North Africa Rises on Deals as MENA AI Funding Hits $858 Million
•February 10, 2026
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Why It Matters
The rapid increase in AI deals highlights a shifting investment focus toward early‑stage innovation in North Africa, positioning the region for future capital growth. This momentum aligns with rising corporate AI spending, potentially accelerating the region’s tech ecosystem.
Key Takeaways
- •AI funding in MENA reaches $858 million, 22% of VC.
- •UAE and Saudi Arabia capture 87% of AI capital.
- •North Africa deals rise 88% year‑on‑year, early‑stage focus.
- •Pre‑seed/seed AI deals in Egypt up 56% YoY.
Pulse Analysis
The 2025 State of Venture Capital of AI in MENA report shows AI investment climbing to $858 million, nearly double the 2024 figure and accounting for 22 percent of all venture capital in the region. This surge reflects a broader shift from debating AI’s relevance to racing to develop and scale applications. With 194 AI‑related deals representing 29 percent of total MENA transactions, investors are clearly treating artificial intelligence as a core growth engine. The concentration of capital in the United Arab Emirates and Saudi Arabia underscores the emergence of regional AI hubs.
North Africa’s contribution is defined more by deal activity than by funding volume. Egypt alone secured $73 million across 15 transactions, an 88 percent increase in deal count year‑on‑year, while pre‑seed and seed AI deals rose 56 percent. These figures indicate a burgeoning ecosystem of early‑stage founders targeting AI‑enabled products and services. Although the region captures a modest share of total AI capital, the rapid rise in deal numbers suggests growing confidence among local investors and accelerators, laying groundwork for future scaling.
The momentum is likely to intensify as corporate leaders across Africa plan to allocate more than 20 percent of their investment budgets to AI, almost double the global average. Such budgetary commitments can transform early‑stage venture activity into larger funding rounds, attracting multinational VCs and strategic partners. For North African startups, this could mean access to deeper pools of capital, talent, and market opportunities, ultimately strengthening the MENA AI landscape and positioning the region as a competitive player on the global tech stage.
North Africa rises on deals as MENA AI funding hits $858 million
Conversations around artificial intelligence (AI) have moved beyond whether the technology matters to how quickly it can be developed and scaled. In 2025, this shift was reflected in venture capital data across the Middle East and North Africa.
The region’s AI sector attracted $858 million in funding in 2025, accounting for 22% of total venture capital deployed across MENA and nearly double the amount recorded the previous year, according to the 2025 State of Venture Capital of AI in MENA report by MAGNiTT, a venture capital data platform.
The 2025 figures mark a transition in how artificial intelligence has become embedded in venture capital activity across the region. They also reveal a growing gap between where AI capital is being deployed and where startup activity is emerging, as funding concentrates in specific markets even while venture activity spreads more broadly.
The funding was raised across 194 deals, accounting for 29% of all venture deals in the region. However, this surge in capital was not evenly distributed across markets.
North Africa’s visibility in the 2025 AI venture landscape comes primarily through deal activity rather than funding volume.
Egypt recorded $73 million across 15 AI-related deals in 2025, representing eight per cent of the regional AI funding and an 88% year-on-year increase in deal count. In funding terms, Egypt remains well behind the region’s dominant AI markets, led by the United Arab Emirates and Saudi Arabia, which together captured 87% of regional AI funding.
However, the rise in deal counts signals North Africa’s growing participation in the AI sector. It indicates that more founders are building startups centred on AI applications, with rising investor interest at the early stage, as pre-seed and seed AI deals increased by 56% year-on-year.
This pattern mirrors how AI venture activity is unfolding across Africa more broadly. Data from the 2025 Africa Investment Report compiled by Briter Intelligence, a market intelligence and data platform, shows that AI-enabled companies accounted for roughly 15% of all venture deals on the continent, which collectively raised $3.6 billion across more than 600 deals.
The 2025 data positions North Africa as an active but largely early-stage participant in the region’s AI venture capital landscape. For now, its footprint is defined more by rising activity than by capital concentration.
This momentum is expected to accelerate as about 26% of the continent’s business leaders on the continent plan to allocate more than 20% of their investment budgets to AI over the next 12 months, nearly double the global average of 14%.
As more companies across the continent integrate AI into their operations and product offerings, this early-stage venture activity could translate into larger capital inflows in the years ahead.
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