Morocco Faces Challenges in Attracting Startup Investment in MENA Region
In December 2025, the MENA region's startup funding totaled $171.5 million, marking a 38% year-on-year decline, with Saudi Arabia, Egypt, and the UAE leading investments. Despite this impressive figure, it marked a 38% year-on-year decline and a 24% drop compared to November 2025. The Current State of Startup Funding in MENA In December 2025, the MENA region witnessed a total of $171.5 million raised by 44 startups.
The landscape of startup investment in the Middle East and North Africa (MENA) region presents a complex mix of opportunities and challenges. While countries like Saudi Arabia, Egypt, and the United Arab Emirates (UAE) lead the charge in securing substantial funding, Morocco continues to grapple with hurdles in attracting investment to its burgeoning startup ecosystem.
The Current State of Startup Funding in MENA
In December 2025, the MENA region witnessed a total of $171.5 million raised by 44 startups. Despite this impressive figure, it marked a 38% year-on-year decline and a 24% drop compared to November 2025. The distribution of this funding was notably uneven, with Saudi Arabia, Egypt, and the UAE dominating the landscape.
Saudi Arabia emerged as a frontrunner, with 17 startups securing $115 million. Egypt followed, raising $27.3 million across six rounds, while the UAE managed to garner $21.4 million from 15 transactions. These numbers underscore the selective nature of startup funding in the region, where certain countries and sectors appear to attract more interest from investors.
Challenges and Opportunities for Morocco
Morocco's struggle to attract startup investment is multi-faceted. The country is yet to match the success of its regional counterparts in drawing the attention of venture capitalists and angel investors. This situation calls for strategic interventions, such as government initiatives and networking events, to facilitate connections between startups and potential investors.
One potential avenue for Moroccan startups is crowdfunding, which offers an alternative source of funding for those unable to secure traditional investment. However, the key to attracting any form of investment lies in presenting scalable business models and conducting thorough market research. A compelling pitch deck remains essential for startups aiming to capture investor interest.
The Role of Different Sectors
Analyzing the distribution of funding across sectors reveals notable trends. In December 2025, B2B startups led the charge, raising a significant $154.7 million across 33 rounds. In comparison, the fintech sector, often considered a hotbed of innovation, ranked seventh with just $3.9 million raised. Consumer startups also faced challenges, with only five companies managing to secure a total of $6.3 million.
This sectoral disparity highlights the importance of aligning startup offerings with investor expectations. Investors are increasingly selective, favoring startups that demonstrate clear paths to scalability and profitability.
Addressing the Gender Funding Gap
Another critical aspect of the MENA startup funding landscape is the persistent gender gap. Female-founded startups managed to raise only $116,000, while mixed-gender teams secured $5 million. This stark contrast underscores a broader trend where capital tends to favor male-founded startups.
Addressing this funding gap requires concerted efforts from both investors and policymakers. Encouraging diversity in startup teams and creating targeted funding initiatives for female entrepreneurs could help bridge this divide.
As Morocco seeks to enhance its startup ecosystem, addressing these challenges will be crucial. By fostering a supportive environment, leveraging government initiatives, and encouraging diverse participation, Morocco can work towards closing the investment gap and positioning itself more competitively within the MENA region's dynamic startup landscape.