Fintech money kept moving into the Gulf even as geopolitical instability affected trade routes as well as banking and international business activity. Venture capital investors continued backing payment systems, SME finance platforms, digital wallets and crypto exchanges throughout 2025 and early 2026.
In an article called “The Next Phase of MENA FinTech Growth”, Arthur D. Little reported that venture capital funding in MENA reached $3.8 billion during 2025. Mal secured $230 million in investment, HALA secured $157 million in Series B funding, Tabby announced a $160 million Series E round, and Rain secured $58 million in Series B financing.
All of this funding activity took place, even though there were many international markets dealing with sanctions risks and regulatory confusion around crypto products. Fintech founders in the Gulf continued building payment infrastructure and digital financial services aimed at consumers and small businesses.
Ethan Yang, Head of Ops and Strategy at CTGT, said investors view MENA fintech as infrastructure with long term commercial demand.
“My perspective is more from the lens of finance, VC-backed startups, and technology adoption in finance. MENA fintech continues to attract capital because investors are backing infrastructure like payments, SME credit, remittances, compliance, and embedded finance.
“MENA is a market where financial access is still uneven and governments are actively pushing digitisation and diversification, fintech demand is more structural than discretionary. That is why the sector can continue to perform even when the macro or geopolitical environment looks unstable from the outside.”
Arthur D. Little and Fintech Tuesdays surveyed around 140 fintech founders and executives across MENA. The research found that 77% believed the fintech sector was in a better position than 12 months earlier, although more than 70% also reported difficulties securing capital.
Why Are Crypto And Fintech Founders Choosing The Gulf?
Fintech businesses continued opening offices in the UAE and Bahrain because Gulf regulators moved faster than authorities in the United States and Europe on licensing frameworks for crypto businesses and digital assets.
Safi Ghauri, Managing Partner at Esquare Legal, said geopolitical instability did not scare regional investors away from fintech deals.
“Rationality would dictate that geopolitical instability scares off capital but in practice this is just wrong, at least in MENA fintech. What I actually see is the opposite. When traditional cross-border banking becomes unreliable and new factors emerge like sanctions risk and dollar-clearing friction the regional capital starts looking for alternatives. For the investors in the gulf they recognise that this a once a in a lifetime opportunity to get in on investments when things are cheap and fear is high.”
Ghauri also said western crypto founders faced regulatory confusion that made the Gulf more appealing.
“What’s accelerating it specifically in the Gulf is the regulatory regime. Western founders are genuinely stuck right now because the US is still figuring out basic crypto jurisdiction questions whereas Europe is mid-MiCA implementation and has managed to scare off all crypto talent with convoluted rules. Meanwhile UAE has handed out real licenses with detailed rulebooks. The Gulf is currently offering both stability on regulation and access to a market that actually needs these products.”
Arthur D. Little reported that almost 60% of survey respondents viewed the UAE as the market most likely to lead fintech innovation over the next three years. Nearly half also gave positive ratings to the UAE regulatory environment.
The report explained that fintech companies in Dubai and Abu Dhabi have now operated for more than a decade, giving the region mature ecosystems, experienced founders, and established investment networks.
Which Fintech Sectors Are Bringing In The Most Money?
SME finance and digital payments received some serious investor attention throughout the survey.
Arthur D. Little reported that respondents believed traditional banks do not serve small and medium sized businesses properly. That leaves room for fintech lenders offering embedded lending products, alternative credit scoring systems, and faster access to working capital.
Cross border payments also attracted interest because of the Gulf’s expatriate population and international workforce. Survey respondents viewed stablecoins and blockchain payment rails as useful tools for faster transfers and smoother international transactions.
Digital wallets received attention because card usage remains low in parts of MENA. Respondents viewed wallet based systems as an easier entry point for financial services and embedded finance products.
Islamic fintech also received interest from founders and investors. Survey participants said digital first Shariah compliant products for lending, savings, and wealth management continue attracting customer demand.
Arthur D. Little found that 68% of respondents viewed payments as the fintech sector most likely to merge Web2 and Web3 products over the next few years.
The survey also found that embedded finance ranked highest among fintech technologies at 34%, ahead of AI and machine learning at 29%, and open banking at 21%.
What Problems Are Fintech Businesses Facing?
Arthur D. Little reported that many fintech founders continue struggling with bank partnerships and fragmented regulation across the region.
The survey found that 73% of respondents believed banks were adapting too slowly to fintech developments. Respondents blamed ageing technology systems, cultural resistance, and risk aversion within banks.
Cross border regulation also created operational problems for fintech businesses operating in multiple countries. Arthur D. Little reported that 78% of respondents viewed lack of regulatory harmonisation between jurisdictions as a major obstacle.
Funding distribution also frustrated startup founders. Arthur D. Little explained that a large share of investment money went into mega deals involving a relatively small group of fintech companies, leaving smaller startups competing for limited capital pools.
The report also found a disconnect between personal crypto ownership and organisational adoption. Around 56% of respondents said they either owned crypto assets or planned to purchase them personally. Only 25% said their companies had integrated crypto products into business operations.
and even with those operational difficulties, fintech businesses across MENA just kept on attracting investor money, regulatory approvals and, of course, customer demand for digital financial products.
