In 2025, private debt has become the primary source of startup funding in the Gulf, surpassing venture capital, with Saudi Arabia contributing the majority of the GCC’s $4.1 billion in structured credit. This marks a significant increase from approximately $500 million in 2024, highlighting a shift in financing strategies for high-growth companies in the region. Saudi Arabia dominated the market with about $3.9 billion in private debt deals, outpacing the UAE’s $211 million and Bahrain’s $22 million. Structured credit made up more than half of the GCC startup ecosystem’s $7.4 billion in funding for 2025, overtaking venture capital investments of $3.3 billion.
This shift indicates that non-dilutive financing is becoming a primary growth tool for startups and scale-ups in the region. The GCC’s private debt market has evolved from initial exploration to institutional acceptance, with significant involvement from the region’s largest sovereign wealth funds. Credit is now being integrated into the capital stack earlier in the company lifecycle, particularly in fintech and asset-backed models.
The rise of private debt is supported by sovereign-backed investment programs, regulatory reforms, rapid fintech growth, and government initiatives to accelerate business scaling. Key institutions, including Saudi Arabia’s Public Investment Fund and the UAE’s Mubadala, have expanded the region’s startup financing ecosystem. Unlike mature markets where companies transition from equity to debt later, GCC startups are combining both forms of capital earlier, from Series A to pre-IPO stages.
The fintech sector, requiring substantial capital for lending operations and platform growth, accounted for 95.5 percent of all private debt deployed in the GCC, totaling approximately $3.9 billion. Major transactions included Saudi fintech firms Tamara and Lendo, securing $2.4 billion and $740 million, respectively, alongside other significant deals like Deem, Erad, the UAE’s CredibleX, Kitopi, and Octa. This trend reflects a broader structural shift, with institutional lenders increasingly providing asset-backed financing to support growth assets at earlier stages of development.
