Aleksei Gorodenkov/Alamy via Reuters Connect
Surge of international interest
Supported by strong local markets
Valuations lower than US and Europe
Global investors are increasingly vying for stakes in later-stage Gulf startups, betting on the region’s economic expansion and stronger exit opportunities, as the regional IPO markets gain momentum.
The region, long overlooked for growth-stage capital – minority investments in established companies aimed at accelerating expansion – is witnessing a surge of interest from giants such as General Atlantic, General Catalyst and others.
“In all the investment opportunities we’ve looked at [in the region], we’ve competed against other investors,” Melis Kahya Akar, head of consumer for Europe, Middle East and Africa at General Atlantic, a New York-based private equity firm, tells AGBI.
“There are very interesting [companies] in the region that are also thinking [about] international expansion, which we historically had not seen as much. This is getting international investors quite excited,” Akar says.
General Atlantic, which has about $83 billion in assets under management and has deployed more than $1 billion in the region since 2012, opened offices in Abu Dhabi and Riyadh last year.
Its regional portfolio includes UAE-based payments processing company Network International, spectacle retailer Eyewa, which has stores in the UAE and Saudi Arabia, and the real estate platform Property Finder, which has headquarters in Dubai and has hinted at plans to go public. The company also invested in fragrance brand Kayali last month, which was spun off from Huda Beauty.
“The availability of strong local equity markets adds to the investment case,” Akar says. “Having multiple exit options makes an investment far more attractive.”
Talabat, a delivery and retail app, recently became the first UAE-born startup to go public, while others including Dubai’s classified platform Dubizzle and buy-now-pay-later fintech Tabby, which is based in Saudi Arabia, are gearing up to do the same.
“Regional businesses having successful exits is now a very believable milestone in the startup journey and investors want in on it,” says Khalid Saiduddin, CEO of Riyadh-based consumer electronics startup Zension Technologies.
“The more diverse the listings become, the more robust the exchanges will become,” Saiduddin says.
“I think we will then see a flywheel effect, where the aspiration perhaps shifts to the UAE and Saudi for listings over New York or London as a default.”
Anton Vasilenko, CEO of Dubai esports company True Gamers, added that Gulf startup valuations remain lower than in the US and Europe, offering investors an opportunity to acquire “strong assets at reasonable prices”.
However, Ali Samir Oosman, managing director at venture builder Disrupt.com in the UAE, says Saudi Arabia in particular is commanding significant valuations by serving large markets. Disrupt has allocated $100 million to seeding and scaling early-stage technology ventures globally.
Growth-stage investments in Saudi Arabia accounted for 67 percent of total transactions in 2024, up from 43 percent in 2023, according to figures from startup data platform Magnitt.
But, despite their volume, these deals represented only 18 percent of total private equity investment.
Deepak Ahuja, CEO of iAccel GBI, an accelerator for Indian startups expanding to the Middle East, says private equity companies, family offices and venture funds are also shifting focus to later-stage investments, “which wasn’t common before” making the deal space “far more competitive”.
The region’s venture market is also becoming more structured, with co-investments between local and international funds helping de-risk deals, says Lucy Chow, general partner at the World Business Angels Investment Forum.
Zenison is an example. It recently raised capital from Aramco and Japanese conglomerate Sumitomo.
Ivan Fernandes, a long-time angel investor based in Dubai, adds that Gulf sovereign funds, which manage more than $4.5 trillion in assets, remain dominant in late-stage investments, but “of late there are also large global venture funds competing in this space”.
However, the funding gap for growth-stage companies is still about $20 to $25 billion, with 250 to 300 companies seeking active investment, he says, citing figures from Magnitt.
“Governments need to introduce more initiatives to bridge this gap and build a steady pipeline of companies ready for exits in the next five to eight years,” Fernandes says.
