Private capital financing in the Gulf region has skyrocketed, reaching $54.8 billion between 2020 and 2024, a sharp increase from the $10.4 billion raised in the previous five years, according to a new S&P Global report. This rapid growth reflects a shift as companies seek alternatives to traditional bank funding.
🔹 Key Highlights:
- Private financing peaked at $20.4 billion in 2023, compared to just $1.3 billion in 2015.
- Established companies received 79% of private financings in 2024, up from 31% in 2015.
- Middle East emerging as a key hub for private capital investment in 2025, with government initiatives and sector reforms fueling growth.
- Startup funding is booming, with a 92% increase in capital raised in November 2024 alone.
Despite a slight decline in 2024 due to improved local banking conditions and falling interest rates, private capital remains a key growth driver. The GCC region raised $3.5 trillion in the past decade, with bonds (51%) as the dominant financing method, followed by bank loans (26%), sukuk (19%), IPOs (6%), and private capital financings (3%).
💬 Future Outlook: While private capital is expanding, it is not expected to replace banks. Instead, it will complement the financial ecosystem, helping early-stage firms secure funding and providing flexible alternatives for established businesses. Sovereign wealth funds are also expected to diversify their investments, further strengthening the private capital landscape in the region.