Technology startups in the UAE raised $872 million in the first quarter of 2025, a staggering 194% increase compared to the same period last year, according to Tracxn’s Q1 2025 UAE Tech Funding Report. The country’s tech ecosystem has witnessed a significant rebound in venture funding, driven by an influx of late-stage capital and an increase in mega-deals exceeding $100 million.
The funding surge in Q1 2025 represents an 865% increase from the $90.5 million raised in Q1 2024. The report attributes this sharp rise to growing investor confidence, particularly in key sectors such as enterprise applications, fintech, and retail, which are driving investment momentum.
Seed-stage funding in Q1 2025 amounted to $23.4 million, marking a 77% decline compared to Q4 2024 and a 62% drop from Q1 2024. Early-stage investments reached $89 million, a modest 8% decrease from Q4 2024 but a 202% increase compared to Q1 2024. The bulk of the funding, however, came from late-stage investments, which saw $760 million raised—an impressive 660% increase from the $100 million raised in Q4 2024.
Sector Breakdown and Key Deals
Enterprise applications led the funding surge, securing $688.1 million in Q1 2025, a 664% increase from Q4 2024 and a 1,111% rise compared to Q1 2024. The fintech sector followed with $215.6 million, a 73% increase from Q4 2024 and a 574% jump from Q1 2024. The retail sector saw $171.5 million in funding, a 134% rise from Q4 2024 and an astounding 13,092% increase from Q1 2024.
In Q1 2025, two funding rounds exceeded $100 million, compared to one such round in Q4 2024 and none in Q1 2024. Notable deals included Tabby, which raised $160 million in a Series E round led by Blue Pool Capital, bringing its valuation to over $3.3 billion. Vista Global also secured $600 million in a late-stage round led by RRJ Capital.
Acquisitions and Market Trends
The UAE saw six tech company acquisitions in Q1 2025, maintaining the same level as the previous year. The highest-valued acquisition was Cartlow, acquired by Basatne, followed by the acquisition of HotCold Studio by Grandstores.
Dubai-based tech companies accounted for 96% of all funding in the UAE, solidifying the city’s position as the leading hub for venture capital in the region. Key investors in the UAE’s tech ecosystem included 500 Global, Wamda Capital, and Middle East Venture Partners, with Oraseya Capital, Plus VC, and Endeavor leading seed-stage investments.
Looking Ahead
The surge in Q1 2025 reflects the growing maturity of the UAE’s tech sector, driven by significant late-stage investments and high-value deals in enterprise applications, fintech, and retail. While seed-stage investments have declined, the dominance of Dubai in attracting capital and a steady stream of acquisitions signal continued growth and development in the region’s tech ecosystem.
