AI start-up Mal carries Middle East FinTech in H1 with mega-funding round

FinTech funding in the Middle East and North Africa (Mena) experienced a modest 9% decrease year-over-year in the first half of 2026, reaching $617 million, according to Dubai-based data firm Magnitt. The Dubai-based startup Mal, which is developing the world's first AI-native Islamic digital bank, accounted for a remarkable 37% of the total FinTech funding in the region during the same period, securing $230 million.

This mega-funding round contributed significantly to the overall funding, as Mena FinTech companies raised a total of $387 million during the first half of the year. Despite the number of deals dropping to 57 transactions, investors demonstrated strong support by allocating larger sums of capital to fewer companies compared to the first half of the previous year.

A noteworthy observation is that deals worth less than $100 million made up 62.7% of the total funding, compared to almost 80% in the same period of the previous year, indicating a concentration of funding at the top of the market. Philip Bahoshy, founder and CEO of Magnitt, noted that the decline in FinTech funding can be attributed to fewer large rounds funded by a single investor and market, rather than a substantial slowdown in investment activity across the broader FinTech ecosystem.

The UAE and Saudi Arabia together captured 85% of FinTech funding in the first half of 2026, highlighting the geographical concentration of capital in these markets. In the UAE's FinTech landscape, Fasset secured a $51 million funding round, while Saudi Arabia witnessed significant investments from Madfu and Stitch, which raised $26 million and $25 million respectively.

These three transactions accounted for $102 million, less than half of the total funding secured by Mal, underscoring Mal's dominant position in the regional FinTech market. The report also reveals that 28% of deals focused on payment solutions, making it the leading FinTech sub-industry. However, the significant decline in the overall number of transactions suggests that investors are becoming more selective in their investment decisions.

As such, the second half of 2026 will serve as a crucial determinant of whether investment activity will broaden across more companies and markets, or continue to remain concentrated in a handful of large transactions.