Fintech in the MENA region: a rising star

Fintech in MENA is booming, an overview

Fintech in the MENA region is a rising star.

The Middle East and North Africa (MENA) region opens huge opportunities for fintechs thanks to the scale of the market and the lack of established financial institutions.

Compared to mature markets, such as the US and Europe, 67% of the adult population are either underbanked or unbanked, 136 million adults.

At the same time, the MENA region demographics offer huge opportunities. More than 60 percent of the population is under the age of 30, compared to one-third in Europe. MENA’s population is also extremely tech-savvy and ready to embrace new digital technologies. In UAE, for instance, already more than 50% of the population uses digital wallets.

Government support and fintech-friendly regulations are also fostering homegrown entrepreneurship in the region and attracting global players. Countries in the region, especially UAE, Saudi Arabia, Egypt and Bahrain, are supporting the fintech ecosystem with initiatives ranging from free zones, such as the Dubai International Financial Centre (DIFC), and regulatory sandboxes such as DIFC’s Innovation Testing License (ITL), Egypt fintech sandbox and SAMA regulatory sandbox in Saudia Arabia. The region is also showing strong openness to crypto, with UAE and Bahrain leading the way in crypto adoption and regulation.

The fintech startup and venture capital scene are unsurprisingly booming. Fintech in MENA has already reached $819M in the first half of 2022, almost 2x the previous record. Also, crypto investments in MENA have skyrocketed, reaching $187M, almost 2x the previous record.

Fintech in MENA has already reached $819M in the first half of 2022, almost 2x the previous record.

Report - Fintech in MENA: a rising star

The state of Fintech in the MENA region

Fintech investments in MENA have already reached $819M in the first half of 2022. This is already almost as much as in all of 2021 and 14 times more than in 2016. The largest raises this year include Foodics, a Saudi Arabia-based cloud-based technology and payments platform for restaurants; Rain, a Bahrain-based crypto exchange, Tribal Credit, a US and Egypt business credit card for startups in emerging markets, Tabby, a UAE BNPL platform and Paymob, an Egypt-based omni-channel merchant financial services platform.

Top fintech deals in MENA in 2022

The MENA region is now home to more than 800 fintech startups worth $15.5B. It is a young ecosystem with startups founded since 2015 already creating most of the value.

For illustration, DIFC, the largest fintech and innovation ecosystem in the MENA region, accounts for over 60 per cent of all those in the region. Through the DIFC Innovation Hub Fintechs have a growth platform that includes:

  • a calendar of thought leadership and events connecting key players in the sector ranging from international banks, regulators and new players. 
  • access to the $270 Million Future District Fund to help establish, grow and upscale growth-stage FinTech companies looking to tap into MEASA markets.

Quote by Salmaan Jaffery, Chief Business Development Officer of Dubai International Financial Centre on fintech in MENA

Top fintech segments and trends in MENA

Payment startups have dominated MENA fintech funding, raising $1.9B since 2016. Crypto and Mortgages & Lending follow with almost $0.4B.

Top fintech segments in MENA

Buy Now Pay Later (BNPL) has been one of the strongest trends in the region in the last two years, with almost $500M raised in VC funding. Leading startups in the segment include Dubai-based Tabby which raised more than $150M in equity and debt in the last 2 years, Riyadh-based Tamara which attracted an impressive $110M funding from payment giant, and Egypt-based MNT-Halan and ValU.

And indeed, according to a recent survey conducted by, BNPL is emerging as the new favourite payment method in the MENA region, with greater penetration in MENA (24%) than in the UK and Europe (23%) in 2021.

Interestingly, BNPL is also moving into B2B as with Riyadh-based Lamaa which raised a $5.5M Seed in December.

Another strong trend in the region is payment solutions for merchants and SMBs. For instance, restaurant-focused Foodics and digital payment enabler Paymob are among the largest fundings this year and the MENA region has already scaled big successes in the space like Network International, STC Pay and Fawry.

Cross-border payments are also vital to the financial ecosystem in the MENA region. The region is home to some of the largest remittance corridors in the world, connecting with markets such as India, Pakistan, Bangladesh, Sri Lanka and the Philippines. United Arab Emirates and Saudi Arabia, handled $78 billion in payments in 2020 as millions of unbanked and underbanked ex-pats reside in the region.

UAE-based Hubpay is one of the startups targeting the segment and recently raised $20 million in a Series A round.

Open banking is also a key enabler for the growth of the fintech MENA ecosystem. Open banking creates an opportunity, for either traditional financial institutions or fintechs, to build applications ranging from payments to lending on top of its API infrastructure.
The region has recently seen the emergence of a handful of open banking players Tarabut Gateway, Lean technologies, Dapi, Spire Tech, Fintech Galaxy, Underlie and Bankable API.
The region is also catching up in terms of open banking regulation. Bahrain is currently the only country in MENA with a full open banking policy and framework, while Saudi Arabia, Egypt and UAE are all in the process of developing their own open banking regulations.

Tarabut Gateway, the largest Open Banking platform in the MENA, has been selected by the Dubai International Financial Centre (DIFC) as its preferred technical platform partner for its new Open Finance Lab. The Open Finance Lab, which formally launched on 28 June 2022, aims to ultimately unlock economic benefits, financial wellness and financial inclusion.

A leading crypto hub in the making

Crypto investments in MENA have skyrocketed to $187M, almost 2x the previous record.Crypto investments in MENA have skyrocketed to $184M in the first half of 2022, almost 3x the previous record.

MENA homegrown successes include the likes of crypto exchanges Rain, CoinMena and BitOasis, DeFi platform Sheesha Finance, blockchain-based financial markets infrastructure company  Securrency, crypto payments Tribal credit and Asset Digitization and Traceability solutions provider Verofax.

The MENA region is also attracting leading global crypto companies. Crypto exchanges such as, Binance, FTX and Bybit are all making moves to UAE, especially to Dubai. Binance, the world’s largest crypto exchange, and Bybit have moved their headquarters to the city, while and FTX have opened a regional outpost. They have all also received licensing by Dubai Virtual Assets Regulatory Authority (VARA).

The Dubai Financial Services Authority (DFSA) is the regulatory arm of the Dubai International Financial Centre (DIFC), and has also unveiled a consultation paper outlining its proposed regulatory regime for crypto tokens. Earlier in November 2021, the DFSA finalized regulations for Investment Tokens.

Dubai also recently announced its metaverse strategy. In Abu Dhabi instead, all women residents will be provided free crypto, NFT, and blockchain domains as part of a new initiative to be offered in the UAE capital.

Strong government and regulator support is driving fintech growth in MENA

A fundamental tool for regulators and governments to enable fintech growth is regulatory sandboxes. UK has been the forerunner, with the Financial Conduct Authority (“FCA”) launching its regulatory sandbox back in 2016 with the purpose of removing unnecessary barriers for banking and finance businesses looking to innovate.

Several MENA countries such as UAE, Bahrain, Saudi Arabia and Egypt now have fintech sandboxes in place. For instance, the Innovation Testing License (ITL) by Dubai International Financial Centre (DIFC) allows a company to develop and test FinTech ideas without the level of regulatory requirements that would normally apply.

In MENA, free zones are also a fundamental tool to foster the ecosystem. These are special economic zones with business-friendly civil and commercial laws; zero tax on business income and profits; and no restrictions on foreign exchange or capital repatriation.

Dubai International Financial Centre (DIFC) is the most developed free zone for the financial industry in the region. Thanks to its position it is the leading financial hub for the Middle East, Africa and South Asia (MEASA), which comprises 72 countries with an approximate population of 3 billion and a nominal GDP of US$ 7.7 trillion. It is home to an internationally recognised, independent regulator and a proven judicial system with an English common law framework, as well as the region’s largest financial ecosystem of more than 25,600 professionals working across over 2,500 active registered companies, making up the largest and most diverse pool of industry talent in the region.

Among its initiatives is also DIFC FinTech Hive, the first and largest financial technology accelerator in the Middle East, Africa and South Asia (MEASA) region.

At Dealroom, we are committed to the region and recently launched a dedicated database to map startups in the Microsoft for Startups MEA GrowthX Accelerator program, which are now worth $2.8b in combined enterprise value (for more details). Strong fintech successes from the program include blockchain financial infrastructure Securrency, BaaS provider and card issuer NymCard, digital wallet and remittance innovator HubPay, Tarabut Gateway, alongside other 45 innovative fintech startups from the region.

MENA is a fintech rising star and, with the right enablers, can truly become a world leader. We are looking forward to supporting the local startup scene with partners in the region.

Overview of more than 800 fintech startups in MENA
An overview of more than 800 fintech startups in MENA

Download the full report to discover more 👇

Report - Fintech in MENA: a rising star

Additional resources:

The growth of BNPL in the MENAP region and digital wallets in UAECheckout

A Deep Dive Into Cross Border Payments in MENA – MENA fintech