MENA startup funding plunges 96% to $40M in October as Saudi startups tap venture debt

MENA startup funding in October 2026 fell 96% month on month to $40 million across 32 startups, according to Wamda. September’s total was $1.1 billion.

That is also a 95% drop from the $784.9 million recorded in October 2025, making October one of the weakest months for regional startup funding this year.

The gap is largely a story of what was missing. September was driven by three Saudi fintech deals worth a combined $762.5 million, nearly 70% of that month’s total. October had no megadeals or later-stage rounds.

Saudi Arabia stayed the most-funded market, with nine startups raising $18.8 million, or 47% of the month’s capital. Autobia’s $12 million Series A made up nearly 64% of the Saudi total.

The UAE came second with 10 startups raising $12.9 million. It had more deals than Saudi Arabia but a lower total.

Qatar placed third on a single $5 million transaction. Egypt slipped to fourth with six deals worth $1.7 million, down from seven startups raising $49.2 million in September, when Paymob’s $35 million round carried the total.

Early-stage startups raised $33.7 million across 24 deals, more than 84% of capital and 75% of deal count. Debt was about $550,000 through a single transaction, 1.4% of the total.

Deal count fell by less than value. Transactions fell 56%, from 73 in September to 32 in October. Capital kept flowing to early-stage companies while large commitments were absent.

MENA startups have raised approximately $3.4 billion in the first 10 months of 2026. The remaining two months will test whether investors return to larger transactions.

A second report points to a shift in how Saudi founders are funding growth. Briefs, summarising a Bloomberg report, says Saudi startups are adding venture debt as equity slows and IPOs stall.

The context is a wider slowdown in the kingdom. Per Magnitt data cited by Bloomberg, Saudi VC fundraising fell by nearly one-third to $1 billion in the first nine months of 2026. The UAE rose by almost 20% to above $1.6 billion over the same period.

Briefs also reports that Saudi Arabia’s regulator has not approved any new main-market listings since April.

India’s Stride Ventures is among the lenders. It has put about $90 million into Saudi transactions in roughly a year, per the report, and plans to deploy more than twice that sum in its first two years in Riyadh.

Stride partner Fariha Ansari said, “With equity investors becoming more selective, and founders more protective of their cap tables, we are seeing companies raise debt alongside their next equity round instead of holding it in reserve as a fallback.”

Other lenders are widening the options. Raqamyah, a Saudi debt-crowdfunding platform, has arranged up to $107 million in financing this year, twice its 2025 figure. Erad has seen financing requests exceed $1 billion since opening 18 months ago.

The two sets of figures measure different things: the monthly totals cover all of MENA, while the Magnitt numbers cover Saudi and UAE VC over nine months.

Read together, they describe a region where smaller, earlier deals continue and debt is taking a larger place in Saudi financing. Whether larger equity rounds return is the open question for the final two months of the year.