MENA’s startup funding market entered the second half of 2026 with a notable change in the composition of capital. Startups across the region raised $172.6 million across 45 deals in July, up 16% from June but still 78% below the amount raised in July 2025. More significantly, debt accounted for 56% of July’s total funding, compared with 11.5% in June and only 2% in July 2025.
The figures point to a market that is still providing capital, but under more selective conditions. The rise in debt does not mean venture capital has disappeared. Instead, it suggests that founders and investors are increasingly considering different financing instruments depending on a company’s stage, revenue profile, and ability to demonstrate predictable cash flows.
The broader first-half picture reinforces this trend. MENA startups raised $1.7 billion across 242 funding rounds in H1 2026, an 18% decline from the $2.1 billion raised during the same period in 2025. Deal volume also fell, indicating a more cautious market rather than a complete retreat from startup investing.
