Dubai-based firms dominated the funding landscape, accounting for 93 per cent of total capital raised, with Abu Dhabi trailing as a distant second. Notably, two companies — Vista Global and Tabby — secured funding rounds exceeding $100 million. Vista Global attracted $600 million in a private equity round, while Tabby secured $160 million in a Series E round. These mega-deals alone accounted for over 75 per cent of the total capital raised, reflecting continued investor confidence in high-growth UAE-based startups.
Despite the headline growth, the report also pointed to areas of concern, particularly in early-stage and seed-stage investment activity. Seed-stage funding plunged 74 per cent to $32.7 million compared to $125 million in H2 2024 and fell 71 per cent compared to $111 million in H1 2024. Early-stage funding reached $167 million, down 13 per cent from H2 2024 but showing a slight four per cent uptick from H1 2024. The real momentum, however, came from late-stage deals, which surged to $817 million — an increase of 583 per cent over H2 2024.
Sectoral performance varied widely. Enterprise Applications led with $728 million in total funding, a 543 per cent rise over H2 2024, though still down 56 per cent from H1 2024. FinTech saw an impressive 47 per cent jump to $286 million, while Retail tech funding increased 20 per cent to $172 million. Compared to the same period in 2024, FinTech and Retail recorded 276 per cent and 275 per cent growth respectively, reflecting growing investor appetite in consumer and financial services innovation.
However, the first half of 2025 did not witness the creation of any new unicorns, continuing a trend seen in both halves of 2024. This absence highlights the capital’s current focus on scaling existing ventures rather than propelling early-stage startups to billion-dollar valuations. In terms of exits, only one UAE tech company — Micropolis — went public during the period.
Mergers and acquisitions continued at a steady pace with nine deals recorded in H1 2025, slightly lower than the 10 deals each in H2 and H1 2024. Notable transactions included Hokoworld’s acquisition of Everdome, Saronic’s takeover of Gulf Craft, and Dubizzle Group’s acquisition of Property Monitor.
The report also identified the leading investors across different funding stages. 500 Global, Wamda Capital, and Middle East Venture Partners emerged as the most active overall investors. Oraseya Capital, Plus VC, and Endeavor dominated the seed stage, while e&, Flourish, and MoreThan Capital Advisors were prominent in early-stage rounds. At the late-stage level, Saudi Arabia-based STV stood out, adding one UAE company to its portfolio.
Industry analysts note that the surge in late-stage funding reflects a maturing ecosystem where investors are increasingly drawn to proven business models and scalable platforms. The growth also aligns with the UAE government’s strategic push to foster a knowledge-based economy, backed by digital transformation initiatives and supportive regulatory frameworks.
While seed-stage contraction signals caution among early investors, the UAE’s strong late-stage activity and sectoral resilience suggest that the ecosystem remains well positioned for sustained growth. As Dubai continues to attract capital, talent, and global partnerships, the emirate is cementing its status as a leading tech hub not just in the region but on the world stage.
The report noted that the remainder of 2025 will be critical in determining whether this momentum translates into new unicorns, deeper early-stage investment, and a broader diversification of capital across emerging sectors such as AI, clean tech, and mobility.
is Managing Editor at media and has over 45 years of experience in top-tier newspapers across UAE. A seasoned business writer and economic analyst, he brings unmatched insight into the geopolitics and geoeconomics shaping the Gulf and India.
issacjohn@khaleejtimes.com