Welcome to the second edition of the MENA VC Playbook!
In the first edition, we tackled how the region's top investors build deal flow pipelines. This time around we’re flipping the lens entirely and focusing in on how those same investors actually raise the capital that they deploy in the first place.
A spoiler alert straight off the bat, if you were to distill every fundraising conversation we had for this edition into a single, uncomfortable truth, it would be that almost every VC in MENA is pulling from the same, remarkably shallow pool of LPs.
The sovereign wealth funds, the DFIs, a handful of government-backed fund-of-funds, a rotating cast of family offices, some enthusiastic, others still nursing burns from the heady days of 2021-2022. And that, give or take, is the captive universe.
There are no large-scale pension fund allocations to speak of. University endowments in the region, some of which rank among the largest in the world, have shown virtually zero appetite for venture whatsoever. Insurance companies are not at the races.
In short, the kinds of institutional capital that transformed venture from a cottage industry into a mainstream asset class in the US simply do not exist here yet, at least not in any meaningful, programmatic way.
And the fundraising process itself? Well, by all accounts, it’s pretty brutal.
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Every investor we spoke to described timelines that would make most Silicon Valley GPs break out in hives. Two years is standard, and if you’re a first-time manager, most likely longer again.
Frequently the gap between first close and final close can stretch to the point where you're simultaneously deploying Fund I and still trying to finish raising it.
Being a fund manager is a really difficult job. You've got to figure out fundraising. You've got to figure out structuring of that fund. Where am I going to put it? You've got to figure out regulation, all the legal stuff, how you're going to fund this thing to get started, because it's actually quite expensive. And then you'll have to pony up one or two percent of the AUM of whatever fund you're targeting. So if you're targeting a $50 million fund, you've got to find half a million dollars somewhere in order to deploy.
So while it may look cool and sexy from the outside, as Hasan puts it, it is decisively neither of those things from the inside.
And yet, per MAGNiTT, MENA VC funding hit $3.8 billion in 2025 alone, a 74% YoY increase and the strongest year since 2022. Saudi and the UAE accounted for 86% of capital deployment, and 71% of transactions. International investors now contribute just over 50% of all capital.
New funds are coming to market, and established regional managers are beginning to find their wings.
In 2025, BECO Capital closed $370 million across two vehicles, 500 Global launched a new regional growth fund, Shorooq have been on a tear, announcing a new $100M AI fund in partnership with Presight, and a $200M new growth fund anchored by QIA in recent weeks.
So there is capital there, the question is more so how you get to it, and at what cost.
That's what this edition endeavours to answer. Over the following six steps, we break down the mechanics of fundraising for MENA-based VC firms, drawing on the same group of investors whose sourcing strategies anchored our first edition.
Between them, they've raised from sovereign wealth funds and scrappy angel networks, from DFIs in Washington and family offices in Riyadh, from institutional LPs in New York to South Korea.
They've navigated development mandates, managed strategic investors who want ecosystem impact alongside financial return, and survived fundraising cycles that started during COVID and ended, well, whenever they ended.
Invariably their experiences are not identical, far from it, which we think is what makes the insights so valuable and applicable whether you’re a first time fund manager or someone gearing up to go again.
An Egypt-focused fund raising from DFIs faces a fundamentally different reality than a GCC generalist courting Saudi government capital, which in turn looks nothing like an emerging manager trying to convince family offices that venture isn't a hobby.
The underlying challenges rhyme, and the lessons, when laid side by side, start to form something genuinely instructive, useful even if we were to be so bold.
Table of contents
Understand the LP landscape: Who's actually writing checks, who's missing, and why the pool is the way it is
Find your anchor: The gravitational centre every MENA fund needs before anything else moves
Craft your pitch: What works when you're sitting across from an LP, whether you have a track record or a story
Navigate strategic capital: Development mandates, geographic restrictions, and the art of balancing financial and strategic LPs
Survive the marathon: Two-year timelines, first close mechanics, and the economic reality of being a GP
Grow the LP base: The structural changes MENA needs if the ecosystem is going to outgrow its dependence on sovereign capital
Thank you once again to Hasan Haider (Plus VC), Ambar Amleh (Ibtikar Fund), Zach Finkelstein (Class 5 Global), Ivo Detelinov (Oryx Fund), Laila Hassan (Algebra Ventures), Khaled Talhouni (Nuwa Capital), Michael Lints (Golden Gate Ventures), and Hussein Attar (Tech Invest Com) for opening up their fundraising strategies.
Now, let’s dig into it.
Step 1: Understand the LP landscape
Before you raise a single dollar, you need to know the room you're walking into. And in the Middle East and North Africa, that room is smaller, more concentrated, and more structurally unusual than in probably any other venture ecosystem of comparable size.
The headline numbers and glossy PR paint a picture of momentum. GCC sovereign wealth funds collectively manage somewhere in the region of $5 to $6 trillion in assets.
Saudi Venture Capital Company (SVC), established in 2018, now manages $3 billion in AUM across 60 private capital funds. Jada, PIF's fund-of-funds vehicle, was established with $1.07 billion in investment capital. Qatar Investment Authority launched a $1 billion VC fund-of-funds in early 2024, which was expanded to $3 billion at Web Summit Qatar in February 2026.
But the big SWFs generally operate in a different stratosphere entirely. Take Abu Dhabi's Mubadala, which deployed $29.2 billion across 52 deals in 2024 alone, making it the largest sovereign fund investor globally that year. That's a staggering volume of institutional firepower.
And yet, when you zoom in to the level of the individual GP trying to raise a $50 million or $100 million early-stage fund, the reality looks quite a bit different.
There isn't really a large pool of investors in the region that are LPs in venture capital funds. Ecosystems evolved across the world when financially motivated investors started to invest. In the US, the real start of venture capital as an asset class was when endowments were able to start investing in risk assets. We don't have that. Endowments in the region are too big, have a very risk-averse attitude to deployment. They're mostly in liquid stuff. They don't have much in alternatives. And a lot of the sovereigns, again, too big, wouldn't do anything at smaller scale, or not interested in the region. They've historically always looked to deploy the region's money in other markets.
So paradoxically, while the GCC is home to some of the largest pools of investable capital on the planet, the LP base for regional venture funds remains extraordinarily thin.
To understand why, it helps to think about the MENA LP landscape not as a single pool, but as a series of distinct (and unevenly filled) buckets.
The sovereign architecture
The role government-backed capital has played in building MENA's venture ecosystem is indisputable.
The sovereign wealth funds jumpstarted the ecosystem, especially in the Gulf, but across MENA as well. Without them, I would think that we would have a smaller ecosystem that would also take longer to develop. The sovereigns ensure the staying power of VC funds, and as long as we are around, we will see continued company formation. Company formation means young people choosing to not take a corporate or public sector job and trying to build a business instead. And those people need to know that their project has a chance of raising money eventually, because they wouldn't spend the time during the day and night developing a product if they are concerned that there won't be funding for them.
Sovereign capital in MENA is ultimately still the load-bearing wall of the entire venture ecosystem. SVC alone can contribute up to 65% of a fund's total size.
For many Saudi-focused managers, a single government-backed entity is providing the majority of their capital. Consequently, the ecosystem rests, in a very literal sense, on continued sovereign commitment.
Hussein Attar frames the impact in temporal terms, and his periodisation of the ecosystem is useful for understanding just how recently all of this architecture was assembled.
Before 2019, the landscape was completely different. The ecosystem was still in its early stages – startups weren’t part of mainstream conversations, funding was limited, and check sizes were relatively small. Then 2019 became a turning point. The creation of funds of funds like SVC and Jada, alongside landmark moments such as Careem’s exit, reshaped the ecosystem almost overnight. Within a single year, we saw a surge in new venture funds, startups began gaining real visibility, fundraising volumes increased significantly, and terms became far more founder-friendly. That shift attracted an entirely new wave of investors, operators, and entrepreneurs into the space.
The institutional plumbing that most GPs now take for granted (SVC commitments, Jada allocations, a regulatory framework in DIFC and ADGM that actually works) is barely old enough to have a track record.
For context, David Swensen had already been running Yale's endowment for four years by the time the Berlin Wall came down!
The family office paradox
If sovereigns are the load-bearing wall, family offices are the fastest-growing (and often times most frustrating) part of the structure. GCC royal private offices alone control approximately $500 billion in assets.
Prominent names like Kingdom Holding (Prince Alwaleed bin Talal, a notable Careem investor), the Al Faisaliah Group, the Olayan Group and dozens of others represent an enormous theoretical LP base.
The operative word of course being theoretical.
You go after family offices and some of them are like, "I'll just do it myself." And then a couple of years later, they've burnt their fingers and they're like, "This whole thing sucks, I'm never going to do VC again." I was like, maybe try it with a manager that knows what they're doing and is doing this full-time. You see 10 deals, you do one. I see 5,000 deals and I do 100. So maybe there's a difference in scale and access to deals. We invest in the top 1% of what we see, and you've got to be able to see all of that. I think we still have this mindset in the region with some families that, hey, this thing I can just do myself. It's not a serious thing.
The pattern Hasan describes is remarkably consistent across the region. A family office gets excited about venture during a bull cycle, makes a handful of direct investments without the infrastructure or pattern recognition to do it well, gets burned, and retreats entirely.
Strategy& have noted that family offices and HNWIs "have not yet properly engaged with VC, although they regard it as an attractive asset class," which is the kind of diplomatically phrased assessment that, translated into plain English, means that they're interested in the idea of venture but haven't figured out how to do it without getting hurt.
Hussein puts a finer point on the current dynamic, particularly after the 2021-2022 correction.
A lot of family offices jumped into startups during that period. Some invested directly, others put money into funds. But not everyone got the returns they were expecting. Especially those who were heavily exposed to markets like Pakistan or Egypt – they saw real losses, down rounds, devaluations. That changes how you think. Now they’re much more critical about where they deploy capital. Track record really matters. If you’re raising Fund II or III, they want to see what you’ve actually done. If the numbers are solid, they’ll commit. If it’s shaky, it’s more like, “Okay… let’s see how this plays out first.”
The family office conversation in 2025 is fundamentally different from the one in 2021. Back then, FOMO was doing the selling for you. Now, you're selling into scepticism, into portfolios that may already have venture exposure they regret, and into a mindset that (quite reasonably) demands evidence before enthusiasm.
Some of the family offices, in terms of sophistication of the investment team, are basically like asset management companies. The family holdings own a lot of businesses and those businesses should engage in tech. And now it becomes very interesting, because those businesses are undergoing their own transformation journey, their own digital transformation. We have been fortunate to have families actually reach out to us, including families that we have not known before. And whether this family ends up investing or not is almost of secondary nature. We are very happy to be receiving inbounds and people engaging us in VC conversations.
So, rather than "invest in venture because it's exciting" – "invest in venture because your core holdings need to understand what tech is doing to your industries, and a fund allocation is the most efficient way to buy that visibility."
The DFI layer
For funds with mandates that extend beyond the GCC, particularly those focused on Egypt, North Africa, or Palestine, development finance institutions often represent the single most important LP category.
As an Egypt-focused fund, we're very different from the UAE and Saudi market. The majority of our LPs are actually DFIs. But it's very important to understand exactly what LPs want to get out of their investments, whether it's a DFI or a family office, to make sure you deliver on that. For us, it was always financial returns. Impact is important, but we realised that impact is delivered when you invest in a great company either way. So it's not a target by itself, but it is a by-product of making good investment decisions.
Algebra's Fund II illustrates what a DFI-anchored LP base looks like in practice: IFC, FMO, BII, EBRD, EAEF, and others, all returning from Fund I alongside regional family offices.
For DFI-backed funds globally, median size sits around $134 million compared with $384 million for non-DFI funds (per PitchBook), a gap that reflects both the smaller markets these vehicles typically serve and the more cautious deployment pace of institutional development capital.
Ambar Amleh, whose Ibtikar Fund focuses exclusively on Palestinian founders, offers a candid perspective on what raising from DFIs actually entails.
If you haven't raised from a DFI, I can tell you it is not an easy feat. They look under the hood and in between the engine. I don't want to minimise that, because in the end, a DFI does have a mandate to invest in emerging markets where more traditional investors may not invest, but they are not doing it ad hoc. They really are understanding what they're getting into, understanding the risks, and also providing a lot of the structure and support that, for example, we are providing to our companies. In our Fund I, they requested various governance structures that are now in place for the new investors coming into Fund II.
DFI capital shouldn’t be thought of as just money, rather as an institutional stamp of approval and a governance scaffolding that makes subsequent fundraising from other LP categories significantly easier.
The diligence of course can be brutal (IFC Performance Standards, ESG management systems, exclusion lists, extensive reporting), but the credibility it confers is worth the pain, particularly for emerging managers without an established track record.
The structural absence
So we have sovereigns, family offices, and DFIs. What's missing?
Almost everything else.
Pension funds, for example, are functionally absent from MENA VC. So too are university endowments. Despite the fact that KAUST's endowment alone is estimated at north of $23 billion, ranking it among the largest university endowments globally, there is no evidence of major LP commitments to venture fund managers from any GCC university. Insurance companies as well remain not meaningfully engaged.
The entire category of private institutional capital that, in the US, transformed venture from a niche pursuit into a $77 billion-a-year fundraising machine, does not exist here in any structural way.
Now, the reasons aren’t exactly mysterious. Most GCC universities are state-funded rather than donation-funded, which removes the return-generation imperative that drives endowment investing at Yale or Harvard. There is no multigenerational alumni donation culture. Sovereign wealth funds effectively fill the role that endowments play elsewhere, channelling national wealth into alternatives through entities like PIF and Mubadala. And as Hasan notes, "venture capital is a very risky asset class and, more importantly, it's still 'new' to the region."
The result is an LP landscape that, for all its sovereign heft, remains structurally dependent on a handful of government-backed programmes. When SVC is providing up to 65% of individual fund sizes, you don't have an LP market, you have a policy instrument. That's not a criticism of SVC, which has been genuinely transformative, but it is a vulnerability that the ecosystem will eventually need to address.
We'll return to what that address might look like in Step 6.
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