Over the past 7 years the MENA VC ecosystem has leapfrogged competing ecosystems, exploding from $400M capital deployed to $3BN, for a 7,5X growth. Looking ahead, there is a clear drive to continue to build out the region’s VC ecosystem.
But what might that look like? What are the areas and what are the possible scenarios for the future VC ecosystem evolution across the dynamic MENA region?
By: Chris Rangen
I have just spent a week, deeply immersed in the venture capital ecosystem in the Middle East, primarily Saudi Arabia and the UAE). I come away both deeply impressed and exceptionally optimistic about the future evolution of the VC ecosystem in the region. I have been privileged to spend hours and hours in conversations, discussions and listening to impressive speakers on panels and in keynotes. In Saudi Arabia, I got the opportunity to attend the first ever SuperReturn Saudi Arabia, attended by well over 1000 GPs, LPs and leaders. In Abu Dhabi, ‘the capital of capital’, I was invited to attend the MEVCA Investor Summit, and share a rich day with who’s who across the region.
Key observations from a week immersed in the VC ecosystem
7.5x Growth in capital deployed since 2017
Capital deployed into venture capital has grown from $400M to $3BN over the past 7 years. This represented a ‘leapfrog moment’, as the region has 7,5X its capital deployment over the period. Many conversations centered around this topic, pointing to the collaborative efforts of founders, investors, government and both local and international stakeholders coming to the table.
Talabat, the world’s biggest tech IPO at Dubai Financial Market
In Q4 2024, Talabat (owned by Delivery Hero) went public at DFM at $10BN valuation, raising $2BN in the process. As the largest tech IPO globally in 2024, the listing visibly put MENA on the map in the global exit landscape. I sensed clearly that the $10BN IPO was a source of pride and signal to the wider tech world; look to MENA for future listings.
Only 4 venture-backable outcome startups every year
Dany Farha, GP at Beco Capital shared a key statistic at SuperReturn. “Every year, there are only 4 venture-scale outcome, startups launched in the region. We need to catch one or several of those”, Dany shared on stage. (author’s notes).
Later confirmed by Abdulaziz Shikh Al Sagha, Beco Capital has analyzed historic data, and find a consistent pattern that there are (only) four companies, founded every year that will grow up and deliver venture scale outcomes. This insight is key and should be much more widely known and understood. Great analysis, team Beco Capital!
You have to be here
A recurring theme, from both GPs who have raised funds here and LPs, was ‘you have to be here’. Gone are the days when a hot VC could fly in, raise capital and fly out again. Now, you have to be here. But more than that, you need to really build here as well. If you are aiming to raise capital, you need to set up a presence, build a team, truly engage with the ecosystem, show your value add to the market, invest in local and regional founders and work closely with your (limited) partners. Michael Lints, Partner at Golden Gate Ventures, was kind enough to share his learnings on how to successfully work in the region, having moved from Singapore to Qatar to expand GGV in the region, as a part of raising their new $100M MENA fund.
“Don’t just come to the region to fundraise. Bring value through portfolio companies that can collaborate with the local ecosystem and/or invest locally”, pro tip from Vishnu Amble from the stage at SuperReturn (via Simon Lancaster)
Clear and ambitious government leadership
Across the region, a clear and resounding government leadership is backing the VC ecosystem. Compared to other countries across Europe, the Americas and Africa, the government leadership and support here is outstanding and should be a source of inspiration for other countries around the world.
The key role of government-led Fund-of-funds
This was my first interaction with Jada Fund-of-Funds, and I got to spend some real time with key people on the team. Beyond just meeting them, I also heard from many VC firms in the market raising funds, how they found the interaction with Jada’s team both professional and very supportive. Unfortunately, this is not always the case when emerging managers meet government-led fund-of-funds.
Beyond the portfolio of 39 funds to date, Jada Fund-of-Funds also take a clear leadership role for the VC ecosystem, with Jada’s CIO Mazin Alshanbari described as ‘the original gangster’ of the Saudi VC ecosystem. In collaboration with Claudia Zeissberger at INSEAD; Jada has published high quality content like the VC Valuations in MENA: a reality check. The Saudi market, with both SVC as a well established fund & fund-fund and Jada is clearly seeing the benefits of these two key organizations. Jada, and similar F-o-F’s, like QIA, DFDF and Oman’s Future Fund, have all come to the market in the last few years and will play a key ecosystem role moving forward.
The talent base is expanding
A key point that was repeated again and again was the talent development and the need for further development of the entrepreneurial talent in the region. From tech talent, ambitious founders, experienced scalers, C-level and board members, education and talent attraction was clearly on people’s agenda.
Long-term development of the VC ecosystem
At the MEVCA (Middle East Venture Capital Association) Investor Summit, held at the ADGM, the words ‘ecosystem development’ were on everyone’s lips. Compared to other, similar ecosystems, far more thinking and conscious development had gone into shaping the ecosystem so far, than I normally see. It is hard to not walk away impressed by both the efforts, thinking and leadership happening here (kudos, Noor Sweid, MEVCA board and team!)
Coming of Age, recommended reading
At SuperReturn Vishnu Amble and Noor Sweid held a great fireside chat on the topic of Private capital leaders: Learnings from around the world. Excellent insights were shared with a true global perspective, and key stories on how MENA is changing. If you want to learn more, I recommend Noor’s latest book, Coming of Age, describing how entreprenurship is changing across MENA. Get it on Amazon (kindle version, coming soon)
A recognition, it is still early days
While the progress over the past decade has been remarkable, there was ample recognition that it is still early. Much work remains to build out a larger, deeper and more experienced VC ecosystem. “Many funds are still emerging(I,II, III), and need to continue to grow and raise to grow into their true potential”, said one SuperReturn participant.
What is a VC Ecosystem
For the past 15 months we have been studying and working on venture capital ecosystems around the world. Our work has led us on safaris in South Africa (with DFIs), deep dive workshops in North America, classrooms in Europe and learning journeys in SE Asia.
The core principle behind a VC ecosystem is making the talent x capital flywheel spin faster and faster.
In our work, we define a VC ecosystem with 8 strategic pillars, a core center and 150+ building blocks. These 8 pillars need to be developed in balance, to ensure a stable, long-term growth of the VC Ecosystem.
The report ‘Scaling Venture Capital Ecosystems’ will be published in spring 2025. You can pre-register for it here.
Looking ahead: through the lens of a VC Ecosystem
So, what are some key building blocks to develop over the coming years? Based on the many conversations and panels, I have identified 15 areas that should become priorities to develop the VC ecosystem further. Using the eight strategic pillars of a VC ecosystem, we can see some key themes and areas emerging.
Expert view
“The MENA VC ecosystem will see deeper sector specialization, increased cross-border investments, and more exits via IPOs and M&As. Climate tech, fintech, and AI will attract significant funding, while regulatory frameworks will evolve to support VC activity. More global LPs will enter the region, and local funds will professionalize, fostering a more mature startup ecosystem”
– Abeer Khattab, Head of Programs, Falak Startups
Mindset Shift We need to believe we can build massive companies, one SuperReturn speaker stated. Many have addressed the mindset shift needed, the ambitions needed to build and scale larger companies, faster.
Talent Expansion The region needs to attract talent, develop homegrown talent and recycle experienced talent to build the talent pipeline needed. Notably, the recycling of founders and early employees into new, high-growth startups will be key.
Scale Up Accelerators While the region has a good number of early-stage (idea to seed) accelerators, there is a clear need for scale up accelerators. A scale up accelerator would be aimed at series A to B, with market expansion and significant fundraising as two core pillars. Nordic Scalers is one such example, of how to build a regional scale up accelerator program.
Market Expansion “We are expanding into Saudi”, says many founders. I have rarely heard, “we are expanding into Europe or the US”. Founders need to be chasing bigger markets, either in Asia, Europe, Africa or the Americas. Starting out at home is good, expanding globally is great. More market expansion, everyone. (see also Scale Up Accelerator for this purpose)
Expanding technical education One thing I did not hear much about was the need for expanding education, notably technical education across the region. “Just develop the world’s best universities and set up some funds”, was the reciepe Stanford faculty Burton Lee shared with me 10 years ago. When will we see the region claim a top 10 global university?
Increased focus on AI “In the US, 45% of all VC funding now goes into AI startups. In MENA this number is 2,5%”, said one of the speakers at SuperReturn. The number stuck with me. Clearly, there is much more work to be done to develop, use and innovate around AI across the startup landscape. People like Tunç Ozgul (AWS) and Laura Modina (OpenAI) are already hard at work to drive the AI revolution here. Much more will be needed across R&D, education and application.
Expert view
“With ongoing structural reforms, the region is evolving into one of the most attractive destinations for long-term value creation as we see continued local talent development and foreign talent inflows building enterprises that will attract foreign and local investment in private and public markets”,
– Vishnu Amble, global finance expert and Founding Director of GreenBear Group
Scale Up Rounds Noor Sweid described the current Series B gap at $950M – and growing. MENA needs to ramp up larger, later-stage, series B-, C- and D-rounds.
Growth Funds We need to see more $200M – $1BN funds, to support these scale up rounds. BECO Capital V, MEVP XIII, General Catalyst MENA Growth Fund and Global Ventures V are all possible venture-to-growth funds in the region.
Deploy new fund structures Expect to see new fund structures, more private market fund-of-funds and secondaries funds coming into the market. I spoke with several people working on these innovative structures already. This will be excellent add-ons in the market.
Expert view
“The MENA VC ecosystem needs more growth-stage capital to support startups beyond early funding rounds. Additionally, harmonizing regulations across the region will help startups scale beyond single markets, unlocking broader opportunities for expansion”
– Christian Tassin, Chief of Staff, MAGNiTT
Exits & Liquidity Everyone talks about exits. Yes, we need more. But we also need to build the high-growth, scalable companies that can exit at outlier valuations. Simply generating liquidity paths at 1X – 3X will not move the needle for anyone. More expertise and quality content like the MENA exit Guide from Taylor Wessing and guidance from VC experts like Abdullah Mutawi is needed. In most markets, meaningful VC exits are 85% M&A’s, so the region will need to develop a large number of M&A teams, M&A strategies and the appetite for ‘buy and build’. Over time, in line with the maturing of the ecosystem, more IPOs are welcome, but there is limited need to rush into those listings just yet. Give it a few more years.
Expert view
“The MENA venture capital ecosystem is poised for continued growth, driven by the dual forces of local startups expanding beyond the GCC region and active capital market initiatives facilitating the listing of the most advanced platforms”
– Ibrahim Sagna, Executive Chairman of Silverbacks Holdings
Expanding MEVCA Ecosystem organizations like MEVCA will continue to play a critical role (just like we talked about Marika). Looking to more established VC associations, like the BVCA, could serve as an example for how to expand the role of MEVCA into policy, talent development, pension fund reform and GP roadshows into Asia and the US.
The Crucial Role of Media Media, data aggregators and reports, like MAGNiTT’s rich collection of reports are highly valuable. Podcasts like Conversations with LouLou are valuable additions and bring much welcome transparency and accessibility to the ecosystem. More is welcome.
Expanding Events The region has a record number of events, and set to expand this in the coming year. The first SuperReturn in Saudi Arabia was a great success, and likely to happen again in January 2026. More MEVCA events and a wide number of GP/LP events will continue to serve the VC ecosystem well.
GP Accelerators In the US, accelerator programs for emerging managers are well established. In Europe, APAC and Africa, they are rapidly expanding (I am involved with six to date). Yet, in MENA, there are no official GP accelerator programs in the market. This is likely, maybe even needed to change in the coming years. For the large Fund-of-funds in the region, this would be an easy addition to their role in the ecosystem.
Expert view
“In the next decade, I believe that MENA VC ecosystem will be defined by a new wave of globally ambitious founders, a stronger talent pool, rise in b2b models and AI driven innovation. With AI at the forefront, we will see more startups leveraging advanced technologies to build scalable, high-impact solutions. The region’s startup landscape will mature significantly, fostering greater international expansion and unlocking massive opportunities across industries”,
– Head of Startup and VC Ecosystems at AWS, Tunç Ozgul at MEVCA’s Investor Summit.
The Key Role of Government In any VC ecosystem, the role of government leadership, continuous regulatory reform and government backed fund-of-funds matter. This is also the case in MENA. From Saudi’s Vision 2030, to QIA’s new fund-of-fund program to Abu Dhabi’s IPO fund and Abu Dhabi’s Global Market’s ecosystem program, the role of government will continue to be key moving forward. Senior leaders like H.E. Abdulmuhsen Alkhalaf and H.E. Ibrahim AlMubarak, with the Investment at Ministry of Investment in Saudi Arabi are key leaders to drive the ecosystem forward.
Expert view
“Over the next 7 years, the MENA region will need to develop the capital markets and overall exit landscape. MENA’s investment landscape (VCs and accelerators) will likely shift from generalist investing to specialized key sector investments. This is as we start seeing more rising application volumes driven by startup-friendly regulations.
Lastly, the region’s VC enablers will have bigger player: CVCs who will likely integrate incubation as an in-house, strategic problem-solving tool. Corporates will look to fund & acquire startups at early stages, to solve an in-house problem”,
– Sanjana Raheja, VC-in-residence, LvlUp Ventures
