Happy Friday, friends 👋

$100M AI funds, venture debt, imminent Saudi IPOs, and SME financing. No, this isn’t just a replay of our 2025 thematic greatest hits, it’s also what we have lined up in this week’s edition.

That being said, perhaps the most consequential story of the past week came from the Tadawul, as Saudi Arabia’s stock market staged its biggest rally since 2020.

The surge followed comments from a CMA board member suggesting that majority foreign ownership could be permitted by the end of 2025.

Currently capped at 49%, lifting the ceiling above 50% would allow overseas investors to hold controlling stakes for the first time, a historic shift that would echo the UAE’s 2019 move to allow 100% foreign ownership of businesses.

We’ll keep you posted, but for now, enjoy this week’s edition 👇

This week’s round-up is an 7 min read:

erad (🇸🇦 KSA), a Riyadh-headquartered alternative financing platform offering Shariah-compliant, data-driven SME financing across the GCC, has raised $33M in debt financing led by Stride Ventures (marking its first major deal in Saudi Arabia).

DOO (🇸🇦 KSA), an AI-powered customer support startup localising service across Arabic dialects for sectors including telecom, banking, aviation, and e-commerce, has raised $1.7M in Series A funding led by Merak Capital, with participation from Plus VC and other regional investors.

Mada (🇯🇴 Jordan), a Buy Now, Pay Later (BNPL) startup operating in the Central Bank of Jordan’s regulatory sandbox, has raised $1.55M in pre-seed funding led by Vision Ventures, with participation from D-Investments.

FlyNow Arabia (🇸🇦 KSA), a modular eVTOL company developing the eCopter for air taxi and cargo logistics, has secured undisclosed investments from Den VC, Al-Mohaidab, Reslan, and Mehchi family offices. Backed by the National Industrial Development Center and Ministry of Investment, the company will establish a regulatory sandbox and local manufacturing base in Saudi Arabia.

🤝 Abu Dhabi-based Presight and Shorooq have launched Presight–Shorooq Fund I, a $100M global AI fund targeting startups across smart cities, energy, fintech, gaming, Industry 4.0, and deep tech. Portfolio companies will gain not just capital but also access to Presight’s cloud and GPU infrastructure, plus Shorooq’s network across MENA and Asia. It’s the first time a publicly listed Middle Eastern tech company has rolled out an AI fund of this scale. This is MENA’s third AI-focused fund launch this year, after STV’s $100M Google-backed vehicle and Tala Al-Jabri’s $50M Wyld VC.

💵 PayPal has committed $100M to scale digital commerce across the Middle East and Africa through minority investments, acquisitions, PayPal Ventures funding, and technology rollouts. The move follows the launch of its first regional hub in Dubai earlier this year. The investment builds on PayPal Ventures’ backing of regional startups like Tabby and Paymob.

🌍 Tunisia’s ANAVA fund of funds has invested $4M into Qatar-based Rasmal Innovation Fund I, which is targeting $100M for MENA startups and is the first vehicle backed by QIA’s $1B fund-of-funds programme. Rasmal, launched in 2023, focuses on fintech, B2B SaaS, healthtech, and logistics from seed to Series B. ANAVA, supported by the World Bank, KfW, and Tunisia’s CDC, uses a fund-of-funds model to attract international VC while ensuring capital flows back into Tunisia’s startup ecosystem.

💼 Avanz Capital has joined Algebra Ventures’ $100M Fund II as a secondary LP via its Avanz Manara arm, marking one of Egypt’s first secondary LP transactions. Backed at first close by IFC, EBRD, EAEF, FMO, BII, and regional family offices, Fund II targets 31 early-stage startups in fintech, agritech, edtech, and e-commerce, with 14 investments already made.

🇬🇧 Key Capital, a Middle East-based secondaries investor, will lead its third annual London Trek next week (Sept 29–Oct 3), connecting top MENA founders from seed to Series D, spanning fintech, proptech, AI, healthtech, e-commerce, cybersecurity, edtech, and SaaS, with global investors. Backed by Jefferies, Taylor Wessing, Hub71 and Saudi’s MCIT, the five-day programme will feature private sessions, curated 1:1 investor meetings, and exclusive dinners, culminating in a mixer co-hosted with MCIT expected to draw 250+ investors and industry leaders.

📊 Endeavor has published a series of interactive charts exploring the multiplier effect in MENA, showing how successful founders are reinvesting in the ecosystem through mentorship, angel investing, and serial entrepreneurship. The data highlights companies including Careem, Kitopi, Bayt, Namshi, Mumzworld, and Maktoob, whose alumni and founders have gone on to seed new ventures, train future entrepreneurs etc.

🇸🇦 Saudi’s Tadawul surged 5.1% Wednesday, adding $124B in market cap, after reports via Bloomberg that the Kingdom may soon allow majority foreign ownership of listed companies. Bank stocks soared 9.2% on the day, following comments from a CMA board member that the rule change could take effect by year-end. Analysts at JPMorgan, EFG Hermes, and Franklin Templeton see the move unlocking billions in foreign inflows.

🍽️ Travis Kalanick’s CloudKitchens is preparing for an IPO of its Middle Eastern operations, adding JPMorgan, SNB Capital, and First Abu Dhabi Bank to work alongside Goldman Sachs, people familiar told Bloomberg. The ghost kitchen firm, backed by Saudi’s PIF with a $400M investment in 2019, is eyeing a dual-listing in Riyadh and Abu Dhabi as soon as 2026. Incorporated in Abu Dhabi and operating KitchenPark sites in the UAE, Saudi Arabia, and Kuwait, CloudKitchens’ IPO would follow the region’s only dual listing to date, Americana’s $1.8B 2022 debut.

🏡 Saudi vacation rental startup Gathern is targeting an IPO in 2028, CEO Latifah Altamimi told Bloomberg. Backed by Sanabil Investments and STV, the company recently raised $72M in Series B funding and plans to expand internationally while moving beyond accommodation into car rentals, flights, and curated experiences. Founded in 2016, Gathern says it holds 44% of Saudi’s alternative hospitality market, with 72K+ properties and 5M users, and has been profitable since 2023.

🍔 Talabat has approved an interim dividend of $202M (3.2 fils/share), equal to 90% of its H1 2025 net income. The Dubai-headquartered Delivery Hero subsidiary has set Oct 1 as the ex-dividend date, Oct 2 as the record date, and Oct 21 for payment.

📱 Cairo-born startup Instabug has rebranded as Luciq, reflecting its shift from bug-reporting SDK to agentic mobile observability. Founded in 2012 by Omar Gabr and Moataz Soliman, the company has cumulatively raised $50M+ from Accel and Insight Partners to date. In February 2025, Jim Douglas was appointed as CEO, with Gabr moving to President. This week at DroidCon Berlin, Luciq unveiled AI agents that can monitor, diagnose, and auto-remediate app issues, aiming for “zero-maintenance mobile apps.”

🤖 Elon Musk’s AI startup xAI has closed a $10B+ funding round at a $200B valuation. Backers include Valor Capital, Qatar Investment Authority, and Saudi Crown Prince Mohammed bin Salman’s Kingdom Holding Co. The raise comes as xAI is burning ~$1B a month on infrastructure to compete with OpenAI, Google, and Meta. Two months ago, we noted Musk was in early talks to lease data centre capacity in Saudi Arabia, with options ranging from HUMAIN’s multi-gigawatt PIF-backed project to a nearer-term 200MW facility by another operator.

⚡ San Jose–based Empower Semiconductor has raised $140M+ in a Series D led by Fidelity, with participation from Alphabet’s CapitalG, Walden Catalyst, Atreides, and a subsidiary of Abu Dhabi’s ADIA, bringing total funding to $200M+. Empower develops integrated voltage regulators (IVRs), compact power management chips that can be embedded directly into processors, reducing component counts and system size while cutting server power use by up to 50%.

🧪 CE-Ventures, the VC arm of Crescent Enterprises, has co-led a $7.7M Series A in Indian speciality chemicals startup Distil, alongside Jungle Ventures, with Rubamin and others also participating. Founded in 2021, Distil develops advanced chemicals for paints, plastics, and construction using an R&D-led, asset-light model that partners with underutilised plants. The company plans to scale output 5×, acquire new plants, and expand into the Middle East, Africa, and North America.

🎾 Epic Padel, a Virginia-based startup, has raised a $10M seed round led by Dubai-based Stryde Ventures and NowaisWorld to accelerate the growth of padel in the US. Despite 30M global players and 17K courts in Spain, the US has fewer than 700. Epic Padel, already running a club in North Carolina, plans to open 4–6 more in states like Virginia, Wisconsin, South Carolina, and Utah, targeting second-tier cities to democratise a sport often seen as elite.

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This week on VC React, we unpack Tamara’s $1.4B debt facility, debate Hala’s $157M Series B and its Square-style ambitions, and ask if Robinhood’s plan to democratise startup investing is visionary or risky.