Saudi Arabia has become the leading destination for venture capital in emerging markets, overtaking Singapore with $391 million raised in Q1 2025. This marks a 53% year-on-year increase, placing the Kingdom ahead of regions including the Middle East, Africa, Pakistan, Türkiye, and Southeast Asia, according to MAGNiTT.

The surge was driven by fintech unicorn Tabby’s $160 million Series E round, though broader ecosystem growth was also evident. Funding for non-MEGA deals (under $100 million) rose 9% quarter over quarter.

“This consistency signals a strengthening pipeline backed by sovereign LPs like SVC, a growing cohort of accelerators, and successful exits like Rasan’s IPO,” MAGNiTT stated.

Saudi Arabia led the MENA region, accounting for 58% of total venture funding and 41% of deals. Notable gains included an 87% rise in non-mega deal funding and a 437% increase in Series A and B rounds, driven by companies like Ula.me and Merit Incentives.

Regionally, MENA VC funding grew 58% to $678 million, despite a 21% drop in deal count. Improved investor sentiment, post-2024 interest rate cuts, and events like LEAP 2025 contributed to the momentum.

Fintech dominated, capturing 30% of all MENA deals and 57% of funding—a 362% year-on-year increase. Enterprise software followed, with standout transactions from Merit Incentives and Qeen.ai.

Saudi Arabia hosted five of MENA’s 10 largest deals. Major backers included Blue Pool Capital and Hassana Investment Co., which collectively invested over $53 million.

MAGNiTT noted strong IPO and M&A activity in Saudi Arabia: “Saudi Arabia’s IPO and M&A momentum are now integral to the region’s exit environment.”

Yet, global uncertainty looms. “While Q1 2025 was a positive start… that momentum is now under threat,” said MAGNiTT CEO Philip Bahoshy, citing risks from U.S. tariff changes and investor caution.