Blockbusters mask fragility as July VC surge in MENA hinges on two mega‑rounds

July 2025 brought a striking rebound for the Middle East and North Africa’s startup scene, though the glow was perhaps a touch misleading. Market trackers logged about $783 million in venture capital across 57 deals, a jump of roughly 1,411% from June. The surge looked impressive on the surface, but it hinged on a handful of very large rounds, which makes the overall picture feel volatile when you view it through a single month rather than a longer horizon.

Two mega‑rounds — led by Ninja and XPANCEO — dominated the month’s money, effectively pulling the overall figure along. Saudi Arabia turned out to be the top recipient by value, pulling in about $396.5 million from 16 deals, while the United Arab Emirates posted the highest deal count with 22 transactions. Other notable entries in market chatter included Calo’s $39 million extension and Lucidya’s $30 million Series B, all contributing to the big headline number.

Observers are split on what this mix says about investor appetite. Some analysts highlight renewed interest in fintech, logistics, and clean‑tech, buoyed by resilient macro conditions and government innovation programs. Others see a slightly different tilt, pointing to deeptech and e‑commerce as July’s standout beneficiaries, with fintech activity cooling a bit versus earlier months. The disagreement underscores a broader point repeatedly raised by ecosystem watchers: monthly totals can obscure real shifts in sectoral dynamics across stages.

The spike also revived familiar debates about concentration risk in MENA capital markets. Wamda and others warned that outsized, late‑stage rounds can disproportionately inflate monthly totals, urging attention to early‑stage activity to judge whether momentum is structural. Economy Middle East and Arab News echoed that caution, suggesting policymakers and investors should track deal composition over several quarters before declaring a durable upswing.

Against that backdrop, a concurrent July–August narrative highlighted how corporate philanthropy and strategic partnerships are being used to tackle social and ecosystem gaps. On 12 August, The Coca‑Cola Foundation announced a joint effort with Lesser App — a women‑founded Saudi environmental technology venture run by Naqaa Solutions for Environmental Services — under a program called the Partnership for A Circular Tomorrow (PACT). The foundation said it would provide an initial US$1 million grant to scale PET plastic collection activities in Riyadh and Jeddah, set up community drop‑off centers, install collection bins, and deliver a sustainability dashboard for tracking impact. Lesser App would handle logistics and the dashboard rollout.

The partnership was framed as aligning with environmental goals and women‑empowerment priorities. Coverage noted that the timing aligns with Saudi Arabia’s Vision 2030 aims to boost women’s participation in the workforce and to expand support for small and medium‑sized enterprises and entrepreneurs. The Vision 2030 portal itself lists programs and institutions — including Monsha’at and targeted training initiatives — intended to foster female entrepreneurship and broaden financing access.

Yet the arrangement also spotlights a persistent inequality: female‑led startups in the region still receive a disproportionately small slice of venture funding. Wamda and other observers have repeatedly flagged a gender funding gap even during record‑flow months, arguing that corporate grants and prize funding, while valuable, do not substitute for steady access to growth capital and market channels. Some say collaborations like Coca‑Cola Foundation’s PACT can help bridge gaps in market access and capacity for women‑led ventures, but systemic change will require coordinated policy, investor mandates, and a stronger pipeline.

For founders and investors, July’s numbers carry two clear messages. First, the region can still attract very large checks for homegrown champions, signaling top‑end maturation. Second, headline totals must be read in tandem with the stage and sector breakdowns: a couple blockbuster rounds don’t automatically mean a broad‑based revival for early‑stage startups. Market participants and policymakers will be watching the second half of 2025 for follow‑through — whether seed and Series A volumes rise, whether sector interest stabilizes, and whether targeted interventions actually close structural gaps like the gender funding imbalance.

If July’s surge marks the start of a structural shift, its durability will show up in a steadier stream of mid‑ and early‑stage rounds and in clearer evidence that government programs and corporate partnerships translate into real market access for under‑served founders. If, instead, the month proves an outlier, the region will need to guard against complacency and double down on policies and investments that deepen the entire venture pipeline rather than letting the apex do all the heavy lifting.

Source: Noah Wire Services