Zest Equity, a fintech company based in the United Arab Emirates, has successfully secured $4.3 million in pre-series A funding. This funding round was led by Prosus Ventures, with additional participation from Morgan Stanley Inclusive and Sustainable Ventures (MSISV).

Founded in 2021 by Rawan Baddour and Zuhair Shamma, Zest Equity operates a platform that facilitates the sale of secondary shares for founders and venture capitalists. To date, the company has facilitated transactions totaling $155 million across more than 115 deals, demonstrating significant demand in the secondary market.

The focus on secondary transactions by Zest Equity highlights an important evolution in the Middle East’s startup ecosystem, as liquidity becomes increasingly vital for early investors seeking exits. This trend reflects the broader global movement in private markets, where alternative liquidity solutions are essential as traditional exit timelines extend.

In 2024 alone, MENA’s fintech sector has seen 119 startups raise $700 million, accounting for 30% of all startup funding in the region. This surge has created pressure for earlier investors to pursue partial exits, necessitating the development of secondary transaction infrastructure, particularly for deals valued under $100 million that traditional investment banks often overlook.

Zest Equity’s successful funding round underscores the UAE’s leading position in the regional fintech landscape, where it is home to 13 of the top 50 fintech companies in the Middle East. This success is closely followed by Egypt with 12 and Saudi Arabia with 10 fintech firms. The Dubai International Financial Centre (DIFC) has played a crucial role in this growth by increasing fintech registrations from 80 to 200 within a span of just six months.

This expansion aligns with the UAE’s strategic aim to shift from a hydrocarbon-based economy to one driven by innovation, with fintech being a cornerstone of this transformation. However, regional competition is intensifying, as Saudi Arabia’s fintech sector is projected to reach $1.5 billion by 2025, already boasting 224 fintech companies by the second quarter of 2024, surpassing government targets.

The UAE retains its competitive edge through regulatory innovations and supportive mechanisms such as the DIFC Fintech Hive, which has assisted over 200 firms with mentorship and funding opportunities, fostering an environment where specialized players like Zest Equity can thrive.