RIYADH – The second quarter of 2025 kicked off with robust activity in the Middle East and North Africa (MENA) startup ecosystem, showcasing a wave of funding rounds, acquisitions, and strategic mergers that underline investor confidence across sectors like fintech, food tech, health tech, and SaaS. Saudi Arabia and the UAE remain regional leaders, positioning themselves as key innovation hubs.
Saudi Arabia’s Fintech Spotlight: Erad and Techrar
Erad, a Saudi fintech startup founded in 2022 by Salem Abu-Hammour, Faris Yaghmour, Abdulmalik Al-Meheini, and Youssef Said, secured $16 million in a pre-Series A round. Investors include Y Combinator, Nuwa Capital, Khwarizmi Ventures, and Aljazira Capital. Erad delivers Shariah-compliant, data-driven financing to micro, small, and medium enterprises (MSMEs) in Saudi Arabia and the UAE. Its platform claims to provide funding access within 48 hours, supporting SME growth in alignment with Saudi Vision 2030. Abu-Hammour emphasized the firm’s role in fostering financial inclusion, noting over 60% of their customers are first-time credit seekers.
Techrar, a Saudi subscription and billing management platform founded in 2022 by Safwan Saigh, Fawzan Al-Khlawi, and Rania Shaker, raised $1.6 million led by Wa’ed Ventures (Aramco’s VC arm). The funds will enhance product development and expand its customer base.
Major Capital Moves: iMENA Group and STV
Saudi-based iMENA Group raised a substantial $135 million in a pre-IPO funding round, involving private placements and in-kind contributions from Sanabil Investments, FJ Labs, and entrepreneur Saygin Yalcin. Founded in 2012 by Nasir Al-Sharif, Khaldoon Tabaza, and Adey Salamin, iMENA owns platforms like OpenSooq and SellAnyCar. The capital infusion aims to boost stakes in core businesses, expand vertically and geographically, and streamline operational synergies.
STV announced the final close of its $100 million STV NICE Fund I, a Shariah-compliant non-dilutive capital vehicle to fuel tech startups in Saudi Arabia. Backed by SAB Invest’s Alternative Financing Fund and regional family offices, this initiative addresses financing gaps with compliant funding solutions for early- and growth-stage ventures.
UAE and Regional Highlights
UAE fintech Fuze raised $12.2 million in a Series A round led by Galaxy and e& capital, with Further Ventures participating. Founded in 2023, Fuze offers Digital-assets-as-a-Service, OTC trading, and stablecoin infrastructure, processing over $2 billion in volume to date. The funding supports global expansion and product enhancement.
Food tech startup Calo, founded in Bahrain in 2019 by Ahmed Al-Rawi and Moayed Al-Moayed, expanded into the UK by acquiring Fresh Fitness Food and Detox Kitchen. Calo provides personalized healthy meal subscriptions across the GCC and plans a Saudi IPO by 2027. The company raised $25 million in a Series B round in late 2023.
Mergers and Emerging Players
Miran, an AI-driven health and fitness app, merged with Welnes, a fitness community platform backed by Flat6Labs and others. The combined entity aims to deliver a comprehensive wellness platform for the growing Saudi market.
UAE fintech Zest Equity raised $4.3 million in pre-Series A funding led by Prosus Ventures to expand its secondary shares platform in Saudi Arabia and UAE, following a $3.8 million seed round.
US SaaS startup BloomPath secured $1.3 million in pre-seed funding to develop AI-powered workflow analytics, while UAE-based e-commerce startup Hushday raised $550,000 to launch a premium retail platform focused on luxury brand excess inventory.
Iraq’s Automotive Tech Growth
Iraq’s iQ Cars raised a seven-figure seed round from Euphrates Ventures to scale its automotive marketplace, featuring 34,000+ listings and 1,000 dealerships. Founded in 2020 by Amer Salih, it is Iraq’s first private joint stock company and plans national expansion with a focus on transparency and innovation.
