GCC Private Debt Surges, Outpacing Venture Capital Growth
By Varun Mittal
GCC’s growth capital sees a major shift: private debt now dominates, accounting for 56% of total funding, signaling a maturing startup ecosystem.
The landscape of growth capital in the Gulf Cooperation Council (GCC) region is undergoing a notable structural evolution, distinguishing itself from more traditional venture capital-dominated markets. Startups and scale-ups across the GCC are increasingly leveraging private debt, including venture debt and growth credit, as a primary funding mechanism. This development occurs even as the region’s broader venture capital ecosystem demonstrates robust expansion.
In 2025, the GCC’s venture capital funding reached approximately $3.3 billion across 541 deals, marking a 14% increase. Over the preceding five years, venture capital funding experienced a 2.5-fold growth, indicating a maturing market, with Saudi Arabia and the UAE serving as the primary drivers of this expansion. However, a report by Stride Ventures reveals a deeper, more fundamental shift within this growth.
According to the Stride Ventures analysis, private debt accounted for 56% of the total private growth capital market in 2025, reaching $4.1 billion out of an estimated $7.4 billion. This proportion contrasts sharply with markets such as the UK, US, or India, where venture capital typically holds a substantially larger share of the growth funding pie. This divergence illustrates a unique capital deployment pattern emerging in the GCC.
Several interconnected factors underpin this structural preference for private debt. The presence of significant sovereign-backed capital, coupled with proactive regulatory support and a rapidly expanding fintech sector, has created an environment conducive to this model. Policy-driven initiatives aimed at accelerating scale-up growth have further facilitated large-ticket structured credit transactions at earlier stages of a company’s lifecycle. Key regional financial institutions, including Saudi Arabia’s Public Investment Fund, Jada Fund of Funds, and Sanabil Investments, alongside the UAE’s Mubadala and Abu Dhabi Investment Authority, have been instrumental in fostering this growth trajectory.
The fintech sector stands out as the predominant beneficiary and driver of private debt transactions, representing approximately 95% of total venture debt and growth credit deployment, with a cumulative deal value of $3.9 billion. This concentration highlights a specific structural feature: rapidly scaling venture-backed fintech platforms in the region are accessing institutional credit much earlier in their growth cycles. This approach effectively bypasses the traditional private equity leverage stages often observed in global markets.
Within the fintech domain, and excluding Buy Now, Pay Later (BNPL) services, SME lending platforms constitute the largest category of credit deployment. Consumer lending platforms follow closely, both addressing the escalating demand for digital credit products across GCC markets. This indicates a market actively building out digital financial infrastructure through credit, backed by institutional capital rather than pure equity risk.
The increasing prominence of private debt in the GCC’s growth capital equation signifies more than just an alternative funding source; it reflects a sophisticated, institutionally-supported maturation of the region’s entrepreneurial ecosystem. This structural pivot, particularly within fintech, suggests a unique and potentially more stable path to scaling for regional companies, leveraging robust balance sheets and regulatory frameworks to deploy credit at a stage where equity might traditionally dominate elsewhere.