Investment momentum continues amid conflict

By the Editorial Team · Sunday, July 26, 2026

Investment in the MENA startup ecosystem stayed robust last week despite geopolitical tensions, highlighted by key funding rounds such as Saudi Venture Capital's investment in SEEDRA Ventures Fund II and FLOATY Studio's $1 million raise. These activities underscore sustained investor confidence and support for emerging technology sectors, even as Saudi Arabia faces a notable slowdown in overall venture capital funding this year.

Investment activity in the Middle East and North Africa (MENA) region remained resilient last week despite ongoing uncertainty linked to the US-led conflict involving Iran. This continued momentum follows a record-breaking year in 2025 when startups in the region raised $7.5 billion—a 225 percent increase compared to the previous year, according to financial data analysis.

However, a report released earlier in July highlights a contrasting trend in Saudi Arabia’s venture capital landscape. The Kingdom experienced a notable slowdown in the first half of 2026, with total funding amounting to $219 million across 72 deals. This represents a 74 percent decline in funding and a 41 percent reduction in deal volume compared to the same period last year. The decrease is largely attributed to the absence of mega-deals above $100 million and a more cautious global and regional investment climate. Despite this drop, Saudi Arabia maintained its position as the second most active market in the MENA region by transaction volume, capturing a 34 percent share of regional venture deals—consistent with the level seen in early 2025.

Several key investments and fundraising rounds were announced during the week, signaling ongoing investor confidence across sectors in the region. Saudi Venture Capital (SVC) announced its participation in SEEDRA Ventures Fund II, a venture capital fund focused on early-stage, high-growth technology startups within the Kingdom. Founded in 2019, SEEDRA Ventures targets sectors including artificial intelligence, fintech, property technology, Software-as-a-Service, and logistics. SVC CEO Nora Al-Sarhan emphasized that the investment aligns with the fund’s mandate to increase institutional capital availability for Saudi founders at critical development stages and supports the private-sector ambitions of Saudi Arabia’s Vision 2030.

In the gaming sector, Saudi-based mobile game developer FLOATY Studio secured $1 million in a funding round led by Merak Capital through its dedicated $80 million Merak Gaming Fund. The capital injection is intended to accelerate game development, expand the company’s production capabilities, and support its international growth strategy. Merak Capital highlighted the investment as a reflection of confidence in FLOATY Studio’s product vision and the expanding role of Saudi Arabia as a hub for gaming entrepreneurship in the region.

Meanwhile, Syrian technology startup Labby raised $10 million from investors based in the United Arab Emirates and Saudi Arabia. Syrian officials described the deal as the country’s first direct foreign investment into a local tech company, marking a meaningful boost for Syria’s nascent startup ecosystem. Founded in 2024 by Mohammad Fawaz, Labby operates a super app offering integrated consumer services such as ride-hailing, food delivery, e-commerce, and digital payments. The proceeds will be used to enhance the platform’s technology, expand service offerings, upgrade infrastructure, and increase market presence within Syria, while also facilitating talent acquisition and product innovation.

These developments indicate that, despite regional challenges including geopolitical tensions, investment interest in the MENA startup ecosystem remains active and diversified across several technology-driven sectors.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.