The Middle East and North Africa (MENA) region’s startup ecosystem has become increasingly vibrant in recent years and boasts a string of unicorns and innovative businesses.  

But despite the progress that has been made, female founders remain woefully underrepresented in accessing capital.

MENA’s startup ecosystem attracted $1.7 billion in VC funding across 242 rounds in the first half of 2026, according to tech accelerator Wamda. 

However, female-founded startups secured only $2.5 million or 0.14% of this funding total, compared with$1.6 billion raised by male-founded startups across 213 deals.

This funding disparity is far from a one-off.

Aggregate data compiled by Wamda shows that mixed-gender founding teams and female-founded startups accounted for roughly less than 4% of total equity transactions deployed across the GCC between 2019 to 2025. 

This is despite more female entrepreneurs establishing businesses in the region.  

According to a 2025 Global Entrepreneur Survey conducted by GoDaddy, the U.S.-headquartered internet domain registry company, 51% of surveyed small businesses in MENA are owned by women, with 63% of them founded in the past five years. 

Abu Dhabi alone recorded 3,058 new business licenses issued to Emirati women in the first half of 2026, highlighting the growing role of women entrepreneurs in the emirate’s economy. 

It begs the question: if more women across the region are starting companies, why hasn’t their share of the funding pie grown at the same pace?

According to Lucy Chow, a limited partner at U.K.-based Pact VC whose investment remit extends to MENA, part of the problem stems from the lack of diversity at the investor level.  

“Gulf investor networks are still very male-dominated, especially at decision-making levels,” said Chow, who also works as secretary general in the UAE office of the World Business Angels Investment Forum.

“That matters because deal flow follows networks. I’ve been saying for years that we need more female check writers, but men have to help solve this too, by actively backing deserving female founders.” 

It’s a view that is shared by Basil Moftah, managing partner at Key Capital, a Dubai-based VC secondaries asset manager. 

“Undoubtedly, the VC industry—both regionally and globally—is dominated by male general partners or has a majority of male GPs,” said Moftah. 

“While most people would tell you they’re not biased, surely there is a bias in there. It’s hard to ignore that and the impact it has on funding outcomes.”

Data published by Founders Forum Group, a U.K.-headquartered group of businesses supporting entrepreneurs around the world, shows that VC firms with at least one female partner are 2.3 times more likely to invest in female founders, while VC firms where women make up at least 30% of partners invest 4.7 times more in female-founded companies than all-male firms. 

Female angel investors allocate approximately 35% of their investments to female founders versus 13% for male angels. 

Chow said that female startups still rely heavily on bootstrapping to try to plug the gap. 

“My experience with a lot of female founders is that they bootstrap,” she explained.  

“They are leveraging alternative personal income streams to self-fund. Founders are resourceful and patch together funding, but non-traditional capital won’t replace VC when it comes to scaling.”

She referenced a Mastercard study published last year that showed 56% of women entrepreneurs in the UAE run a side hustle, to achieve financial independence and bankroll early business concepts. 

Some regional industry experts have said that if the trend is to be reversed, Gulf governments need to issue mandates for gender equity in startup funding. 

Chow believes the region needs to build a pipeline of female investors. 

“We absolutely have to treat this as a capital allocation problem, not just a founder problem,” she said. 

“That means more women angels, limited partners, and investment committee seats, but also more female investors in the room, and government measures that encourage capital to flow, not just quotas.” 

The lack of major exits in regional female startups has created a familiar catch-22: investors need success stories to unlock capital, but capital is needed to create those success stories.

According to Chow, the funding imbalance has also led to a heavy reliance on public innovation grants from entities such as Dubai SME and Abu Dhabi’s Khalifa Fund for Enterprise Development to survive bridge periods between equity VC rounds. 

It has also led women to take matters into their own hands, as Sophie Smith, founder and CEO of UAE-based Nabta Health, the first dedicated platform for women’s preventive healthcare in MENA, explained. 

“When we started raising our Seed round in 2021, we set up a special purpose vehicle so that we could accept smaller tickets of $1,000 or more from angel investors,” said Smith. 

“I was looking for female angel investors on publicly available lists and, out of frustration, I set up 2022 Female Angels with a group of friends to identify and publicly list 2,022 female angel investors across the region.” 

Today, the team hosts workshops and bootcamps to upskill and enable women to become angel investors, and manages a list of around 350 active angel investors, with 44 of its 79 angel investors being female. 

Last November, Nabta Health closed a $2 million pre-Series A funding round, bringing its total funding to $4.5 million.

Other initiatives such as Women Spark, founded in Saudi Arabia by Deemah AlYahya, focus heavily on training, mentoring, and facilitating angel investments into female tech innovators. 

While such efforts are encouraging, they are unlikely to move the dial on the scale required for the Gulf’sfemale startup ecosystem to start reaching its full potential.  

“I have been one of those vocal individuals stating that we need governments to step up and to seed funds targeted specifically at female founders,” said Chow.

“Concurrently, wealth funds and family offices can also do their part by allocating a portion, however small, to funding female-led startups.” 

As the GCC presses ahead with pursuing economic diversification, the region can ill afford to leave a growing pool of female entrepreneurs on the sidelines. The challenge is no longer getting more women to start companies—it is ensuring they have a fair shot at the capital needed to scale them.

That will require more than training programs and individual initiatives. Key players across various areas of the economy will need to exercise a more active role in widening the investor pipeline and directing capital toward female-led businesses. 

This story was originally featured on Fortune.com