Technology start-ups in the UAE raised a total of $872 million in the first quarter of 2025, a whopping 194 per cent increase over the same period last year, a report showed.
Tracxn’s Q1 2025 UAE Tech Funding Report highlights a remarkable surge in investment activity across the country’s tech ecosystem. The UAE witnessed a significant rebound in venture funding during the quarter, marked by an influx of late-stage capital and an uptick in mega deals worth more than 100 million. “With key sectors such as enterprise applications, fintech, and retail driving investment momentum, the ecosystem appears to be entering a phase of renewed investor confidence,” the report said.
The surge in Q1 this year represents a dramatic 865 per cent rise from the $90.5 million raised in Q1 2024. “This sharp climb in funding signals a notable shift in capital deployment patterns within the UAE’s tech sector,” the report said.
Seed-stage funding in Q1 2025 totalled $23.4 million, marking a decline of 77 per cent compared to $100 million in Q4 2024 and a 62 per cent drop from $61 million in Q1 2024. Early-stage investments amounted to $89 million in Q1 2025, a modest decline of 8 per cent from the $96.5 million raised in Q4 2024 but a substantial increase of 202 per cent over the $29.5 million raised in Q1 2024. Late-stage funding drove the overall funding surge, with $760 million raised in Q1 2025 an impressive 660 per cent increase over the $100 million raised in Q4 2024.
Enterprise applications emerged as the leading sector in Q1 2025, securing a total of $688.1 million in funding. This represents a 664 per cent increase compared to the $90.1 million raised in Q4 2024 and a 1,111 per cent surge over the $56.8 million raised in Q1 2024. The FinTech sector followed with $215.6 million in funding, a 73 per cent increase from $124.6 million in Q4 2024 and a 574 per cent jump from $32 million in Q1 2024. The retail sector saw $171.5 million in funding in Q1 2025, reflecting a 134 per cent rise from $127.6 million in Q4 2024 and a staggering 13092 per cent increase compared to $1.3 million in Q1 2024.
In Q1 2025, the UAE saw two funding rounds worth more than $100 million, compared to one such round in Q4 2024 and none in Q1 2024. Vista Global and Tabby were among the companies that raised over $100 million this quarter. Tabby raised a total of $160 million in a Series E round led by Blue Pool Capital, valuing the company at over $3300 million. Vista Global secured $600 million in a late-stage round led by RRJ Capital. A major part of these $100 million+ funding rounds came from Enterprise applications, FinTech, and retail sectors. Micropolis was the only company to go public in Q1 2025. There were no unicorns created in Q1 2025, Q4 2024, or Q1 2024.
Tech companies in the UAE recorded six acquisitions in Q1 2025, maintaining the same level as Q1 2024. Cartlow was acquired by Basatne in what became the highest valued acquisition of Q1 2025, followed by the acquisition of HotCold Studio by Grandstores.
Dubai-based tech firms accounted for 96 per cent of all funding seen by tech companies across the UAE in Q1 2025, establishing the city as the undisputed leader in attracting venture capital.
500 Global, Wamda Capital, and Middle East Venture Partners were the overall top investors in the United Arab Emirates tech ecosystem. Oraseya Capital, Plus VC, and Endeavor were the top seed-stage investors in Q1 2025. QED Investors and Tech Invest Com led early-stage investments in the country during the same period.
The UAE tech ecosystem experienced a sharp surge in funding in Q1 2025, primarily driven by significant late-stage investments and multiple $100M+ deals in Enterprise Applications, FinTech, and Retail. While seed-stage investments declined, the dominance of Dubai in attracting capital, along with a strong uptick in acquisitions, highlights the growing maturity of the region’s tech sector.
