from international investors,” Magnitt said in a quarterly report released on Tuesday.
It described the outperformance as “staggering” and said Southeast Asia and Africa risk falling further behind if global shocks continue into 2026.
“The resilience of EVM ecosystems now depends less on global liquidity cycles alone and more on their ability to mobilize sovereign wealth, implement regulatory reform and forge foreign partnerships.”
Philip Bahoshy, founder and CEO of Magnitt told Bloomberg’s Horizons Middle East and Africa anchor Joumanna Bercetche that across the board appetite is returning to venture as an asset class from both international and regional community.
The Middle East has become a growth engine for emerging venture fundraising after years of sovereign support aimed at driving entrepreneurship and building the startup ecosystem. Regional heavyweights including Saudi Arabia see such companies as critical to developing new industries and supporting economic diversification.
It’s that support that has led the market to evolve and draw more international support from global investors willing to bet on sovereign-anchored ecosystems, according to Magnitt.
Startups in the Middle East also raised a record amount of capital — in excess of $3 billion — on a nine-month basis. The United Arab Emirates attracted the most funding, while Saudi Arabia led in deals, Magnitt said.
Singapore held its lead as the most funded emerging market globally in the first nine months of 2025, though fundraising was still down almost a third year on year as mega deals dried up.
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