Algeria’s startup ecosystem is feeling the squeeze of a regional funding slowdown that has hit the Middle East and North Africa (MENA) in 2025. According to data published by Wamda this week, MENA startups raised only $52 million in June 2025—the steepest monthly drop in a year and a 68 % fall from the same month in 2024. Algerian founders, who have historically struggled to attract venture capital, now face even stiffer competition for the shrinking pool of regional cash.
The June figures mark the fourth consecutive month of decline, bringing the total for the first half of 2025 to $480 million across the MENA region, down 42 % year-on-year. Wamda’s analysis shows that Algeria captured less than 1 % of that total, a share that has barely budged since 2022. In contrast, the United Arab Emirates (UAE) and Saudi Arabia absorbed 72 % of all MENA funding in the same period, leaving little for smaller markets.
Local investors step in where VCs retreat
The Ministry of Startups and Micro-Enterprises, created in January 2024 under Minister Yacine Oualid, has also accelerated its “Algeria Startup Act” grants. In the first half of 2025, 128 startups received non-dilutive grants of up to 10 million dinars each, a 40 % increase over the same period last year. These grants are earmarked for sectors the government has identified as strategic: renewable energy, agri-tech, health-tech, and digital services for public administration.
Diaspora capital remains untapped
Entrepreneurs cite two main barriers: the absence of a secondary market for startup equity and the cumbersome process of repatriating funds. “I have investors in Paris and Montreal ready to wire money, but the paperwork at the Banque d’Algérie takes three to six months,” says Amine Belkacem, founder of the Oran-based logistics startup LogiTech. “By the time the funds arrive, the opportunity is gone.”
Sector spotlight: agri-tech and renewables
Renewable energy startups are also attracting capital. The state-owned Sonelgaz has launched a $100 million corporate venture fund to invest in solar and wind startups. In May 2025, the fund led a $2.8 million Series A round for HelioTech, an Algiers-based startup that manufactures low-cost solar panels. “The energy transition is not optional for Algeria,” says Sonelgaz CEO Chaher Boulakhras. “We are looking for startups that can scale quickly and integrate into our national grid.”
What the funding drought means for founders
The shift has also accelerated partnerships with corporates. In June 2025, the telecom operator Mobilis acquired a 25 % stake in the e-commerce platform Jumia Algérie for an undisclosed sum, marking the first major corporate investment in an Algerian startup since 2022. “Corporates are filling the gap left by VCs,” says Karim Meziane, managing partner at the Algiers-based accelerator Startup Factory. “They bring not just cash, but also distribution channels and regulatory cover.”
Regulatory tailwinds
These changes have yet to translate into a surge in foreign capital, but they have improved the business climate. “The tax cut alone saves us 11 million dinars a year,” says Belkacem of LogiTech. “That’s enough to hire three engineers or buy a new server.”
Key takeaway for entrepreneurs
Algerian startups must prioritize profitability over growth in 2025, as venture capital remains scarce. Local grants and corporate partnerships are the most accessible funding sources, while agri-tech and renewable energy offer the clearest paths to state-backed contracts. The diaspora remains an underutilized resource; founders should explore hybrid models that combine remittances with local grants to bridge the funding gap.
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