Private debt in GCC hit USD 4.1 bn last year — overtaking venture capital for the first time
Private debt has quietly overtaken venture capital as the Gulf's dominant startup financing tool for the first time as non-dilutive capital becomes increasingly attractive in a global VC environment that remains cautious, according to a report by Stride Ventures. GCC private debt deployment hit USD 4.1 bn in 2025, up 8.2x from USD 500 mn a year earlier, according to the report. For the first time, structured credit outpaced venture capital in the region’s startup funding mix — VC deployment came in at USD 3.3 bn, out of USD 7.4 bn in total tracked startup investment. Fintech’s dominance is striking even within private debt — the sector accounted for 95.5% of total GCC deployment, or USD 3.9 bn, with the rest spread across agritech, proptech, SaaS, and logistics. The concentration signals that the market is still early: fintech’s large, legible cashflows make it the obvious first home for structured credit, but the playbook hasn’t yet spread to other sectors at scale. A lot of the funds are targeted toward Saudi: Saudi Arabia accounted for roughly USD 3.9 bn of the region’s total private debt deployment — about 95% — driven by a handful of very large transactions. Tamara pulled in USD 2.4 bn, Lendo USD 740 mn, and Deem USD 400 mn. The UAE was a distant second at USD 211 mn, with CredibleX (USD 100 mn) and Kitopi (USD 50 mn) among the larger transactions. Bahrain saw USD 22 mn in private debt transactions. Growth credit still dominates: The entire volume of venture debt deployed across the GCC from 2018 to 2025 — USD 2.8 bn — was surpassed by growth credit activity in 2025 alone, which came in at USD 3.9 bn. Venture debt in 2025, by contrast, stood at just USD 249 mn. Founders are using this capital offensively, not defensively. The report’s founder survey is telling: 54% of respondents said they used private debt for growth and expansion, while 36% used it to bridge between equity rounds. Working capital optimization and runway extension each came in at 27%. Only 9% cited M&A or capex. Who’s driving the market? GCC policymakers surveyed by Stride identified dedicated private credit funds as the most active players, ahead of international cross-border lenders, government and DFI institutions, and non-banking financial services firms and specialty lenders.
Source: EnterpriseAM