Investment activity across the Middle East and North Africa’s startup ecosystem slowed sharply in March 2026, with just 17 startups raising a combined $48.3 million. The figure marks an 85% drop month-on-month and a 62% decline compared to March 2025, making it one of the weakest months the region has recorded in recent years.
But the drop, while dramatic, is less about structural weakness and more about timing.
With escalating geopolitical tensions, driven by the US-Israeli war against Iran and retaliatory targeting of key oil and infrastructure assets across the GCC, capital has not disappeared. It has paused. Investors are holding back, reassessing exposure to sectors vulnerable to prolonged instability, while founders are increasingly delaying public announcements of closed rounds, waiting for greater clarity or a ceasefire.
The slowdown has been compounded by the disruption of the region’s key dealmaking platforms. Events such as LEAP, which typically anchor some of the year’s largest funding announcements, have either been postponed or lost momentum, removing a major catalyst for deal visibility.
Taken together, March does not signal a contraction of the ecosystem as much as a shift into a wait-and-see mode. The question is no longer whether capital will return but how long this pause will last and whether recovery will be gradual rather than immediate.
