UAE retakes regional VC funding crown on mega-round strength

The United Arab Emirates has reclaimed its role as the leading venture capital (VC) funding hub in the Middle East and North Africa (MENA) region, surpassing Saudi Arabia in the first half of 2026. According to PitchBook's H1 2026 MENA Private Capital Breakdown, the UAE raised a total of $1.3 billion in VC investments by the end of June, marking a significant rebound from the stagnant levels seen in the previous year.

In contrast, Saudi Arabia saw a tripling of investment during the same period, but the value of deals for Saudi startups has since dropped to around $200 million for H1. While the pace of dealmaking in the UAE remains slower than in 2025, it has still outpaced the rest of the region by a narrow margin. The surge in funding can be attributed to a few massive rounds of investment.

In June, ADCN led a $275 million investment in Cadena, a Dubai-based firm specializing in international expansion and overseas revenue growth. That same month, CargoX, an autonomous delivery startup, secured $250 million in funding led by BlueFive Capital. Earlier in the year, asset manager Al Ma'mal led a $230 million round for Mal, an Islamic digital bank based in the UAE, adding to the top three deals in the region this year.

Despite a slowdown in dealmaking overall, MENA VC deal value remains resilient, tracking just below the $2 billion mark seen in 2025's first six months. However, the ongoing Iran conflict has introduced uncertainty, particularly for foreign investors. As a result, the number of deals is lagging behind last year's figures, and the time taken to close deals has increased, with the median time between rounds stretching from 1.6 to 1.7 years.

With the conflict showing no signs of resolution, the region may face further slowdowns in the coming months due to more stringent due diligence processes and extended fundraising cycles.