Private debt has overtaken venture capital as the dominant source of startup funding in the Gulf, with Saudi Arabia accounting for the vast majority of the GCC's $4.1 billion in structured credit deployment in 2025, according to an industry report from Stride Ventures.
Massive Growth in Private Debt
Data released by Stride Ventures showed that private debt, including venture debt and growth credit, expanded more than eightfold from around $500 million in 2024, underscoring a rapid shift in how high-growth companies across the region are financing expansion. Saudi Arabia led the market with approximately $3.9 billion in private debt transactions, far ahead of the UAE at $211 million and Bahrain at $22 million, according to the report.
It found that structured credit accounted for more than half of the GCC startup ecosystem's $7.4 billion in tracked funding during 2025, surpassing venture capital investments of $3.3 billion. The findings suggest that non-dilutive financing is moving from a complementary funding source to a primary growth tool for startups and scale-ups across the region.
Institutional Conviction and Sovereign Backing
“The GCC’s private debt market has moved from early exploration to institutional conviction,” said Fariha Ansari Javed, partner for GCC and global capital formation at Stride Ventures. “What stands out is not just the scale of deployment and participation of the region’s largest sovereign wealth funds, but the fact that credit is entering the capital stack earlier in the company lifecycle, especially across fintech and asset-backed models.”
According to the report, the rise of private debt has been supported by sovereign-backed investment programs, regulatory reforms, rapid fintech growth and government-led efforts to accelerate business scaling. Institutions including Saudi Arabia's Public Investment Fund, Jada Fund of Funds and Sanabil Investments, alongside the UAE's Mubadala and ADQ, have played a role in expanding the region's startup financing ecosystem.
Earlier Integration of Debt and Equity
Unlike more mature markets where companies typically progress from equity financing to debt at later stages, GCC startups are increasingly combining both forms of capital much earlier, often from Series A through to pre-IPO stages. The trend is most visible in fintech, where companies require substantial and recurring access to capital to support lending operations and platform growth.
Fintech accounted for roughly 95.5 percent of all private debt deployed in the GCC last year, representing about $3.9 billion of total funding. Among the largest transactions highlighted in the report were Saudi fintech firms Tamara, which secured $2.4 billion in financing, and Lendo, which raised $740 million. Other notable deals included Deem at $400 million, Erad at $33 million, the UAE's CredibleX at $100 million, Kitopi at $50 million and Octa at $20 million.
Structural Shift in Regional Financing
The report said the dominance of fintech reflects a broader structural shift in the region, with institutional lenders increasingly providing asset-backed financing to support loan books, receivables and other growth assets at earlier stages of corporate development.
