MAGNITT: Five Months On - MENA's VC Before and After the Conflict
Five months after the outbreak of the regional conflict, MENA venture activity is operating at a lower level. Startups raised $881M across 154 deals between March and July 2026, down 27% in funding and 34% in deal activity compared with the preceding five months.
But the decline has not been uniform. Early-stage funding fell 72%, Series A remained broadly stable, international capital deployment weakened materially, and exits declined as international acquirers pulled back. Late-stage weakness, meanwhile, predates the conflict altogether.
That distinction matters. This report does not assume every post-February movement was caused by the war. Instead, it uses two equal five-month windows to show where the market changed after the conflict outbreak, where resilience remained, and which vulnerabilities were already embedded in MENA's venture cycle.
Key Takeaways
- Deal activity contracted faster than funding. MENA startups raised $881M across 154 deals from March through July, compared with $1.21B across 234 deals in the preceding five months, reducing funding by 27% and transactions by 34%.
- Early stage recorded the clearest deterioration. Pre-Seed and Seed deals fell 44%, while capital declined 72% to $130M, cutting early-stage funding's share of the market from 38% to 15%.
- The middle of the funding funnel proved more resilient. Series A funding declined just 4% to $215M and Series B funding declined by 5% to $130M. The absence of Series C+ activity cannot be attributed solely to the conflict, with the last such round recorded in July 2025.
- International participation held up better than international capital. International investors represented 39% of active investors in 2026 YTD, but only 23% of attributed capital, compared with 49% of capital in 2025.
- Liquidity and future capital formation also weakened. M&A transactions fell from 15 to 12, driven by fewer international acquirers, while new fund announcements declined from eight to five and announced target capital excluding the $49B MGX AI Fund fell 63%.
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