GCC sees massive surge in high-value startup funding deals in early months of 2025
The surge in investments, which include both equity and debt funding, comes despite many other regions, including the West and India, still seeing a slowdown in private and venture capital funding.
Importantly, the momentum seems to be continuing into the second quarter as well, with erad, a Riyadh-headquartered alternative financing platform for SMEs, striking a $16 million equity investment deal in a pre-Series A round.
The company is expected to announce the deal, involving leading global and regional funds, including YCombinator, Nuwa Capital, Khwarizmi Ventures and Aljazira Capital, on Wednesday, April 30.
The $160 million Series E round funding by leading BNPL (Buy Now, Pay Later) player Tabby, the $69 million Series A round funding by Flow48, a logistics sector startup, the $28 million each funding by Ula.me, an e-commerce platform, and Merit Incentives, a Dubai-based globally operating engagement technology venture, in their Series B rounds, and the $25 billion funding by Calo, a leading foodtech startup, in a Series B round are among the high-profile investment deals struck by startup ventures in the region.
The Riyadh-headquartered Lendo, a fintech venture, secured a massive $690 million in a debt financing round in January this year. The financing facility, extended by J.P. Morgan, was supported by Fintech Saudi, a Saudi initiative.
Sector experts said the rising trend of high-value startup funding in the region, especially in the UAE and Saudi Arabia, is expected to continue in the coming quarters of this year.
The relatively stable and growing economic and market conditions in the two countries, along with investor and industry-friendly policies being pursued by the respective governments, are driving global investor interests in the region, they said.
GCC startups gain momentum
Industry experts said the surge in high-value PE and VC investments is due to the strong interest in fintech, foodtech, and other growth sectors within the GCC startup ecosystem.
Among the sectors, fintech seems to be the top preferred sector for investors, they said, citing the latest example of erad, the Saudi-based alternative financing platform, striking $16 million investments with a clutch of global and regional investors.
The pre-Series A round of erad was backed by leading global and regional funds, including YCombinator, Nuwa Capital, Khwarizmi Ventures, Aljazira Capital, VentureSouq, Oraseya Capital, and Joa Capital.
The fresh funding is to be used by the Saudi fintech to fuel its mission to offer fast and flexible financing solutions to underserved small and medium-sized businesses through its proprietary, data-driven financing platform.
Salem Abu-Hammour, Co-founder of erad, said while SMEs continue to power the GCC economy, entrepreneurs in retail, F&B, healthcare, and beyond struggle to secure the capital they need to scale up.
'Over 60 per cent of our customers are first-time credit takers and we are proud to be partners in their growth, while fostering financial inclusion,' he said.
Sector experts said the huge credit gap in the SME sector in the GCC – estimated to the tune of $250 billion – seems to be the major attraction for investors to fund promising startups in the region as the massive capital gap offers great growth potentials for them.
Q1 investment momentum
Among the high-profile investment deals concluded in the initial months of 2025 are Tabby's $160 million Series E round in mid-February.
The latest funding round also significantly boosted the company's valuation, doubling it to $3.3 billion. The round was led by Blue Pool Capital and Hassana Investment Company.
Leading logistics sector startup Flow48 also struck a new investment deal in February this year, securing $69 million in a Series A round. The fintech startup providing financing to SMEs secured the funding from a clutch of investors led by Breega and included PE and VC firms such as 212, Speedinvest, Daphni, Endeavor Catalyst, Evolution Ventures, and Plus VC.
February seemed to be a favourable month for startups in the region, with three ventures in different sectors – Ula.me, Merit Incentives and The Game Company – striking deals to raise significant investments.
Ula.me, an e-commerce platform with major operations in the UAE and the wider GCC and MENA region, struck deals with a slew of investment firms such as Rua Growth Fund, Jordan Capital & Investment Fund and Foursan Group to raise $28 million in a Series B round.
The Dubai-based, globally operating engagement technology company Merit Incentives also struck deals with a clutch of leading investment firms led by Alistithmar Capital and Tech Invest Com to raise $28 million in a Series B round in the month.
Other investors in the venture included Endeavor Catalyst, Salica Investments, and Stride Ventures.
Dubai-based The Game Company also reportedly raised $10 million to launch a cloud gaming platform in February this year.
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